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Region fractures over how to bargain in advance of next big round of contracts

May 12th, 2011 · 34 Comments

Metro Vancouver has always been an odd beast, as politicians from 21 municipalities with weighted votes make decisions about all manner of issues that they sometimes have wildly differing opinions on.

It has seemed even more fractious lately, with the tussling over the new growth strategy. And now the complete disarray, some say gong show, that is going on with what to do about labour relations and collective bargaining. (And that means 72 contracts for 15,500 workers, by the way.)

Seven of the 18 municipalities that participated in the Labour Relations Bureau, as they call it, have now left or served notice to leave. Now everyone’s trying to figure out, What next.

A just-released (after being held in secret for a month) report by labour consultant Jim Dorsey says the big municipalities should just go, if they want to, and the smaller municipalities should band together in an employers association. Richmond Mayor Malcolm Brodie told me yesterday he thinks that’s the wrong way to go, that Metro Vancouver should do what all of the city administrators recommended, which is to have the district provide a menu of services to all the municipalities that can be provided on a fee-for-service basis.

West Van’s director of human resources said that, even though that municipality has served notice to leave, they might consider staying in if the whole function can be restructed. The City of North Vancouver wanted to force everyone to remain in the collective bargaining group as a condition of being part of Metro Vancouver. Apparently legal letters are flying around with differing opinions on whether municipalities that have given notice will be allowed to do their own bargaining when contracts expire this December or whether Metro is still in charge.

And who cares? Well, all taxpayers should. Contract costs make up more than half of spending in any tax increase. They set the bar for what non-union staff get too. If municipalities are in disarray and they end up settling for rich contracts, guess what that means?

Many of them say that, with the regional system broken apart, they’ll actually be able to come to more reasonable agreements with their local unions. Hope so. The problem is that it’s so hard for the general public to assess. We schlubs in the media and public tend to focus on percentage wage increases. But there are lots of other pieces of contracts (benefits, vacations, sick pay and more) that can cost money.

As the Dorsey report shows, by comparing just the firefighter costs for each municipality, the salaries per firefighters and the cost to the taxpayer vary widely. New Westminster pays its firefighters the most at $88,291 per firefighter. But it only has 1.4 firefighters per 1,000 population. In West Vancouver, there are 2.2 firefighters per 1,000. So even though each firefighter in West Van is paid $68,111, the cost per 1,000 taxpayers is $152,557 compared to New West’s $122,219.

One of the best recommendations Dorsey makes is that collective bargaining agreements be put into an open database that the public can look at. That’s a start. Distilling those agreements down so that the public can truly understand what they are paying for, when all parts of the contract and the level of staffing are included, would be even better.

The report, by the way, is fascinating reading, since the bitterness that exists between the municipalities bubbles up frequently. (Here’s a link to it, which is weirdly only on Geoff Meggs’ site, but not on the Metro Vancouver site.)

This paragraph, for example, highlights the fears that some municipalities have that others will give away everything to their unions because they can afford it, without any concern for the consequences that will have for others,

Some believe the success since 1983, when the current letters patent were issued, has led to an erroneously diminished assessment of the risk of work stoppages, whipsawing and leapfrogging. They believe national and international unions will take advantage of any erosion of employer solidarity. A broad-based defensive organizational structure must be maintained and strengthened to prevent undisciplined, wealthy municipalities from making agreements, some say sweetheart agreements, for which everyone else will have to pay in taxes or realigned budgetary priorities.

 

Categories: Uncategorized

  • MB

    A little context, please Frances.

    If memory serves, Richmond was the first municipality to break away from the Metro labour negotiating table and offer their local union an unheard of 5-year contract with increases that, over the last three years, exceeded the cost of living for the first time in a generation. The spectre of a strike during Olympics undoubtedly played a role in this settlement. Burnaby followed suit (management offered the same deal to the union out of the blue), then a host of other cities settled.

    At the same time Vancouver, under Sam, proceeded with a three-month strike, but ironically ended up with a similar contract after a pointless exercise in pain for all Vancouverites, not just city workers.

    This 5-year contract followed a long series of 3-year contracts that featured percentage increases with more Zeroes than Ones, and only an occasional Two. Public sector workers in the Metro lost against the average rate of inflation for almost 15 years until the current contract.

