Form revised December 9, 2004

FISCAL NOTE FOR NON-CAPITAL PROJECTS

Department:	Contact Person/Phone:	DOF Analyst/Phone:
Personnel	David Bracilano/4-7874 Sarah Butler/4-7929	Ellen Schroer/3-9841

Legislation Title:

AN ORDINANCE conditionally authorizing the Mayor to sign and/or execute individual collective bargaining agreements by and between the City of Seattle and the individual Unions which are part of the Coalition of City Unions to be effective through December 31, 2007; and providing payment therefor.

Summary of the Legislation:

The attached Council Bill authorizes the Mayor to execute a Tentative Agreement between the City of Seattle and the Coalition of City Unions (the Coalition) defining wages, benefits, and other conditions of employment. The Tentative Agreement provides a wage increase of 2.5 percent for 2005 and 100 percent of the annual average growth rate of the bi-monthly Seattle-Tacoma-Bremerton Area Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) for August through June for 2006 and 2007. The Tentative Agreement also provides for up to 7 percent of annual healthcare cost increases to be paid by the City, with premium sharing of additional increases at 85 percent for the City and 15 percent for employees once the Rate Stabilization Fund has been exhausted. The City shall contribute one million dollars, annualized, for benefit enhancements, effective 2005. Under the Tentative Agreement, Coalition employees may elect to cash out half of sick leave balances annually and/or all of sick leave balances at retirement and transfer funds to a Voluntary Employee Benefits Association (VEBA) trust at a rate of 35 percent. (VEBA trusts may only be used to pay legally authorized healthcare costs for eligible future retirees and their dependents.)

Background: (Include brief description of the purpose and context of legislation and include record of previous legislation and funding history, if applicable):

The Collective Bargaining Agreement between the Coalition of City Unions and the City of Seattle expired on December 31, 2004. The City and the Coalition of City Unions began negotiations in the summer of 2004 and continued through the winter of 2005. In April of 2005, the City and the Coalition entered into mediation as it became apparent that the parties could not come to an agreement, with the primary barrier being the sharing of risks and associated costs tied to future healthcare increases. After several weeks of working with a mediator, the City and the Coalition came to a tentative contract agreement.

Please check one of the following:

____ This legislation does not have any financial implications. (Stop here and delete the remainder of this document prior to saving and printing.)

__X__ This legislation has financial implications. (Please complete all relevant sections that follow.)

Appropriations: This table should reflect appropriations that are a direct result of this legislation. In the event that the project/ programs associated with this ordinance have appropriations that were, or will be, received because of previous or future legislation or budget actions, please provide details in the Notes section below.

Fund Name and Number	Department	Budget Control Level*	2005 Appropriation	2006 Anticipated Appropriation
TOTAL

See budget book to obtain the appropriate Budget Control Level for your department.

Notes:

Anticipated Revenue/Reimbursement: Resulting From This Legislation: This table should reflect revenues/reimbursements that are a direct result of this legislation. In the event that the issues/projects associated with this ordinance/resolution have revenues or reimbursements that were, or will be, received because of previous or future legislation or budget actions, please provide details in the Notes section below the table.

Fund Name and Number	Department	Revenue Source	2005 Revenue	2006 Revenue
TOTAL

Notes:

Total Regular Positions Created Or Abrogated Through This Legislation, Including FTE Impact: This table should only reflect the actual number of positions created by this legislation In the event that positions have been, or will be, created as a result of previous or future legislation or budget actions, please provide details in the Notes section below the table.

Position Title and Department*		Fund Name	Fund Number	Part-Time/ Full Time	2005 Positions	2005 FTE	2006 Positions**	2006 FTE**
	TOTAL

* List each position separately

** 2006 positions and FTE are total 2006 position changes resulting from this legislation, not incremental changes. Therefore, under 2006, please be sure to include any continuing positions from 2005

Notes:

· Do positions sunset in the future? (If yes, identify sunset date):

Spending/Cash Flow: This table should be completed only in those cases where part or all of the funds authorized by this legislation will be spent in a different year than when they were appropriated (e.g., as in the case of certain grants and capital projects). Details surrounding spending that will occur in future years should be provided in the Notes section below the table.

Fund Name and Number	Department	Budget Control Level*	2005 Expenditures	2006 Anticipated Expenditures
			See Below	See Below
TOTAL

* See budget book to obtain the appropriate Budget Control Level for your department.

Notes:

Labor Relations developed the estimates below to approximate the 2005-07 costs of ratifying the new agreement. In the 3^rd quarter of 2005, the Executive will submit supplemental budget legislation that will make the appropriation changes necessary to implement the agreement. The legislation will provide spending authority to adjust Departments’ 2005 salary and benefits budgets for 2005. The fiscal note accompanying the legislation will provide a more detailed and precise costing as it will be based upon Departments’ actual expenditures.

Cost items associated with the Tentative Agreement include wages and employment benefits for the Coalition as well as non-represented employees, who have historically received equal increases in compensation. Coalition members and non-represented employee wages will increase by 2.5 percent in 2005, and are projected to increase by 2.3 percent in 2006, and 2.4 percent in 2007. The aggregate salary for Coalition members and non-represented employees will grow from $454.7 million in 2004, to approximately $488.3 million in 2007. The City will incur costs for salary related benefits such as pension, social security, and medicare.

What is the financial cost of not implementing the legislation? (Estimate the costs to the City of not implementing the legislation, including estimated costs to maintain or expand an existing facility or the cost avoidance due to replacement of an existing facility, potential conflicts with regulatory requirements, or other potential costs if the legislation is not implemented.)

Without ratification of the Tentative Agreement, Coalition members and non-represented employees will continue to receive wages and benefits that became effective December 31, 2003.

What are the possible alternatives to the legislation that could achieve the same or similar objectives? (Include any potential alternatives to the proposed legislation, such as reducing fee-supported activities, identifying outside funding sources for fee-supported activities, etc.)

None

Is the legislation subject to public hearing requirements: (If yes, what public hearings have been held to date, and/or what plans are in place to hold a public hearing(s) in the future.)

No

Other Issues (including long-term implications of the legislation):

None

Please list attachments to the fiscal note below: