New contract includes wage freeze, curb on stand-by pay for city workers

• Duluth City Hall

File photo / News Tribune

Talk about it

The Duluth City Council is expected to approve a one-year contract with the city’s largest union Monday that will freeze wages except for step changes and reduce the standby pay that utility workers receive for being available around the clock.

The council vote will formalize an agreement with American Federation of State, County and Municipal Employees Local 66, which represents about half the city’s work force of about 800 people.

The change in stand-by pay is expected to save the city between $70,000 and $75,000 per year, said to Dave Montgomery, Duluth’s chief administrative officer.

Another $20,000 to $25,000 in annual savings will be realized in 2012 when the city shifts to an automatic direct-deposit pay system, thanks to the new contract.

Montgomery said standby pay became “a hot-button issue” after an article on overtime pay in the Duluth News Tribune last March.

Utility workers who remain on call after hours were entitled to standby pay at a rate of 1.5 times their regular pay under the old contract. The new contract will reduce standby pay to the straight hourly rate. Standby pay is collected whether an employee’s services are needed or not. If an employee must respond to a problem, he or she also collects call-back pay at a rate of 1.5 times regular pay.

Because the city operates its own natural gas utility, it is required by law to have someone on standby for rapid response at all hours, Montgomery said.

If Duluth were not in the natural gas business, it could employ a less expensive call-back system, as many other cities do. People on standby for natural gas issues in Duluth routinely do double duty, responding to other types of emergency incidents such as water main breaks, as well.

Deb Strohm, a city employee and member of AFSCME Local 66’s negotiation team, said workers on standby can’t leave town and never know when they’ll be needed morning or night.

“People on standby spend 128 hours a week next to the phone ready to rock and roll at the drop of a hat,” she said. “These guys that are on call are giving up their personal lives.”

Nevertheless, Strohm said workers were willing to make concessions on standby pay given the budget constraints facing the city.

“We stepped up to the plate to help the city out,” she said. “We’re trying to have honest, open communication with the administration. And we’re doing everything we can to make ends meet.”

Montgomery said the city spent about $365,000 last year on standby pay, and the new system will reduce that sum by about 20 percent. Still, the resulting $70,000 to $75,000 in savings equates to only about 3 percent of the $2.46 million in premium and overtime pay the city spent last year.

AFSCME members voted to ratify the proposed contract Feb. 8, following a tentative agreement between negotiation teams for the city and union reached Jan. 20. Negotiations began in November.

“I think AFSCME wanted to get to an agreement quickly this year, given the funding uncertainty coming out of St. Paul,” said Montgomery. “They seemed to recognize the situation the city was in.”

Duluth City Council President Sharla Gardner offered praise to negotiators on both sides Thursday.

“I’d like to commend you folks,” she said. “I know Rome wasn’t built in a day, but some progress has been made, and I appreciate the work you’ve done. I think we’re starting to get a little more on track.”

The city has yet to successfully negotiate new contracts with its police, firefighter and supervisory unions.

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