    Moreover, after 2003 the Olympics drove local inflation rates (notably through construction) to one of the highest and most sustained rates in the country. Both the public and private sectors suffered from project labour cost increases from 15% to 45% for five years straight, which practically blew every municipal engineering budget in the region.

    During that time public sector workers saw private construction labour rates exceed theirs (despite the myths perpetrated by anti-union folks), and municipalities witnessed some workers leaving for higher-paying construction jobs on Olympic venues. Several private construction companies told me they had to increase their labour rates radically just to keep their workers.

    The perception last time was that Metro negotiators were taking an uncessarily hard stance against the unions in their deliberations, and some municipalities saw that as uncessary, or a magnification of the potential for labour disruption down the road, and preferred the collective bargaining process to play out in an unforced way.

  • MB

    Correction:

    “Both the public and private sectors suffered from project labour AND MATERIALS cost increases …”

  • Bill

    I hope you keep on this issue of complete transparency of costs and services as neither the unions nor management will want to see it – they would prefer to cherry pick the stats to show either the workers are falling behind or that the city is doing a good job of managing costs. I am sure these analyses have been made, they just need to be made public. A good project for the Fraser Institute?

  • spartikus

    A good project for the Fraser Institute?

    Interesting choice. The Fraser Institute brings a lot to the table. There’s that open agenda, of course, but also an ability to consult with those beyond the grave….

  • Bill

    Clever and ducks the issue of transparency in public spending because then you couldn’t cherry pick statistics either. I’m surprised you didn’t suggest the Centre for Policy Alternatives.

  • PGH

    @MB … excellent cherry-picking of stats in an effort to support a biased conclusion … as Frances pointed out in her article … “We sclubs (sp) in the media and public tend to focus on percentage wage increases. But there are lots of other pieces of contracts (benefits, vacations, sick pay and more) that can cost money.”

    Who cares what the % increase is if we (the public) have no idea what the starting point was? Giving someone making $15/hour a 3% increase sounds much worse than giving someone making $35/hour a 1.5% increase. And don’t even get me started on the costs of pensions and benefits … costs that are often completely ignored in the press.

    I for one can’t believe that collective bargaining agreements with public unions aren’t available for public consumption in a completely transparent format. Until that day expect to see unmanageable budgets facing all city councils (regardless of political ideology).

  • spartikus

    I for one can’t believe that collective bargaining agreements with public unions aren’t available for public consumption in a completely transparent format.

    Let me Google that for you.

  • Gerry McGuire

    spartikus-how’d you do that? Pretty cool. Thanks, too.

  • Max

    @PGH #6

    100% in agreement.

    If you are spending monies provided by the public purse, then the holders of that purse have a right to know what the costs are, in total.

  • Bill

    “Let me Google that for you”

    Well that is certainly more sophisticated than Chris Keam’s Wikipedia searches but I think the relevant point was “in a completely transparent format”. Simply offering up the collective agreement isn’t sufficient as Frances notes that manning levels, just to name one other variable, are important in assessing service levels.

  • George

    Spartikus I want to know how you did that…. very cool…

  • PGH

    @Spartikus … Just great …. there goes my spare time this weekend!!!! 😉

    While the Collective Agreements are a great start. Reading through them I still have a tough time figuring out what benefits packages are actually worth to an employee (ie. what they cost the taxpayers to provide).

    I can see what an employee gets paid for a base wage, overtime, holidays, etc… but the rest of the benefits package is not given a cost in the CBA documents. And as they say … the devil is often in the details.

    As I mentioned above … Until the day comes that the public actually understands the FULL cost of the Collective Agreements that politicians negotiate with public unions you can expect to see unmanageable budgets facing all city councils (regardless of political ideology) … so expect higher taxes, cuts in services, or both.

  • MB

    @ PGH 6:

    “@MB … excellent cherry-picking of stats in an effort to support a biased conclusion …”
    ———-

    I presented factual information based on my own experience as a public sector project manager. I really did experience project bids that increased 15%-45% over a period of five years. My private sector colleages had the identical experience, and we all bemoaned the huge spike in construction costs.

