Metro will appeal arbitration award

The Metro Board has decided to appeal the arbitrator’s decision on union pay increases.

The award details don’t appear to be online, but the union is presenting the details to employees tonight and tomorrow morning. According to a source familiar with the award, the arbitrator gave employees a 3% retroactive raise for the existing fiscal year beginning July 2008, a 3% raise for next year, and 3% for the following year. The previous fiscal year, July 2008-June 2009, was also in dispute, but the arbitrator did not grant any salary adjustments for that completed year. He also ordered Metro to pay a 2% one-time bonus.

Expecting some increase from arbitration, Metro had originally budgeted for a 3% increase, but lowered that by about $12 million to try to balance the budget. As a result, if this award holds, they will have to find the $12 million after all in the current fiscal year and the 2% bonus. I’m not sure if this presentation accounts for that or not (Metro and the union have known about the award for some time).

The arbitrator also gave some items to Metro in the area of benefits. Employees will now pay 15% of PPO costs, an increase from the current value. Their contribution to dental HMOs will increase from 2% to 15% and PPOs from 10% to 19%. Prescription drug copays will increase as well. Pension benefits won’t change, but Metro can smooth out its calculations over a longer time frame. New employees will not get retiree health benefits, which Metro would have to account for immediately if they had continued, and early retirees or retirees who don’t take Medicare will get lower benefits.

Even this award is extremely difficult for Metro to accommodate in what’s already a chain of budget crises. Just to keep a balanced budget will require fare increases above inflation and service cuts. The arbitration salary increases mostly keep pace with inflation, though most salaries in the region have not. On the other hand, Metro’s employees face rising costs themselves.

According to Metro’s press release, the National Capital Area Interest Arbitration Standards Act requires the arbitrator to limit raises to those that the agency can afford and that don’t “adversely impact the public welfare.” The arbitrator also must issue written findings about these factors, and according to Metro, he did not. Even if unsuccessful, the appeal may also buy Metro some time to find money for these items.

I’ve emailed Metro to confirm some of the above numbers (which I got verbally) and get additional facts.