Interest Arbitration: How to Prepare, Present and Calculate By: Armando V. Riccio, Esq. 609.634.2784 avriccio@gmail.com © 2016 Armando V. Riccio, Esq. All Rights Reserved

Interest Arbitration Police and Fire Different process for other municipal units Non-binding: mediation, fact-finding Presently a “friendlier” process for employers Process starts with filing of an Interest Arbitration Petition by either side Petition: Economic and non-economic issues Non-petitioning party has 5 days to file response Identify non-negotiable items

Interest Arbitration Scope Petitions Ninety (90) day process Must be filed within 5 days of Arbitration Petition PERC can decide (expedited basis) or defer 14 days to appeal post IA Award Ninety (90) day process Starts from appointment of arbitrator Day after response to petition is filed Arbitrator fined $1000 per day. 1st meeting is mediation

Interest Arbitration 2% “Hard Cap” “All-in:” steps, longevity, any amount added to base at the end of the last contract Cap expires after December 31, 2017

Arbitration Award Must Address Nine Factors 1) the interest and welfare of the public 2) comparison of wages, salaries, hours and conditions for police officers to others; 3) the value of the bargaining unit’s entire present compensation package; 4) stipulations of the parties; 5) the lawful authority of the employer;

Arbitration Award Must Address Nine Factors 6) the financial impact on the governing unit, its residents, legal limitations imposed upon it and its taxpayers; 7) the cost of living; 8) stability and continuity of employment; and 9) statutory restrictions.

Preparing for Arbitration Means Preparing for bargaining Assessments Global input Ability to achieve results Bargaining leverage/factors of influence

Global Input Essential to review globally Limit to non-union/confidentials FINANCE!! CFO Assessor Collector Consultants! Brokers

Global Input CFO Budgets/actual expenditures Projects Projections Debt service and impact Cost outs: total compensation package of existing contract, each component AND all proposals Surplus, tax levy and appropriations caps What does a “bad” season or year look like? Impact? Ability to recover? Needs in order to recover?

Global Input Tax assessor/collector Key administration Governing body Assessment/collection histories Within municipality and surrounding areas Within the County and the State Key administration Each position dealing with contract administration Chief/HR Payroll; leaves of absence Governing body Whether first or last in the process will depend NOT a “locomotive” or “caboose” approach

Ability to Achieve Results Knowing the issues (both sides) Likely success through Scope Petition or Arbitration Trends in arbitration awards Trends in comparables: Communities, units, non-union staff Comparisons the union used in the past Internal linkages: other units and overall impact Identifying issues that you’re not required to negotiate Preparing an action plan Scope Petitions “Storming the Bastille”

Ability to Achieve Results Assess the comparisons made by the union Past and present Tax base: rate, ratables and collections Income of tax payers Contract terms: favorable/unfavorable

Scope Petitions: Sampling of Popular Subjects Chapter 78 contributions Opt-out waiver Sick leave verification policies Staffing requirements Minimum staffing, layoffs Selection of health benefits provider Seniority shifting bidding without limitations Civil Service requirements

Chapter 78 IF completion of full phase-in is after the recent contract expired Contributions are NOT negotiable

Calculation of Base Year Not the same as PERC Summary Forms in all respects Base salary: All items paid as part of base salary in the last year of the contract Steps Longevity Any item added to base pay Base year, base salary is starting point Credit for steps and longevity increases paid over course of new contract term.

Hot Button Issues December 31, 2017 end date (??) Chapter 78 contributions 1 year proposals Eliminate specific plan references (Direct-10) “Equal or better” language Cadillac Tax Elimination of Comp Time Reduction in steps: number and/or size Lessen the impact of hidden increases Ending movement (steps or longevity) upon expiration

Hot Button Issues Eliminate or roll-in longevity Lower starting salaries or create academy and probationary rates Eliminate or limit full pay provisions Eliminating retro-pay for individuals no longer employed by the entity 27 pays Retiree benefits Tie retiree benefits to current employees SHBP: Retiree prescription rider only

Factors of Influence Workforce composition Overall vs. within the bargaining unit Unit Job title Union position Ages Retirement eligibility Step/longevity Salary Contribution to premium Hot button issues for larger population wihtin each group

External Factors DLGS Best Practices for 2016 22 of 30 questions must be “Yes” or “N/A” for full State aid Eliminate “full pay” provisions for workers compensation leaves Require Chapter 78 contributions at full phase-in Waiver/Opt-Out limitations

Waivers/Opt-Out Payment for waivers are NOT required by law Requirement limited to set “caps” and calculations Waivers filed before May 21, 2010, and maintained continuously since, fifty percent (50%) of the amount saved Waivers filed on or after May 21, 2010 lesser of twenty-five percent (25%) of the amount saved or $5,000 Payment is calculated based on the amount of savings to the entity.

TIP Never miss out on a good opportunity to shut up

REVIEW OF PERC PAPERWORK

THANK YOU! 609.634.2784 avriccio@gmail.com Armando V. Riccio, LLC Counselors at Law   Labor/Employment Law Civil Litigation 609.634.2784 avriccio@gmail.com © 2016 Armando V. Riccio, Esq. All Rights Reserved