    Moreover, as Sparti has so ingeniously demonstrated, all the public sector contract info you want is published in the public realm, including pensions and other benefits. These are not hidden. Every single city has its own collective agreement document and it is distributed to every employee it covers.

    I can’t speak for the management level of either the public or private sectors. I suggest your “unjust enrichment” tone should focus on them, not on the unionized public workers whose numbers are skewed heavily toward the operations crews and commnuity centre employees who average far less than the $35/hr figure you pulled out of the ether.

    But then, of course, you can always don a moniker and run for office on a platform of replacing the municipality with a private corporation run by Fraser Institure alumni in council chambers.

    But the poor pleberatti may then find council meetings a little musty and dry, like so last century, and uncannily quiet.

  • spartikus

    Here, let me Google “Let me Google that for you”

    🙂

  • spartikus

    @PGH

    The City of Vancouver spent $672,252 in 2010 on wages, salaries and benefits.[pg. 31]. There are, according to the City’s website, 9000 employees. That’s an average of $74, 694 per employee for pay and benefits.

    Some get more, many get less.

    According to the Census, the median total income for residents of Vancouver was $68,670. I am not sure if “total income” includes benefits.

  • spartikus

    Sorry, 3 zeros missing – that should read 672,252,000.

    In 2010 1630 CoV employees earned more than 75k in remuneration. Total is $153,056,414

    For the approximately 7,370 remaining employees, the total was $227,407,421. Or, an average of $30,855.

    This doesn’t include benefits I’m assuming, but adding the two totals together we can guess the City paid out $291,788,165 for benefits.

  • PGH

    @MB …. you are the one suggesting a bias by labeling me with an ‘unjust enrichment’ tone. Not me. All I’m suggesting in understanding what services actually cost. For the record, suggesting that the details on benefits and pensions are available in detail is complete BS. Base wages, overtime rates Yes … Pension costs … where? show me?

    The $35 figure was an example used for a demonstration of how dealing with just plain % increases can cause misrepresentations. But the fact that you chose to drag ‘operations crews and community (sp) centre employees” into the argument only shows your bias and proves my (and Frances’) point. There is more to a persons pay package than what they actually get per hour. The trend in recent (past 20-odd) years in labour negotiations has been for employees to forgo wage increases for benefits increases. Then ‘management’ and ‘labour’ can both claim victory but for some reason costs continue to spiral upwards. The reason being is that benefit costs are often future or variable costs.

    I don’t doubt for a second that you experienced increases of 15%-45% over a period of five years. I was also involved in the building/construction industry during the lead up to the Olympics. The issue you fail to mention however is that those costs have fallen as supply and demand has slowly returned (in most cases) to sane levels. But once costs are set in collective agreements they rarely fall by much if any. Not to mention I wasn’t paying my dry-wallers a benefits package or pension contributions.

    @ Spatikus … thanks again I think you are correct, but as you yourself can see it’s tough to get an idea of how the costs of these contracts actually translate into costs once they are in practice.

    I’ll try to provide a couple of examples of the kind of issues I think are relevant to this type of discussion. Please see below …

  • PGH

    Example 1: Sally the firefighter/police officer … the CBA will show what she gets paid on an hourly wage and what her defined work week looks like. For example the CUPE 15 agreement says the work week is 5 days x 7 hours = 35 hours/week, then overtime. I’m not sure about a police officer or firefighter but looking at a CBA doesn’t tell me the whole picture. I have friends that are firefighters and I’ve discussed with them the rate of pay in their contracts and what they actually end up getting paid because their jobs include a certain amount of ‘regular’ overtime. So does an average week look like what’s in the CBA or is it actually significantly different? And as Frances pointed out, staffing levels can have a huge effect on costs to the taxpayer.

    Example 2: Bob the teacher. Yes, I know Bob is not a city worker but I’m going to use him as an example to illustrate the future costs of Benefits. Bob starts work after 5-6 years of university. Maybe he can’t get hired right away and spends a couple years on the on-call lists. At 25 he is lucky to get a full time job. When is he able to retire 50, 55, 60 years of age? At that point he has a pension. He has paid into the pension but the variable risk of providing that pension sits with the employer who has to keep the pension funded until Bob passes away. What is the ‘value’ of the pension? It is not insignificant. Think of it this way. How much would it cost for Bob to purchase a life annuity from Manulife on the day he retires?

