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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 ,, , ,, 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.
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