ESCANABA - Escanaba City employees will have their 40-hour work week reinstated for the upcoming fiscal year, agreed council at its regular meeting Thursday. As a result, one union's recent concessions were cancelled.
As a $650,000 budget-saving measure for the 2011-12 fiscal year, all city hourly employees were to have their 40-hour work week reduced to 35 hours beginning July 1.
In May, members of Teamsters Local 486 agreed to give up a pay raise and pay more for their insurance if they could continue working 40 hours a week. Council agreed to the request.
After looking more into the reduction of hours for other employees, city officials realized Public Safety's contract did not allow for a cut in hours; a court appeal decision elsewhere also counter-acted the reduction in hours, said City Manager Jim O'Toole.
Council agreed to reinstate the 40-hour work week for all employees at its meeting Thursday.
As a result, council rescinded the recent pact with Local 486 - representing public works and clerical employees, who gave concessions in exchange for working 40 hours while others would be working a 35-hour week.
The Teamster's group had agreed to forego a 2.5 percent pay increase which was to go into effect July 1, agreed to pay 5 percent towards the cost of their medical insurance premium, and agreed to work with the city in exploring a more cost-competitive health care plan.
About a dozen members of Local 486 awaited council's decision following an executive session to discuss the matter Thursday. The employees thanked council members for their action.
"We didn't feel it was right to give one employee group (Public Safety) a pass and not the others," explained O'Toole.
Administration will continue to negotiate with Local 486 as well as water and wastewater union employees. These workers' contracts expire June 30. Public Safety and electric workers' union contracts expire June 30, 2012.
Administrators and council will also address the financial shortfall created by the reinstatement of the 40-hour work week.
O'Toole had recommended the five-hour-a-week cut in the upcoming fiscal year to reduce employee expenses because of the city's proposed budget deficit of $800,000.
This deficit is mainly due to a $400,000 decrease in state revenues, a $310,000 increase in health insurance costs, and a $267,000 pension increase during the past two years.