Commissioners rain on RTC-union dance; they had to

It was a bizarro episode of a government meeting Thursday, when the hot topic was the proposed contract between the Regional Transportation Commission and the Service Employees International Union.

The terms "arbitration," "impasse" and "stalemate" never surfaced, at least not in a negative context. Union representatives praised government administrators; the two sides joined hands and broke into a happy dance.

But then commissioners put an end to the celebration, requesting more time to consider the agreement that over five years could potentially allow significant raises for its employees if sales tax revenues - the agency's primary source of funding - increase.

So, what's the problem?

Consider this: Eight voting members serve on the regional commission, but they are elected to represent their respective cities and the county. It places them in a difficult decision to sit on their home board and vote in favor of wage freezes and massive layoffs then wander over to the RTC dais and approve raises and continued benefits.

The Regional Transportation Commission is structured differently than other government agencies in that 6 percent of its budget is spent on salaries and benefits. In contrast, two-thirds of Clark County's budget is spent of employees' salaries and benefits. The union represents fewer than 200 RTC workers and thousands of county employees.

And while a few employees grumbled about the loss of accrued sick leave, the majority of union members approved the RTC deal.

Union leaders and agency administrators each called the agreement "unprecedented," in large part because both sides came to the bargaining table willing to make compromises.

But there were other unprecedented components included in the proposed contract. First off, the life span of the contract is five years, when typically the deals range from two to four years. Most significant is that merit pay would only be awarded to proficient employees and the bonuses are tied directly to increases in sales tax revenue.

Even though longevity pay for new hires was reduced to three-tenths of 1 percent of their salary, about half of what it was, the union was fortunate to keep that benefit. Most government agencies have eliminated longevity pay. In addition to merit pay and longevity, after one year employees would receive cost-of-living increases based on a three-year average of the Western Consumer Price Index.

Jerry Keating, deputy general manager of the RTC, said that if the sales tax revenues increase significantly, resulting in healthy merit pay for every union employee, the agency still would have plenty of resources to improve bus services and buy new vehicles. If, for example, sales tax revenues increased 3.5 percent to $154 million, the RTC would pay out about $500,000 in merit pay.

Both sides seemed content except for elected officials, who are now in an awkward position.

Former Clark County manager Thom Reilly, author of the book "Rethinking Public Sector Compensation," said he understands concerns voiced by commission Chairman Larry Brown, who said compared to other negotiated contracts in Southern Nevada, this proposal is unfair and inequitable.

"I share Larry Brown's hesitation," Reilly said. "Public agencies use each other as comparisons all the time, regardless of their size."

Reilly experienced that in the early 2000s, when the city of Henderson negotiated a hefty contract that only gave county employees leverage at the bargaining table. It is difficult to explain to workers that Nevada has consistently ranked within the top five of the nation's highest paid public employees.

Reilly is impressed with some of the innovative features included in the contract, but said others posed a risk to the agency.

He said locking itself into a five-year contract during unpredictable economic times could backfire on the commission. The agency, he said, has no assurance that revenues will continue to flow, even though they have improved the last two years.

He also questioned longevity pay, calling it an antiquated concept that was first introduced to provide equality between the public and private sectors. Salaries and benefits have since balanced out and most governments have done away with longevity benefits.

"You get longevity just for staying there. That money should be funneled into performance, so you don't just have people being paid for sitting at a desk," he said. "It's encouraging they reduced it, but they should have pushed to eliminate it because it makes no sense."

He applauded the decision to directly link merit pay to increased sales tax revenue and only award those who are proficient.

"Merit and COLAs have been automatics," Reilly said. "Tying work into performance is the way the public should be moving. The public sector is more about time served and less focused on performance. You should get zero if you're not performing."

The more fiscally responsible approach to the merit pay would be to award the bonus on an annual basis rather than folding it into the employee's base salary. Under the proposal, if an employee receives a 3 percent merit boost one year and a 4 percent the next, it would add 7 percent to the base salary. Reilly suggested that the 3 percent be replaced by the 4 percent.

He also favored the elimination of accrued sick time for new hires. Under past contracts, employees who started in a lower paid position and worked their way up to management over three decades, accruing thousands of hours of sick leave in the meantime, would cash out at their management pay.

A new approach to sick leave is to grant employees a certain amount of hours per month, then bank the rest. This way, he said, employees are not paid for unused sick time, but have additional time available to them should they suffer a serious illness.

Reilly said cost-of-living increases were arbitrary when he was county manager. He supports the link to the Western CPI, but said the contract should be written in such a way that the board could revisit the cost-of-living boost each year.

Maybe the meeting wasn't bizarro after all. The RTC administrators and union officials were certainly thrilled to come to an agreement, but the elected officials weren't at all interested in jumping into the happy dance. Once again, they are faced with a controversial political decision.

"It's all public dollars, so employees will ask 'Why is it good for them when it's not good for us?' " Reilly said. "That's big on their (commissioners') mind."

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