Unions Accuse County of Bullying on Pension Issue
Bill would eliminate decades-old practice of counting overtime toward pension benefits at the same time the county and a union are negotiating the issue in a new contract.
Union officials said Tuesday that a bill to change how pensions are calculated for county employees who belong to one union is little more than a bullying tactic used by county officials.
At issue is a bill that would eliminate overtime from final pension calculation for employees belonging to American Federation of State, County and Municipal Employees—mostly snowplow drivers and vehicle maintenance workers and employees who maintain the county sewers.
"You have to understand, we are the lowest paid county employees," said Norman Anderson, president of AFSCME in Baltimore County.
"We are the ones who keep the county running," said Anderson.
"Our scenario is very simple—when there's a foot of snow out there, that big yellow truck is the greatest thing in the world," said Anderson. "You could be having a party on Super Bowl Sunday or a Raven's celebration and you push that silver lever and things come up instead of go down and guess who the most important county employee is? The Bureau of Utilities. These are the people we represent."
Anderson and other union leaders testified in front of county council Tuesday about the pension issue and described the adminsitration's tactcs as heavy-handed.
Currently, employees represented by the union are allowed to use their overtime to increase the size of their final pension benefits. The employees pay into the pension system based on their overtime.
The practice, which is not law, affects only employees represented by AFSCME and dates back three decades, according to Keith Dorsey, director of the county Office of Budget and Finance.
The problem, however, stems from the fact that those overtime payments are not consistent year to year but result in an increase in an employee's base pay on which the final pension benefit is based.
"It's has brought bizarre results," Dorsey said of the policy.
Dorsey said some employees could receive retirement benefits that are based on a calculation higher than their actual base salary. One current employee with the county could be paid a pension based on $62,000 in average compensation based on overtime payments even though his actually salary is $4,000 lower.
Dorsey said the bill brings the the policy "in line with what other employees are receiving."
The bill would affect about 834 people out of a pension system that covers about 9,600 employees, Dorsey said.
In 2011, affected employees earned nearly $3.5 million in overtime, according to the county auditor.
A county auditor's note estimates the savings to the county from the pension change at about $200,000 annually. Dorsey said that figure might be closer to $368,000 a year.
Employees who have already paid into the pension system based on their overtime would not lose their current payments but would not be able to apply future overtime to their pension beginning in June.
County Administrative Officer Fred Homan said the savings is important at a time when the county pension system becomes more mature and is not funded at the levels it was in the recent past.
A recent report now estimates that the county's system is 77 percent funded—down from about 80 percent last year, according to Homan.
"We've come to the point where this is essential," Homan said. "It's a policy and practice that no longer can be tolerated."
The change has been part of ongoing negotiations between the union and the county as they work on a new contract. The current contract expires at the end of June.
"We put this on the table and it was rejected by the (union)," said Homan.
Michael Spiller, a representative of the American Federation of Teachers, which represents employees including county public health nurses, said his union opposes the bill because of the effect it will have on negotiations with other unions.
"This is a premature bill," said Spiller, adding that the county's bill sends a message that "when we don't get what we want, we'll go to the council and get it."
This is the second bill since February that the county has sought to resolve an ongoing dispute over pensions.
The county is asking the General Assembly to change pension law as it pertains to some state employees who transfer to jobs in the county. The law would affect an ongoing legal issue involving the county.
In that lawsuit, the county has lost decisions at both the county Board of Appeals and in Harford County Circuit Court. The county is currently appealing the decision.
A number of unions including the county Fraternal Order of Police Lodge 4, which represents active and retired police officers, lined up Tuesday to oppose the council bill.
Dave Rose, second vice president of the police union, called the bill "vindictive" and "a typical bullying tactic used by the county."
"If they don't get it by bullying, they try to circumvent the system.
Rose said the county has tried to re-open negotiations with the police union over pension issues after agreeing in a contract that it wouldn't do so until 2014.
"Contract language means almost nothing to this administration,"said Rose, adding that the union has rebuffed efforts to open those negotiations and in return is now being taken to binding arbitration on another issue.
"There's the bullying," said Rose.
Homan rejected Rose's assertion that the county is a bully. Instead, he said the county has attempted to avoid furloughs and layoffs.
"Some counties have furloughed, laid off or raised taxes or all of the above in one, two or three years," said Homan
"They have gotten some of the unions to make (agreements) that say future employees will pay more into the system so that current employees won't be laid off or furloughed for three years," said Olszewski. "To me, in this economy, that's a good thing."
Union officials said passage of the bill could lead to legal action against the county.
"By submitting legislation here, it is my opinion that the county is committing an unfair labor practice if it's approved," said Anderson, the union president, who added that a grievance would follow passage of the bill.