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Evans says deal with skilled trades union cuts costs

Charles E. Ramirez
The Detroit News

Wayne County has reached a labor agreement with the union representing operating engineers that reduces wage, pension and health care costs, Wayne County Executive Warren Evans said Thursday.

Members of the International Union of Operating Engineers Local 324 ratified the four-year contract Monday, he said. The contract, which includes a 5 percent pay cut for the next two years, still requires approval of the Wayne County Commission.

The agreement is the first officials have hammered out with the county’s unions, according to Evans. There are nine other county unions with expired labor contracts.

He called the deal “a major step in the right direction,” but reiterated plenty of work still needs to be done.

It was announced the same day Gov. Rick Snyder confirmed an earlier determination that a financial emergency exists in Wayne County. That’s another step toward a possible consent agreement, which could give Evans additional leverage to win concessions from other county unions.

“The spirit of compromise and shared sacrifice shown by the IUOE membership speaks volumes to what can be accomplished when we all work toward a common goal, which in this case is creating long-term financial stability for Wayne County,” Evans said in a statement. “This agreement is an important milestone in our road to recovery, but we still have many more miles to travel before we eliminate the county’s $52 million structural deficit.”

Officials could not immediately say how much the deal would save the county.

Union officials said the agreement is proof collective bargaining works.

“It also shows that IUOE Local 324 members are committed to being a part of the solution to the problems Wayne County faces,” Tom Scott, recording corresponding secretary and business representative for the local, said in a statement.

Scott said the local represents about 12 county workers who operate and maintain county boilers and commercial refrigeration units.

Under the agreement, the union made several concessions, including:

■The county will no longer provide retiree health care.

■Overtime, sick, vacation and work leave will no longer be used to calculate average final compensation, used to determine pension amounts.

■The multiplier used in calculating the average final compensation has been lowered to 1.25 percent from the current 2 or 2.5 percent.

■Employees must be 62 to retire and receive any benefits accrued after Oct. 1, 2015.

■The county has increased its annual employee contributions to the pension system.

Evans said all of the changes are consistent with the recovery plan he introduced in April to save the county $230 million over the next four years.

Wayne County’s recurring $52 million shortfall stems from a $100 million yearly drop in property tax revenue since 2008 and an underfunded pension system.

The county takes about $20 million from its general fund each year to bolster its pension system, which is underfunded by $910.5 million, according to the most recent actuarial report done for the county. Wayne County has more than 5,000 retirees.

cramirez@detroitnews.com

(313) 222-2058