    How much would he have had to save over his work life to purchase that annuity? That is the extra value of that pension. There are lots of moving parts that differ from agreement to agreement but governments all over the world (including Canada) are dealing with the costs of agreements signed 10, 15, 20 years ago.

    There is no way the employees that worked in good faith under those agreements should be affected, and I’m not suggesting that benefits be retroactively changed, but I think Unions and Politicians need to be as honest as possible about the costs of these agreements.

    Boiling labour costs and negotiations down to simple % increase is pointless it only tells a small part of the story?

  • david hadaway

    Spartikus, more statistical wizardry!

    You appear to be comparing an average personal income with a median family income. I think this bears out the need for clear, comprehensible statistics.

  • spartikus

    You appear to be comparing an average personal income with a median family income.

    Yes, that’s right. I should have pointed that out.

  • david hadaway

    Checking statcan.gc.ca as you probably did Spartikus, I get, for 2008, a median income of $28,560 for BC and average earnings for someone with a bachelors degree of $46,361. Plenty more information available for those who care to look.

    Those City Hall jobs are starting to look good!

  • Bill

    @spartikus #15 and#16

    Where did you get your 9,000 employees from. The only information I could find was a transportation report from 2004 which indicated 9,000 employees including full and part time. In order to get a valid average one would have to use a full time equivalent total.

    Your median income for Vancouver residents appears to refer to family income for all census families for 2008. Not really appropriate to use to compare to average individual compensation for City workers.

  • spartikus

    People in Vancouver probably earn more than the provincial average. My figure of $68,670 is the median household income for Vancouver, defined as couple families, with or without children, and lone-parent families.

    Another question to ask is how is Statscan defining income. According to this, it’s in essence anything taxable, but I’ll welcome people who understand this lingo better than I to go through it.

    If we divide the amount the City pays in benefits in the same ratio as remuneration b/w those that earn more then 75k vs those that earn below, then you can add approx. 20k to the average 30k remuneration.

    Another thing to keep in mind is most City positions do require a university degree.

    Again, caveats, this is all very rough. The important point is the information is available.

  • PGH

    @ Spartikus … why should we need to estimate the rates of renumeration, into salary and benefits? How about an simple table with the no. of full time vs. part-timers. As you suggested a base salary range breakdown, lets say 0-25k, 25-50, 50-75, 75+ and the benefit costs for these groups.

    My understanding of Stats can is that the income number is your T4 figure. It doesn’t include your pension. A person would declare that income in the future, when they recieve it, but it is a current cost for an employer.

    So declaring a person with a pension vs. someone that has to save in an RRSP will not give you an accurate comparison.

  • Bill

    “Again, caveats, this is all very rough. The important point is the information is available.”

    We wouldn’t have to be guessing about number of employees, are they full or part time, what is included in costs etc if the information was readily available. We shouldn’t be forced to put together sketchy data from various sources – at the very least the City should be reporting staffing levels and compensation by service area in form that can be compared to prior years and other municipalities.

    I suspect this information is all available (there must be a few Commerce graduates in that sea of University degrees at City Hall) but unlikely to paint a picture of good stewardship or the politicians would have ensured that it would be showcased and not hidden. But how could you put a positive spin on the statistic “the average city employee makes more than the average Vancouver family” that you were able to ferret out for us.?

    Everyday there seems to be another story about salaries and benefits in the public service (journalists are taxpayers too). I think it is just the beginning.

  • spartikus

    We shouldn’t be forced to put together sketchy data from various sources

    You mean the Annual Report and Financial Statements (signed off on by Price Waterhouse) prominently available on the website.

    #headdesk

  • spartikus

    So declaring a person with a pension vs. someone that has to save in an RRSP will not give you an accurate comparison.

    The point was Statscan “median household income” might not include benefits. It might not be fair to compare CoV’s remuneration + benefits to that figure.

    How about an simple table with the no. of full time vs. part-timers [ETC]

    A challenge to everyone: please provide an example of another government or private sector business that does this.

