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Ocean City

City, FOP edge toward arbitration

(Feb. 27, 2015) For the first time since it’s formation, Ocean City’s police union has declared an impasse in contract negotiations with the city’s administration, meaning that binding arbitration could go into effect after next week’s deadline.

Mayor Rick Meehan advised the council and audience of the situation during last week’s session.

“Although the goal of both parties was to come to an agreement, we were unable to do so,” Meehan said. “We have been notified by the FOP [Fraternal Order of Police] and their attorney that they have declared an impasse. At this point, the arbitration procedure will begin.”

Over the past two months, negotiating teams – one appointed by the City Council, the other by the union members of the Ocean City Police Department – have met to hammer out a new police contract.

The FOP’s current agreement, a two-year deal reached in 2013, will end in July once the fiscal year 2015-2016 city budget goes into effect. Collective bargaining by OCPD employees is authorized under the city’s charter, per a 2002 public referendum.

Under the provision, any issues that have not been resolved by March 1 before contract renewal may be submitted for arbitration. However, there is nothing that forces either side to go through with the process, even after that date.

“We’re still trying, in the meantime, to reach some common ground,” said FOP Lodge 10 President Shawn Jones.

However, both sides confirmed that they have taken the first step in the arbitration process, which is to select a single representative to serve on a three-person arbitration panel. These two representatives then select a third, who can be from a third, neutral agency if desired. If no agreement can be reached, the U.S. Department of Labor may appoint a federal mediator as the third member.

“They try to agree on a third person, and if they can’t, there’s a procedure with the Department of Labor where they pick someone for you off a list they maintain,” said City Solicitor Guy Ayres.

Ayres confirmed Wednesday that the council selected an individual to serve, but declined to name that person until arbitration begins, if and when it does.

Likewise, the FOP has a person ready to serve.

“We have picked our person, tentatively, but he hasn’t given us confirmation so I don’t want to throw a name out there just yet,” Jones said.

Arbitration is binding, meaning that the contract decided by the three-person panel must be adhered to by both parties without alteration. However, the city and FOP can continue to negotiate, until arbitration is complete, to try to reach an independent agreement.

The exact sticking point between the two sides is unknown. Neither is obligated to give away their negotiating stance until the contract is complete.

“I’ve got some optimism that we’ll be able to strike a deal between now and [when arbitration actually occurs], so I don’t want to derail anything. We’ll know soon,” Jones said.

Since the first FOP contract went into effect in 2004, much of agreement reached between the city and the union has hinged on a list of comparative police salaries. For the past decade, the city has maintained a record of pay and benefits for 10 police agencies, including the Maryland State Police, the Baltimore City Police Department, and others, that are believed to be drawing from the same pool of potential officers as the OCPD.

Ocean City Today has filed a formal request for the latest iteration of that pay and benefits comparison, but it was not made available as of press time.

Negotiations in 2013 largely focused on the OCPD’s pension system, and the desire by the FOP to return to a defined-benefit system as opposed to the defined-contribution method that was being phased in.

In early 2011, the then-majority of council moved to close the city’s public safety pension trust fund to new hires, and implemented a 401(a), individual contribution retirement plan. As part of the 2013 contract, the 22 officers hired in the interim were returned to the pension pool.

Police and fire employees, who have a separate fund from the general employee body, contribute eight percent of their pay, and the city matches this amount with its own contribution. Upon retirement, public safety employees continue to receive 60 percent of their salary if they meet the vesting threshold of 25 years of service. The pensions for those with less service are pro-rated down by the fraction of time they are short.

Riding alongside the salary issue, workers’ compensation claims have been rising in the police department. According to reports, obtained by this newspaper last month, city officials have been apprised of a five-and-a-half-fold increase in workers’ comp and disability among police since the FOP was formed.

In 2001, the citywide budget allocation for ongoing and future claim costs was $250,000, of which $86,109, or 34 percent of the budget, was the result of police claims experience.

In the current 2015 fiscal year, the city is allocating $815,000 for anticipated claims, of which $492,591, or 60 percent, is for the OCPD. This rise far outstrips the national increase in medical costs, which averages five to six percent per year.

The department’s total budget for the current fiscal year is $20.6 million, of which more than $17 million is in employee pay and benefits.

In 2001, the department’s budget totaled less than half of that, at $9,295,384.


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