PORT OF SEATTLE
MEMORANDUM

COMMISSION AGENDA .             Item No.      40

ACTION ITEM              Date of Meeting   January 12, 2016

DATE:   January 5, 2016

TO:     Ted Fick, Chief Executive Ofcer

FROM:  David Freiboth, Senior Director of Labor Relations
Kim Ramsey, Labor Relations ManagerM

SUBJECT: New collective bargaining agreement with the International Union of Operating
Engineers, Local 286, representing Operating Engineers.

Total Port Cost Increase for the Duration of the Agreement: $1,086,344

ACTION REQUESTED

Request Commission authorization for the Chief Executive Ofcer to execute a new collective
bargaining agreement (CBA) between the Port of Seattle and the International Union of
Operating Engineers, Local 286, covering the period from June 1, 2014, through May 31, 2018,
and affecting 102 Operating Engineer positions.
SYNOPSIS
v
This four year CBA covers the period from June 1, 2014, through May 31, 2018. The estimated
total additional cost for wages and benet increases is $1 ,086,344. The estimated additional cost
per year of the contract is: year one, $332,863; year two, $178,685; year three, $276,616; and          "mamasNW",
year four $298,180.

Caps on the employer portion of monthly medical benet premiums were established along with
a cost sharing formula for premium increases over the established caps. Employees will receive

a lumpsum of 2.8% on gross wages earned from contract       to execution of the                 expiration
agreement. Employees shall also receive a base wage increase of 3% upon execution and two
additional base wage increases of 3% in the last two contract years. In making this agreement,
consideration was given to the public health and safety aspects of the Operating Engineers scope
of work as well as the breadth of fabrication and design work performed by the group.

BACKGROUND
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,

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International Union of Operating Engineers, "Local 286, represents a bargaining unit of 102
Operating Engineers who work under the direction of the Aviation Maintenance Department. At
Sea-Tao International Airport, these employees are responsible for operating and maintaining the          "mmuw

COMMISSION AGENDA
Ted Fick, Chief Executive Officer
January 5, 2016
Page 2 of 4

baggage conveyance and passenger load bridge systems; the airport's clean water and industrial
waste water utilities, as .well as operating and maintaining the sanitary waste infrastructure; the
heating and cooling systems of airport facilities, including the preconditioned air system that
reduces greenhouse gases caused by idling aircraft, and many other mechanical systems
throughout the Port.  The previous agreement expired on June 1, 2014. RCW Chapter 41.56
requires the Port of Seattle to collectively bargain wages, hours and working conditions with the
exclusive bargaining representative designated by the employees.

SCOPE OF THE AGREEMENT

Term of the Agreement

June 1, 2014, through May 31, 2018.

Wages:

Effective Upon Execution:            Two and eight tenths of a percent (2.8%) on gross
wages from June 1, 2014 in a lump sum.

Base wage rates shall be increased by three percent
(3%).

Effective June 1, 2016:               Base wage rates shall be increased by three percent
(3%).

Effective June 1, 2017:               Base wage rates shall be increased by three percent
(3%).

Health and Welfare

Employees in the bargaining group are currently enrolled in the union's construction industry
health and security trust for medical benets. The agreement establishes the following caps on
employer contribution to monthly premiums.

Effective June 1, 2015      $1 150 per month
Effective June 1, 2016      $1225 per month
Effective June 1, 2017      $1300 per month
.

Increases above the caps shall be shared equally between the Port and employee up to a 10% /
90% premium share between the employee and the Port.

Based on historical premium increases the cost of this health plan will not reach the applicable
threshold under the Affordable Care Act to trigger the 40% excise tax for high cost plans until
well after the expiration of this agreement.

. COMMISSION AGENDA
Ted Fick, Chief Executive Ofcer
January 5, 2016
Page 3 of 4 '

Pension

The Port contributes to the union's dened benet plan in lieu of contributions to the state's
retirement system. This new agreement converts two pension contributions (one based on an
hourly rate of $3.35 per hour compensated and one based on a percentage of gross pay) to one
pension contribution based on percentage of pay equal to 16.5%, the rough equivalent of the
current contributions made.

Other Changes

Modications in Article 3 ~ Union Security and Rights of Parties add language that
'
supports the Port's due process obligations for employees terminated for non-payment of
dues; add indemnication language to protect the Port against legal actions related to dues
deduction; and provides for payroll deduction of union dues with employee authorization.
Adds new 3.05 that provides for bargaining unit members to participate in the Port's tuition
reimbursement program.

Modication1n Article 4 Equal Employment Opportunity standardizes language across
cdntracts.

Modifications in Article 7 ~ Seniority clarify that the termination of an employee, during
the 800 working hours probationary period, shall not be subject to the grievance procedure;
and applies the just cause standard for discipline, and termination to'regular nonprobationary
employees only.
Modications in Article 8  Scope of Work and License Premium and Reimbursement
add language providing for schedule adjustments in order that approved work related training
may be conducted on regular work time.
Modification
in Article 10 Pay Schedule, Appendices, and Addendum Incorporated
into Agreement requires as a condition of employment participation in the Port'3 direct
deposit program.
Modication in Article 14  Vacations provides for an enhanced leave accrual benet
whereby employees receive accruals equal to three weeks of vacation after three years of
continuous employment.
Modications in Article 23  Union Activities provide required notication by the union to
the Port of appointed stewards and limits number of stewards in negotiations and
grievance/disciplinary meetings; participation by stewards in negotiations on work time and
establishes a formal Labor/Management Committee.

Modication in Article 28 - Safety Shoes increases the yearly safety shoe allowance from
,
$100 to $120.

Attached MOU 1  agreement to meet and discuss 4X10 work schedules for off shifts. '
WW

COMMISSION AGENDA
Ted Fick, Chief Executive Ofcer
January 5, 2016
Page 4 of 4

'
0
.      Attached MOU 2  agreement to except certain individuals from the requirement in Article
10 to participate in the Port's direct deposit program.

0  Attached MOU 3  agreement providing for certain license reimbursement.

.' Appendix A  Pay Rates

Current rates and classications as lled 5/1/2105

Chief Engineer                          2                $46.72
1
r
'
Mechanical Maintenance Engineer Head  AWS     1               $43 68
1
Mechanical Maintenance Engineer AWS                        $38 07
'
Mechamcal Maintenance Engineer                            $37 37
'
Mechanical Maintenance Englneer Head 7          $42.98
___1_
___' 40
_n 
___ 2
The new agreement brings the minimum rate for Journeyman Operating Engineer to $3 8.49.
'
These employees work 40 hours per week.   '

FINANCIAL IMPLICATIONS

$237,712   $143327   $222,808     $240,178"
$95,151    $34,758    $53,808   ,   $58,003
$332,863   $178,685    $276,616     $298,180

The estimated total additional cost year over year to the Port for the duration of the contract is
$1,086,344. '

Budget Statics and Source ofFunds
The increase in expense is included in the Aviation Division budget.

ATTACHMENTS TO THIS REQUEST

o   Collective bargaining agreement

PREVIOUS COMMISSION ACTIONS 0R BRIEFINGS

0   None.