  • spartikus

    Just to reinforce how ridiculous some of this criticism is: every employee who made over $75k was listed in the Financial Statement by name.

  • Bill

    “A challenge to everyone: please provide an example of another government or private sector business that does this.”

    It is irrelevant what a private sector does or does not disclose. They do not have the power to tax me to pay for their labour costs.

    “Just to reinforce how ridiculous some of this criticism is: every employee who made over $75k was listed in the Financial Statement by name.”

    This is really useless information except for the family and friends of the employees who are curious what they make. I am more interested in what they do to receive those salaries and how does that compare to the private sector.

  • Bill

    “You mean the Annual Report and Financial Statements (signed off on by Price Waterhouse) prominently available on the website.”

    Actually, I was referring to the number of employee data because if you want to calculate an average salary you need to divide the audited salary number by the number of full time equivilentemployees. That number is sketchy – you ducked the question of where you got your 9,000 employees from.

  • spartikus

    It is irrelevant what a private sector does or does not disclose.

    You are making the claim that the “lack” of financial information the City of Vancouver provides is, somehow, not standard. You could, of course, provided an example from another government to make your case. But no, you choose to focus on the private sector. As for being irrelevant, I find it pretty hypocritical to hold government to a level of detail in disclosure for each and every employee while not having the same expectation for potential stockholders how the company they’ve invested in compensates their employees.

    I am more interested in what they do to receive those salaries and how does that compare to the private sector.

    Heh…this is the first time you’ve said this. Your goalposts aren’t just on wheels, they’re on rockets.

    you ducked the question of where you got your 9,000 employees from.

    I provided the source when I brought it up, but here it’s only where you would expect it. I’m sure it’s not exactly 9000. It might be 9001. Or 8999. But you would have to be pretty obtuse to dismiss what was put forth as rough calculation just on that.

    Here’s a crazy idea, you could email the City and ask for an exact number!

  • Bill

    “pretty hypocritical to hold government to a level of detail in disclosure for each and every employee while not having the same expectation for potential stockholders how the company they’ve invested in compensates their employees”

    Not sure how a potential stockholder is already invested but that is not important. What is important is that I can choose to invest in a company or not. And there are analysts who poke around company disclosures that are extremely detailed with relevant metrics. Metrics that might be relevant to the public sector may not apply to the private so your comparision to the private sector is absurd.

    And where did I suggest that there should be disclosure for each and every employee? I suggested that having compensation and number of FTE’s by service area would be a good start.

    “Your goalposts aren’t just on wheels, they’re on rockets. ”

    I was responding to your comment that listing all employees earning over $75,000 was useful disclosure. It isn’t.

    “But you would have to be pretty obtuse to dismiss what was put forth as rough calculation just on that.”

    I did not dismiss the rough calculation, I simply said we should not have to guess what the number actually is and how it relates to FTE’s. What was egregious is how you compared this calculation to a Stats Can calculation (of median household income) to imply that the average employee doesn’t earn that much more than the average resident. That kind of backfired, didn’t it?

  • spartikus

    And there are analysts who poke around company disclosures that are extremely detailed with relevant metrics.

    And analysts never have their own agendas and always give their clients the best information possible. As recent history on Wall St. has shown. But please, use a public sector example from any jurisdiction in the world to show Vancouver’s practice is shady.

    What was egregious is how you compared this calculation to a Stats Can calculation (of median household income) to imply that the average employee doesn’t earn that much more than the average resident.s

    Right. If I had actually been trying to be deceptive I wouldn’t have provided the details of my sources that would allow others to double-check (hobbled as always be the one link per post limit here), I wouldn’t have used words like “median” and “average” and I certainly wouldn’t have written my #20.

    But by all means, accuse me of being “egregious”.

    Meanwhile I’ll write the email you seem reluctant too, and I’ll even throw in a request for those who make over $75k to provide a note from their Mum and Dad stating what they do.

    Zzzz…

  • Bill

    “and I certainly wouldn’t have written my #20”

    You were busted, what else could you say. But the unintentional consequences are that you demonstrated that the average city employee makes more than the average Vancouver family. Very timely too as collective bargaining gets underway this year.