After five labor contracts were voted down by City Council just over a week ago, the JEA board of directors was in a different situation Tuesday.
It served as its own legislative body to decide on a labor contract and it approved a 3 percent pay raise and retirement changes for 175 workers at the St. Johns River Power Park.
The St. Johns River Power Park is jointly owned by JEA and Florida Power & Light. The JEA board of directors acts as its own legislative body to review contract disputes.
The JEA and International Brotherhood of Electrical Workers Local 1618 reached an impasse over a contract covering fiscal years 2010, 2011 and 2012. The Local 1618 declared an impasse Oct. 4, 2010, but the parties continued to negotiate.
JEA then declared an impasse on all three years June 17, 2011. The process concluded Tuesday with the impasse hearing.
The board of directors unanimously voted to impose contract provisions to freeze the existing defined benefit pension plan for employees with less than 20 years of service and replace it with a new retirement program.
The new retirement program will comprise a cash balance plan, and an employer match in employee deferred compensation accounts.
Both the JEA and a special magistrate assigned to make recommendations on the contract negotiations agreed that the current defined benefit plan was not sustainable.
“According to a survey by the State Division of Retirement, 36 Florida cities have replaced traditional pension plans with a defined contribution plan,” said Tim Strong of Fowler White Boggs, representing JEA during the impasse hearing.
The special magistrate’s recommendation also supported transitioning to a new plan, saying the “fundamental measure of imprudence” of the defined benefit plan requires an unquantifiable funding commitment be made based on long-term assumptions.
“Assumptions, as recent history has shown, can be wrong and when they are wrong the public employer, and, ultimately, the public must pay the bill,” said the recommendation.
Richard Siwica of Egan, Lev & Siwica of Orlando, the attorney for Local 1618, explained that just because other cities are changing their pension plans isn’t reason enough for the new plan.
”The employer’s proposal is unjustified on any actuarial basis. All we’ve heard is that there are some other employers around the state of Florida that are ditching their defined benefit plans and, therefore, we should do this too,” said Siwica.
“With all due respect, that simply does not amount to shouldering the heavy burden an employer has to toss a long-standing defined benefit plan,” he said.
Other items approved as part of the contract include two years of no wage increase, followed by a 3 percent general increase in the contract’s final year (effective October 1, 2011), a baseline health care plan and clarification of overtime provisions and related work rules.
Union leaders will take the proposed plan to its membership, but if the membership votes against the offer, it will be imposed by the board, according to JEA spokeswoman Gerri Boyce.
If the membership votes against the offer, the decision could set up more difficult negotiations because the contract will end in 2012.
City Council President Stephen Joost is the Council liaison to the JEA and spoke about the recent disappointing vote that took place in Council chambers regarding five other labor contracts.
“I’d like to say to the (JEA) employees, don’t despair. We’ll get another shot at this. Number one, JEA took a 5 percent pay cut three or four years ago and laid off over 300 contract employees and took the necessary steps that we needed to take years ago while other employees were still getting their raises,” said
Joost.
“I thought it was an issue of fairness, but unfortunately we got caught up in the political atmosphere in the larger economy of what is going on. What we need to do is regroup and go back and make the case,” he said.
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