SHELBY TOWNSHIP — On Oct. 16, the Shelby Township Police Department Patrolmen’s Association, which includes about 50 officers, filed a petition for arbitration 312, or to have a third-person party mediate demands between the union and the township, since striking is illegal.
A videoconference is scheduled for Nov. 8 for the two parties to initialize the process, which must be completed within 180 days, as mandated by the state act. The arbitrator’s decision will be binding.
Supervisor Rick Stathakis said he and his staff were shocked when they received the letter.
“We sat down with (union representatives) to negotiate. I call it step one, and they made us an offer,” Stathakis said, adding that it was dead on arrival because it called for increased wages, earlier retirement and a fully funded health savings account. “Instead of round two, round three, round four, they went right to the arbitrator.”
He labeled the move as a “slap in the face” because the Police Department has accrued $35.5 million in unfunded pension and retirement liabilities, and the police budget is experiencing a $1.7 million deficit per year. Stathakis said that the township cannot afford the union’s demands.
Stathakis said with the union’s demands, the total liability costs would increase to $40 million and that his No. 1 priority is to reform the pension plan and convert it to a system that general township employees utilize, which is similar to a 401(k) plan.
“We need them to help us find savings, not spend more money,” he said.
Stathakis added that he was displeased when information that was supposed to be confidential was brought to public attention at a township board meeting.
“We can’t have it both ways,” he said, adding that the union initially wanted everything conducted in private. “We need either closed-door meetings or out in the public on camera in the boardroom, which I prefer, but we’ll honor what they want to do.”
Jim Tignanelli, the business agent for the union and president of the Police Officers Association of Michigan, said he chose the path of filing for arbitration 312 reluctantly but out of necessity because the union’s contract expired Dec. 31, 2012, and an agreement has not currently been reached.
He said the township submitted a proposal Nov. 5, 2012, that called for a premium reduction for the night shift, from 5 to 2 percent, as well as a 5 percent salary reduction, reduction of officers’ hours by 2 percent, elimination of longevity pay, reduction of compensation for time spent in court, reduction of the number of holidays and elimination of retirement health care for new hires.
On March 22, 2013, the township and union met with a state mediator, and the union asked for a 7 percent increase in wages over four years, a 20-year retirement option instead of 25 years if officers paid for the five-year difference, and to hire new officers at a lower wage with reduced retirement, Tignanelli said.
Since the meeting in March, Tignanelli said he has received no correspondence from anyone in the township. During the time between contracts, officers must pay increases in health care premiums and will not receive any retroactive wages or benefits that otherwise would belong to them if an agreement had been reached, as mandated by Public Act. No. 54 for the sake of speeding up negotiations.
“I believe the employer is satisfied with us paying a 100 percent increase in health care, no retroactivity and no step increase, which we would have had with a valid contract,” Tignanelli said, adding that he felt the township did not hurry to come to an agreement and used Public Act No. 54 to its advantage.
While Stathakis believes going to a 401(k)-type plan will save the township money because it would not have to pay lifelong pensions, Tignanelli said the pension plan would save more money in the long run because the money put in by new hires benefits older officers, and by eliminating a pension plan, the township would have to pick up the slack.
The liabilities are so high, Tignanelli added, because the previous board allowed the interest collected on pensions to pay for the pension debt, but now that wages have decreased, the unfunded liabilities have skyrocketed.
“We prefer negotiation; we want the agreement to come from the township, within the community, not somebody from outside the community. They don’t understand the people within Shelby,” Stathakis said. “(Arbitration will cost) a lot of money — it’s very expensive for both sides.”
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