The Portland City Council is at odds with unions over health insurance benefits for city employees.
What's at stake: If the city maintains all existing benefits and doesn't change its plans, the city's two health insurance plans available to employees will make the city's The cost will be $16.3 million more than last year.
But the city council is currently considering controversial plans. It would lower benefits in these two schemes so that councils would only have to pay an 8% increase in costs compared to last year, rather than the 11.9% increase they would have to pay to maintain all existing benefits. The City Council is scheduled to vote on the proposal next week.
The union representing a majority of the city's 7,500 employees is furious about that possibility. This is because employee benefits will be reduced due to increased co-payments and other factors.
“This effectively gives all city employees a pay cut without giving them the ability to negotiate,” said Isaac McLennan, president of the Portland Firefighters Association. “Typically, you end up negotiating benefit plans. This is circumventing that system.”
The City Council held a closed executive session on the issue Tuesday morning. City leaders who were present said council members recognized the need to reduce the increase in expenses to avoid further strain on the Department of Infrastructure's budget, which is facing particularly severe fiscal constraints this year. It is said that they matched.
The city received an unexpectedly high health insurance bill earlier this year as city officials looked ahead to a tough budget cycle with across-the-board cuts.
Those high estimates were passed on in January to a city committee made up of labor representatives and the city manager called the Labor Management Benefits Board. The commission acts as the city's insurance plan administrator and makes annual recommendations on how to control costs. That committee usually takes place under the radar.
But this year, the company that negotiates benefit plans with health insurance providers on the city's behalf told the benefits commission it is considering a 14% year-over-year cost increase if the city maintains all current benefits. said. The city's health insurance brokers spent the next few weeks negotiating with both health insurance companies to keep the increase to an average of 11.9%.
The City Budget Office recommended earlier this year that departments consider only a 5% cost increase for benefit plans. When the higher estimate came back, the city faced a multi-million dollar budget gap if it wanted to maintain its current profits.
On 19 March, Labor MPs on the Benefits Committee rejected a range of proposals to cut benefits. It is rare for the benefits committee to be unable to reach an agreement to send a proposal to City Council.
Despite union complaints about benefit cuts, the city council is expected to vote next week on a proposal that would limit overall cost increases to 8%.
Even if the City Council approves the 8% increase, it would still have to come up with $4 million from this year's already tight budget to cover the cost.
Unions dissatisfied with the proposal include American Federation of State, County and Municipal Employees Local 189, Federation of Professional and Technical Employees Local 17, North American Workers International Union Local 483, and the Portland Firefighters Association.
PROTEC17 trade union representative Rachel Whiteside says the benefits committee model has worked well for trade unions for decades. “This year, in addition to not having enough time to have a values-based discussion, there was a lack of transparency from the city,” Whiteside said.
Rob Martineau, president of AFSCME Local 189, said the union “recognizes the difficult financial situation facing the city,” but “is calling on elected leaders to meet their responsibilities as employers. “We are asking them to prioritize the need for stability during this time.”
But union power here is limited. The contract with the city includes a breakdown of costs, but does not include benefits. This means councils do not have to negotiate with trade unions over the details of benefits. Because unions, by all accounts, have left the power to decide what to submit to Congress in the hands of the benefits committee.
But some unions have more influence.
The Portland Police Association, which represents rank-and-file police officers, has insurance benefits built into its contract with the city. That means any changes the City Council wants to make would have to be voted on and approved by council members. This gives police unions more leverage than other unions to push back against city councils if they choose to cut benefits.
“Our interests are spelled out in our union contract,” says PPA President Aaron Schmautz. “Changing these would require a vote of the members and a vote of the City Council. Making changes without equivalent agreement would require some litigation.”
Schmautz said the PPA “does not support benefit changes for city employees” at this time and declined to comment on PPA's negotiations with city employees.
