Wednesday, December 30, 2009

Hazleton City Authority Water Department Hearing- Pennsylvania Labor Relations Board

SOP downloaded a Fact Finder report from the Commomwealth computer system detailing a hearing held before the Pennsylvania Labor Relations Board on November 4, 2009. There are some interesting pieces of information that should be shared with the public.

Diane S. Mulligan is listed as the Fact Finder. Joseph B. Pozza III represents the Union and John Audi, Esq represented the Authority. The PLRB appointed Mulligan as Fact Finder in a letter dated October 9, 2009.

Contract issues centered on wages, contract term, health insurance, pension, short term disability, longevity pay, and hours for the office staff.

A discussion of the wage issue revealed a position of the union that should be of concern to rate payers."The Union also alleged that the Authority was lax in collecting deliquent accounts and could realize a substantial sum if it aggresively pursued these non-payers."

The report went on to discuss that Hazleton water department laborers were currently earning $18.87 per hour and meter repairman $19.29 per hour. The union tried to argue that stimulus monies received by the Authority would free up money for wage increase. Obviously that was not the intent of stimulus money. A recommendation was made to increase the hourly rates by $.49, $.54, and $.60. The result would be a 8.6% increase over the three years for laborers. Considering that the cost of living is flat the finding appears to be generous.

The contract term recommendation was for three years.

The issue of medical premiums and cost sharing by the employees is eye-opening. According to the report the current family premium at the Authority is $16,728/year. At State Health Facts the average family premium for employer-based health insurance in Pennsylvania is $12,339.00 per employee, a 35.5% difference. The fact finder felt it was unfair for the employees to bear the cost of further premium increases resulting in no wage increase at all. Therefore authority employees will pay no premium share the first year, 2% in the second year, 3% in the third year with the cost of premium share capped at 2% of base pay.

On the issue of pension the story represents what is happening throughout the Commonwealth. "The Authority is obligated to make an annual contribution to the employees' pension plan, and has fulfilled this obligation in the past. Althought it invested in AAA bonds(considered a safe investment), the Authority lost money and will have to pay an extra $84,000 per year over the next several years in order to keep the pension fund actuarially sound. This limits the ability to meet the employees' salary and benefit demands. The union was seeking an increase of $6.00 in the first year and $2.00 in each of the next years of the agreement. The fact finder recommended $.50 in each of the three years.

The overtime issue really can't support statements that the Board has been doing an outstanding job of managing the water department.

"The Authortiy agrees that it has been past practice to pay an employee who has not been called when it was his turn to work overtime. This practice results in a double payment- one for the employee who did work and one for the employee who should have worked if he was called in the proper order from the list." This matter is in arbitration at the present time. Authority rate payers evidently have been effectively paying for "ghost employees". Now that is an outstanding management practice.

It is unknown whether the recommendations were accepted by both sides.
Clearly there are some mismanagement issues that should be of importance to rate payers.

UPDATE: L&I has a link to a report that states the HCA accepted the recommendations but the United Steel Workers Union rejected them.

In addition this link will show that customers in Wilkes Barre are handled by a private firm, Pennsylvania American Water. This link will show the acquisiton by American Water Works in 1996 that was hailed as the biggest asset sale in the history of the water utility business in the United States.

The American Water Works Company has acquired waterworks, reservoirs and land from Pennsylvania Enterprises Inc. for $409 million, the two companies said yesterday. With the purchase, an American Water Works subsidiary, the Pennsylvania-American Water Company, will supply another 400,000 people in northeastern Pennsylvania, including the cities of Scranton and Wilkes-Barre. The purchase includes 10 water treatment plants, 36 reservoirs and about 8,000 acres of watershed land. American Water Works, based in Voorhees, N.J., said it was the biggest asset sale in the history of the water utility business in the United States.

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