Holly council rehashes budget deficit, union negotiations, and insurance premiums

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Gwen Walters reads her stateme...

HOLLY, Michigan – A $68,626 budget deficit and ongoing union contract negotiation woes provided Holly Village Council members, village employees and many concerned community members with plenty to discuss during the Dec. 15 Village Council meeting.

Last week, council members rescinded Village Manager Marsha Powers’ plan to layoff 10 village employees over the holidays, a move that would have shut down the Village Offices and the DPW while saving the village’s general fund approximately $7,700.

On Tuesday evening, council members looked for other ways to reduce the village’s bursting budget.

Before council could dig into the budget, village employee and union steward for the Teamsters Local 214 Gwen Walters used the public comment portion of the meeting to suggest ways in which the union and village officials could become “unstuck” in contract negotiations.

‘The current budget crisis has left members of the Teamsters bargaining unit wondering what the future will hold," Walters said. “We do not take our positions with the village for granted. We are here to serve the taxpayers of this community.” Walters said the two obstacles standing in the way of an agreement pertained to new work guidelines penned by Powers in August, and the use of part time employees and contract employees to complete work that could and should be done by Teamsters bargaining employees.

“If the Village Council would agree that these guidelines have not been officially enacted and that they will be negotiated between the bargaining unit, the personnel committee and management, then the major obstacle to settling the contract will have been removed,” Walters said. “If the village would agree to allow Teamsters oversight of the deliberations for the hiring of contract employees and part time employees, then the second obstacle to the contract negotiations would be removed.”

Walters said there is concern among group members regarding the Dec. 23 deadline for the Teamsters bargaining agreement. Should the village ratify the contract before Dec. 23 or rescind the cancellation, Walters said the group anticipated concessions from the bargaining unit to include no resistance to healthcare changes made immediately, no resistance to reduced hours for part time employees, and no objections to short term layoffs or furloughs as long as management agrees to participate equally in the pay and/or time reductions.

In addition to the union’s letter, council members were given a list of six suggested ways in which the group of employees felt additional budget reductions could be made.

“The Teamsters are willing to help you balance the budget by sharing in the sacrifices that need to be made,” Walters summarized. “There is a strong likelihood that the contract could be settled by the end of this week. We have laid our cards on the table. It’s up to you, the Village Council to decide how you want to direct the Village Manager to proceed.”

Following Walters’ comments, Holly Chief of Police Rollie Gackstetter addressed council. “The police department has historically to my knowledge been the most difficult bargaining unit in the village with which to reach an agreement,” he said. “And I would have to tell you that the same bargaining team that is now working with the Teamsters accomplished a wage freeze, insurance changes, and 52 language changes in five meetings.”

Gackstetter offered some words of warning. “So it can be accomplished and I would want to caution the council that the Teamsters efforts to conduct contract negotiations at public comment are unwise for both parties.”

Without further public comment, council woman Pauline Kenner started off the budget discussion by saying she felt village management should take a 4.5 percent pay cut across the board, while village employees salaries should be slashed by 2.5 percent.

“I think that everyone will be able to keep their jobs, and the village should be able to run smoothly after that,” Kenner said.

Council woman Reisa Hamilton agreed with Kenner, but said she felt salaries for all employees – management and otherwise, should be reduced by 2.7-percent across the board. Hamilton said her calculations made the assumption that the parks department could reduce expenditures by $16,331 for mowing and firework reductions, and the elimination of Porta Johns.

Powers said sweeping pay cuts for village employees would not be possible without the union’s blessing. “You can sit and vote on that, but you can’t do that when there are union contracts in place  - you can’t cut peoples’ salaries without discussing that with union negotiations,” she said.

Village President Pete Clemens inquired about how much the village currently pays in deductibles for health insurance. Powers said village police and administrative employees currently pay $1,500 in deductibles for individuals and $3,000 for family plan. The deductibles, according to Powers are paid by the village’s third party administrator. With all employees on the current plan, Powers said the village could stand to save approximately $81,000. Raising the deductible to $2,500 for individuals and $5,000 for families would increase the village’s saving by $92,000.

Powers said to date, the village has only spent about $2,700 in deductible costs. “Beyond that, it’s been $10 office calls – it’s been a minimal cost.”

Downtown business developer Bob Hoffman said he was in favor of raising the deductibles. “If you have a $2,500 per person and $5,000 per family deductible, you save $90,000 a year and every month that goes by, you use one 1/12 of that and you’ll be in your next budget year,” Hoffman said. “I can’t imagine that any bargaining unit would object because they’re getting the exact same coverage,” he added. “You’re self-funding the deductible, they’re getting the same benefits they have now, they’ll save $90,000, and nobody will lose their job in this budget year – to me it just sounds simple.”

Hoffman said he couldn’t imagine anyone filing an unfair labor practice or grievance should the village opt to up the deductible and move employees over to the new plan. “You haven’t lost anything,” he said. “I would implement it tomorrow.”

Councilman Tom McKenney asked Powers if village attorney Mr. Zakoff had weighed in on the village’s potential financial exposure if they were to go ahead with moving the village employees to the new insurance plan without a union contract in place.

Powers said Zakoff indicated that the village could incur between $1,500 and $3,000 in legal fees if the firm was required to represent the village in a unfair labor practice lawsuit, but would save the village $33,000 in insurance premiums by doing so.

“I say we pull the trigger on the insurance change,” McKenney said before making a formal motion that was unanimously approved by the council.

Clemens directed his attention back to Walter’s letter and list of concessions the union would be interested in making. “I think that this list, no matter how it got to us, does point out some decent ideas,” he said. “I think we need to seriously sit down and do this -  we need to get this done.”

“I don’t have a copy, but I did jot down most of them,” Powers said. “Several of these things are not general fund expenditures and I would be happy to sit down with the union people and explain it to them,” she said. “Most of these people are paid out of either water and sewer – there are minimal expenditures here that would affect the general fund.”

Powers said the next scheduled contract negotiation meeting with union business representative Les Barrett, a mediator and village employees is slated for Jan. 29. Powers said since July, Barrett had canceled all other scheduled meetings, and that Jan. 29 was the first possible date on which all interested parties could coordinate a meeting.

“We don’t have to wait until January,” McKenney said, suggesting village management and union employees take one last shot at reaching an agreement before the Dec. 23 deadline.

Village employee Kevin Durgan favored McKenney’s idea. “Mr. Les Barrett is our business advisor, so we can go ahead as a group – as a union – go ahead and represent ourselves,” he said. “The problem is, we have to negotiate with whomever you have chosen to negotiate our contract - we can’t go over and above that, but if you guys would like to sit in and be the other bargaining unit, we would be happy to work with you.”

"We have a problem in that as council members, we're not to be entering into labor negotiations because that is an executive function and it’s restricted by the Village Charter," council man Bill Kuyk said.  "We are the legislators – we legislate and we have a staff that we have hired that take care of the administrative duties."

Powers said under the union contract, village officials are unable to negotiate with union employees without the presence of a union business representative, and that in all of her years of working for the village, Barrett has never agreed to allow union employees to meet without him. "In the 13 years I’ve worked at the village, he will not allow these employees go into any negotiation without him," she said.

“That remains to be seen – we’ve got a meeting in January if nothing else happens,” McKenney said before making a motion for Powers and Clemens to meet with village employees within the next week for one final stab at coming to an agreement. The motion was passed 7-0.

Union representative Les Barrett did not return phone calls for comment.