(April 10, 2015) The done deal is a done deal.
The Ocean City Council voted unanimously this week to ratify a three-year contract with the Fraternal Order of Police under the terms that the council and union leaders had agreed to several weeks ago following a long negotiation process.
“I think we had some issues, on both sides, with managing expectations,” said FOP Lodge 10 President Shawn Jones. “It seems everyone thinks we left a little bit on the table, but that’s probably a good thing.”
In February, the FOP – the collective bargaining unit representing Ocean City Police Department officers, up through the rank of sergeant – had declared an impasse in negotiations, which would’ve kicked the city into a binding arbitration process if a deal was not reached.
“We did reach an impasse and that’s something that’s never really happened before,” said Mayor Rick Meehan. “But its amazing what open dialogue and a little bit of trust and conversation can do.
“Each time, you learn a little more about the department and I hope the members of the department learned a little more about the mayor and council and what our job is here.”
In the end, the FOP accepted an eleventh-hour offer from the city, the details of which were revealed this week.
Most critically, union members will be granted raises on the department’s pay step scales, based on rank and experience. The first advancement will kick in half way through the 2016-2017 fiscal year, on Jan. 1, 2017. Another increase will occur on Jan 1, 2018.
Further, the scales will be given a two percent cost-of-living-adjustment each year, bumping the entire pay table up for new recruits as well as officers who have reached the top pay grade.
According to the city’s memo on the deal, this will cost an additional $25,994 in the coming fiscal year, and $79,361 the year after that, relative to a situation in which police pay remained flat. In the third year of the contract, union members will earn a cumulative $463,488 more than if pay had remained at 2015 levels.
The contract also features two other changes that could save the city money, although the exact amount is difficult to quantify.
Firstly, cost sharing for officer healthcare will see a slight change, with current officers paying for 20 percent of their PPO (Preferred Provider Organizations) premiums, as opposed to the 85/15 split the city had previously offered.
Further, the new contract stipulates that all officers hired after the beginning of the new fiscal year on July 1, 2015, will be required to enroll in the city’s high deductible health plan and health savings account program, and will not have the option of traditional PPO or HMO (Health Maintenance Organization) coverage.
The high-deductible/HSA system, which has been mandatory for several years for non-union employees, has proven to save the city a considerable amount of money.
Under the system, the city pays for 85 percent of the premium on a low-cost health plan, which features a deductible of $1,300 for individuals and $2,600 for families. Further, the city contributes that amount of money each year into an employee’s HSA.
These are the minimum deductibles and maximum employer contributions set by the federal government, in order for the HSA to qualify for favorable tax status.
This gives the city a more predictable insurance cost, as it will never pay more than the set level for any one employee, no matter what their medical bills actually are. However, employees who do not incur their entire deductible will be left with money in their HSAs, which rolls over from year to year, potentially leaving the employee with a considerable nest egg for health expenses later in life.
The second major financial change to the FOP contract is with regard to workers’ compensation. Previously, union officers were entitled to receive their full salary, based on 40 hours per week, for any amount of time in which they were unable to work due to injury on the job, subject to physician’s review every six months.
This goes beyond Maryland’s labor statute, which only requires that employees receive full wages for the first week of work missed, and up to two-thirds of their average weekly wage thereafter, not to exceed a state-set disability pay cap which currently stands at $998 per week.
Under the new FOP contract, officers will only be able to get full wages for the first six months in which they are unable to work. After this, they will receive only what they are entitled to under the state statute, in order to create a financial incentive for them to return to the job.
Since the FOP was formed, the city has seen a five-and-a-half-fold increase in workers’ compensation and disability claims among police.
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.
