News From OSA - September, 2014

CONTRACT DEMANDS. We received many contract demands for collective bargaining from our members. The most common demand was for more money, as expected. The second most common demand was for free prescription drugs. Accordingly, this demand has been submitted to the City.

Not only prescription drugs, but also many other demands were attractive and desirable. It is also true that, when you receive hundreds of demands, some will be impossible (we cannot get summers off, even though teachers do), and some will be possible, but not within the scope of our power (we cannot stop the government from appointing poor choices for the leadership of our agencies, although we all wish we could).

Other demands can be feasible, but not necessarily wise. We always receive a few demands asking for more merit increases. In our experience as civil servants, it is sadly true that merit increases are not always awarded based on merit. Sometimes they are, but they can be, and often have been, based on politics.

Finally, we have a category of demands which gives our union a valuable bit of information – that we need to inform our members on facts and details of which some members are unaware. For example, why is our longevity differential different from one title to the next? Why don't we have a drug plan? Why don't we have an annuity fund? How come the Management Benefits Fund has a gym benefit and our welfare fund does not?

In these cases – and still more – there are answers, and this mailing will seek to address these topics.

As analysts we like to know everything, but we can't. It is to be expected that as new members arrive in OSA, they will not know our history or the details of prior collective bargaining. This mailing has been written in response to the demands submitted and, even if you submitted no demands, you may find it of interest on one topic or another.

DRUGS. The demand for a drug plan, or a drug card, or free prescription drug coverage is in a unique category.

First, most NYC employee unions provide such coverage through their union's welfare funds. Thus, it is often questioned why OSA does not provide such coverage. The short answer is history, not money, but history.

When, after many years of trying, our organization got the right to cover 600 of our members for collective bargaining purposes (in 1989) we had to choose which benefits to buy for our welfare fund. We chose to model our fund on the Management Benefits Fund's (MBF) plan. We were all previously covered by that plan, and we were used to those benefits.

The MBF did not provide drug coverage but, in 1989, drug coverage was very inexpensive. The cost of drugs began to rise in 1990, and has increased ever since. Those unions who provided drug coverage began to run out of money. As a result, they sought and obtained an extra $100 per member, added to the welfare funds in one contract after another.

Both MBF and OSA got this extra $100 each time. Since $100 per member was not enough to provide a drug plan, each increase was used to provide improved benefits such as better eyeglasses, dental and life insurance. This explains why we did not have a drug plan in the past.

Second, members ask why we are not moving towards providing a drug plan. In this case, the answer is money. The cost of a drug plan, depending on its provisions, would be between $800 and $1200 per member covered, per year. For the sake of argument, we can say the cost would be about $1,000. The cost of all drug plans is going up due to increasing drug costs and the Affordable Care Act. (The ACA requires the coverage of all drugs with no limits.) So, then, if the cost of a proposed drug plan is $1,000 per member this year, it might be $1,050 next year, and probably at least $1,100 by 2017.

Our normal surplus is $200-$400 per year per member. If we did provide a drug plan, we would have to use up reserves, or cut benefits, or get more money from the City. Using up reserves only lasts until they are gone, cutting existing benefits would be very distressing to those members who are dependent on them, and the City is offering a contract through 2017 with a very small increase in welfare fund contributions.

Instead, the City has offered to study consolidation of drug coverage so that all City employees would be covered by a single drug program. That program would, ideally, be free of any premium. Ideally. We can hope so.

If, for whatever reason, there was a premium, and if it was charged to all employees, not as an option, that cost would probably be much lower than OSA members now pay for GHI or HIP drug riders. No such deal has been worked out yet, but the City has expressed interest, and that is a good sign.

ANNUITY. Members who have spent time in other unions will often wonder why OSA does not provide an annuity. It is true that our union could be providing an annuity for our members, but it was turned down.

A number of contracts back, one aspect of the pattern bargaining was the option for the union to create an annuity account. The City would pay into the account $2 for each day worked (or in pay status on leave) for one year. The maximum for any one employee would be $522 for the year. It would be untaxed at the start and would be invested by the union for later pay out at retirement age. (It would then be taxed.)

Some unions took the offer and improved upon it. In return for a lower percentage increase at the time, the $2 per day was continued on into the following contracts and, by now, can amount to a sizable sum.

OSA discussed this matter at many on-location meetings over the months before close of negotiations. We chose to have the City pay the $522 per member directly to the members. We also chose not to diminish the next contract raise to pay for continuing the $2 per day.

The logic at the time found few (if any) members disagreeing. The leadership of OSA felt members would be better off making their own decision on how to invest the money than to have the union do it for them.

