The City Council is being asked to approve a tentative agreement for the renewal of a labor contract between the Teamsters - Local 190 and the City of Billings.  This negotiated agreement will replace the one that was in effect from July 1, 2021, through June 30, 2024.  Staff recommends the City Council approve the proposed collective bargaining agreement with the Teamsters - Local 190.

As you are aware, the Teamsters' contract negotiations were challenging primarily due to the Consumer Price Index (CPI-U) inflationary numbers of 7%, 6.5% and 3.4% respectively in years 2021, 2022, and 2023.  During these high inflationary years, the Teamsters were granted 3% increases in each of those years, but the increases paled to the actual inflationary numbers.  High inflation and low unemployment led to difficulty in recruiting and retaining employees in the City.  As a result of high turnover, the city began researching market pay in an effort to better recruit and retain employees.  This research led the City to purchase PayScale/PayFactors compensation software as a tool to help ensure the city's compensation plan is equitable internally and competitive in the market for similar positions.  This software allowed human resources staff to compare every teamster's position with the market, resulting in both internal pay equity and competitive pay throughout the City's compensation system.  After several weeks, Human Resources completed the pay project. It was then reviewed over a 3-day period by a 6-member committee made up of Department Directors.  This committee reviewed both internal pay equity and external market pay by position in an effort to "get pay right."  Once the pay data was finalized, it was ready to be presented to the Teamsters during contract negotiations.

The City and Teamsters union began negotiations on May 6, 2024, and continued bargaining for 10 day-long sessions before the City presented its Last, Best, and Final offer to the Teamsters' negotiating team.  Per the Teamsters' bylaws, they are required to take a vote of their membership when a Last, Best, and Final offer is proposed by an employer.  Therefore, on Monday, June 17, 2024, the Teamsters voted not to accept the City's Last, Best, and Final offer, resulting in the City requesting a mediator from the Montana Department of Labor.  Mediation began on Tuesday, June 18, 2024, reconvened on Tuesday, June 25, 2024, and continued through Wednesday, June 26, 2024, when both parties ultimately reached a tentative agreement. 

The Teamster members voted in favor of accepting the tentative agreement on July 10 and 11, 2024.  If approved by the City Council, then the contract will go into effect retroactively from July 1, 2024, and continue through June 30, 2027.

Changes to the collective bargaining agreement include:

• Implementing a market-based pay system for the first year of the contract, effective retroactively to July 1, 2024.
• A 4.0% COLA for the second year of the contract, effective July 1, 2025.
• A 3.5% COLA for the third year of the contract, effective July 1, 2026.
• Longevity pay is eliminated for all employees hired on or after July 1, 2024.
• The City agreed to increase the boot allowance from $150.00 to $200.00 in years 1 and 2 of the contract, and from $200 to $225 in year 3 of the contract.
• Clarified Lead worker pay language to include employees will not be paid when the assigned lead worker is on vacation, sick, or otherwise off-shift. In addition, lead worker pay will only be paid if the assignment is four (4) hours in duration or more.
• IRS mileage rates will be paid to employees required to drive between worksites using their personal vehicles. 
• The City agreed to send copies of all modified Teamsters' job descriptions to the union.
• The City agreed that call-outs for emergencies, such as floods, fire, water and wastewater plant failures, earthquakes, and tornadoes will be paid upon the employee's notification to report to work provided the employee arrives within 45 minutes of receiving the call.  If it is longer than 45 minutes, then pay will commence when the employee arrives.
• Employees will be paid holiday pay for all hours worked on the holiday.
• Attendance incentives will be awarded annually, instead of every 4 months.
• Personal time will be based on the employee's standard work shift.  If the employee works 5-8-hour shifts the majority of the year, then works 4-10-hour shifts during the summer, then the personal time is 16 hours instead of 20 hours.
• Included the October 2, 2024, MET Transit Fixed Route Implementation Memorandum of Understanding in the Collective Bargaining Agreement.
• Clarified overtime language for MET Transit extraboard operators.
• Clarified overtime language regarding the most junior employee at MET Transit.  This employee shall not be forced to cover more than two overtime periods in a given week nor shall they be required to work more than allowed by federal regulations.  In these instances, the forced overtime periods will be rotated to the next most junior employee.
• Clarified seniority language at Fleet Services to include when a Vehicle Service Technician is hired as a Mechanic II, then that employee will move to the bottom of the Mechanics' seniority list.
• The city agreed to increase the uniform allowance to $300 per year for the Airport ARFF/AFM employees.
• The city agreed to allow shift bidding between the Facilities Support I employees in the Facilities division.
• The union and city agreed to discuss safe, nearby Stillwater parking options for employees working from 6:00 p.m. to 6:00 a.m.
• The union and city agreed to discuss installing cameras in Solid Waste Collections trucks.

City Council may:

• Approve the contract as presented with the implementation of a market pay system effective retroactively to July 1, 2024.
• Postpone action on the contract to obtain additional information; or 
• Deny approval of the contract, forcing both parties to resume negotiations through continued mediation or fact-finding proceedings.

The costs associated with implementing this contract are as follows:

• The cost of implementing the market pay system is approximately $2M in year 1 of the contract.
• The 4% Cost of Living Adjustment is approximately $1.7M in year 2 of the contract.
• The 3.5% Cost of Living Adjustment is approximately $1.6M in year 3 of the contract.

As you are aware, the FY25 budget included a 5% increase in wages. However, if the contract is approved, the City Council may be asked to approve a budget amendment to account for additional wages in some departments/divisions.