The facts aside, we did not then foresee that newly arrived members would later perceive this as a loss where there was none. Members assume base pay is a given, although it comes from union contracts. Had OSA chosen to lower the raise in a prior contract, we would now have an annuity and members would not notice the slightly lower base pay.

The City would probably be willing to allow OSA to create an annuity for our members. It would have to be funded by a diminution of the contract raises, but it would have three benefits.

First, other City unions have been running annuity funds for years, and these are popular with the members. Second, there is the tax avoidance advantage in that untaxed monies are free to increase through investment until the member retires. The third advantage is that OSA members will perceive more clearly the value of the union because of the separate monies held by the union for the members' retirement.

OSA did receive many demands for our union to create a union-sponsored annuity plan. Some, at least, of those making the request may not be willing to fund the annuity out of the raises due to our members. However, if there is continuing interest in an annuity program, OSA is open to considering setting one up.

LONGEVITY. Many demands came in requesting that monies from this contract be apportioned to longevity.

Some wanted an increase in the 10, 15 or 20 year longevities or creation of a 25 year longevity. The largest number of demands on this topic came from Administrative Staff Analysts levels MII and MIII. Some of these noted that they had “lost” longevity in earlier years and felt it should now be restored. Others noted that some titles received more longevity than others, and sought equalization.

The source of all longevity payments is the OSA contracts over the years. Our union, from the start, used the Additional Compensation Fund (or the "equity") portion of each contract's raises to create longevity payments.

During most of the contracts agreed to by Ed Koch, OSA was not a union, and both Analysts and managers failed to be given the “equity” portion of the union raises. As soon as we did get the right to bargain with him, our first contract set up our first longevity increment, $700 per year after the completion of 15 years in City service.

Since only Staff and Associate Staff Analysts were in the union, they were the only ones covered.

As time passed, the union grew to cover more titles, and more contracts were signed. As new titles began to be covered for collective bargaining, OSA insisted that the new titles be covered for the same longevity increments as our already existing membership. The City refused.

OSA went to arbitration, arguing that all new members should benefit from our earlier victories. The City agreed that a newly appointed Staff Analyst, with experience, would get the benefit of the full OSA longevity, but that any title series newly brought into the union could only benefit from the value of the next contract's raise (if any) of longevity. The arbitrator ruled in favor of the City.

Thus, at present, the only resources the union has to provide a title with a longevity increment comes from the “equity” portion of the contract, assuming there is one.

There is one bit of frequent misunderstanding related to this increment.

For the most part, the increment is a part of base pay. Thus, a long serving Associate Staff Analyst earning a $5,000 longevity, on promotion, does not lose the money. Instead, that increment is added to the promotional raise, so no money is lost.

This can be confusing. According to the current contract, an Associate Staff Analyst with full twenty-year seniority gets $208 bi-weekly ($5,414 annually) for longevity. After promotion to Administrative Staff Analyst, the member gets $130 bi-weekly ($3,388 annually) for longevity. The missing $78 bi-weekly ($2,026 annually) was added to the base pay along with the advancement increase of $46 bi-weekly ($1,208 annually) for a total of $124 bi-weekly ($3,234 annually.)

Most members promoted by way of an exam are aware of this. Members promoted provisionally are frequently less clear on what occurred, and may believe they lost money on promotion.

AN EGG PLUS A GYM BENEFIT PLUS NO DEDUCTIBLE ON THE SUPERIMPOSED MAJOR MEDICAL PLUS SUPER GENEROUS DENTAL REIMBURSEMENT. Rudolph Giuliani made a number of very nice improvements in the Management Benefits Fund. He offered $1,000 per person for gym reimbursement, a zero deductible for the superimposed major medical, and an enormous improvement for dental reimbursement.

He also offered, even before these, a $5,000 reimbursement to pay for obtaining a human egg suitable for fertilization.

We are grateful for his choice to start with the egg. The OSA Welfare Fund (OSAWF) had set a goal, in 1989, of trying to match the Management Benefits Fund for benefits. We did that quite well for about ten years. The MBF improved the optical benefit, and the OSAWF did the same. The MBF lowered the SMMP deductible from $750 to $500, and the OSAWF did the same.

Both the MBF and the OSAWF could keep improving benefits because neither had a prescription drug benefit. Thus, while the other welfare funds needed ever more money to pay for drugs, the MBF and OSAWF did not. Each extra $100 per member per year meant improved benefits. Life insurance was $15,000, and went to $50,000 for active members, to cite one more example.

But, an egg benefit?

Both the MBF and the OSAWF have benefits tilted towards a mostly middle-aged membership. Neither has a specific maternity benefit. How could it make sense for a fund to institute a very expensive benefit designed to help a member have a child if we offered no support once the child was born. It did not seem reasonable.

The trustees of the OSAWF, for the first time, balked. They refused to add a benefit of such huge cost when it made no sense in the context of the fund. They were wise. Within the year, the egg benefit went away. You could no longer claim $5,000 to pay for an egg.

Keep in mind that the trustees of union welfare funds hate to pull back a benefit once given. If there is one mandate above others, it is that the members should know what to expect, as much as humanly possible.

Thereafter, Mayor Giuliani went on a spending spree. Had a strange new blood pressure drug named Viagra turned out to have odd side effects? Did the company now market it for an outrageous $8 a pill? No problem. Rudy Giuliani insisted the cost be absorbed by the City drug plans, and it was.

Did someone's family dentist argue for increased reimbursement? No problem. Rates were vastly increased. Did someone suggest going to a gym was a good idea? Sure, we can tap the Management Benefits Fund for $1,000 per person per year.

The superimposed major medical deductible was lowered again, first from $500 to $250, and then down to zero. Claims would no longer be made by one member in a hundred, claims would now be made by, well, everybody. Would these changes bankrupt the Management Benefits Fund eventually? Probably, but Rudy would be gone.

Our welfare fund trustees expected our members and retirees to be around long after Rudy was gone. Thus, they had to be more conservative, and they were.

This was awkward. OSA is always seeking to organize new members into our union. At the very moment we brought the Senior Management Consultants into collective bargaining status, after a seven-year fight, MBF had better benefits. We could tell our new members that the Management Benefits Fund was being imprudent, but why should they believe us?

Since that time, the MBF has backtracked on these benefits and, once again, the OSAWF and the MBF are very similar. The SMMP deductible is again $500 for both. The dental reimbursement, as of last January, is again about the same.

The one outstanding leftover is the gym benefit. The MBF cut the benefit twice. First, the rule went from any gym to only certain sorts of gyms, and then from $1,000 a year to $500.

Members still ask us if we could offer the same, and the answer is, not if we act prudently. The Internal Revenue Service does not tax welfare fund benefits in general, but it does tax a gym benefit. When you consider that many of us are in high tax brackets, it becomes imprudent to choose to offer taxable benefits when we would be better off (on average) with benefits for which we pay no tax.

You may not be average. (Most of us are not.) You may not need dental nor optical benefits, and you may be dedicated to the gym. In that case, we are pleased for your excellent health, but we still should not take money from the untaxed benefits to pay for a taxed one.

FLEX TIME AND ALTERNATIVE WORK SCHEDULES. Ed Koch did one good thing. He encouraged flex time and alternative work schedules. Many of our members, especially those who have experienced managerial flex time, are very much in favor of the union seeking some form of relaxation of the standard Monday to Friday, 9-5 schedule. We could not agree more.

Analysts are usually not front line workers. Our jobs often do not require us to meet the public, and instead often do require many hours of work, but on an irregular basis. If you are doing a field audit, the work can be intense and lead to overtime in order to get the answers demanded by management.

The demands of budget and contract work are frequently seasonal, with long periods of slack alternating with periods of frantic activity. Procedure writing, fiscal analysis and training are also tasks that may wax and wane in the need for hours of work from an Analyst.

Still more obvious, to us, is the lack of need for close supervision while we are writing reports. If an Analyst is engaged, at 5:00PM, in completing a lengthy report, the fact that the boss departs at 5:00pm does not normally change anything. In theory, the Analyst could, upon the boss's departure, leap up from the computer and do a happy dance. In practice, the Analyst is far more likely to continue sitting before the computer completing the report.

Once upon a time (in the 1980's) many of us had a four day (8 ¾ hours a day) week. That was gorgeous. Others had a nine day bi-weekly stint. We missed the rush hour coming and going. We learned how nice and convenient New York City is between 9:00am and 5:00pm on a weekday off.

It was great.

Members can be sure that the union leadership will be pushing on the issue of flex time and alternate work schedules with the De Blasio administration. Obviously, there is a need for a regular 9 to 5 work schedule in many cases, but equally obviously, not in all cases. We will now see if the Mayor agrees.

GENERAL MEMBERSHIP MEETING. The next general membership meeting will be held a week later than usual, on the first Thursday in October, to avoid a conflict with a religious holiday. You can download a flier for the meeting to remind yourself of the date, time and location by clicking this link.