Portland labor-management program saving tax dollars

By DON McINTOSH, Staff Reporter

To protect against privatization and discredit the myth of government workers as overpaid loafers, unions that represent City of Portland employees have been involved in an ongoing partnership with management to improve service, increase efficiency, and cut costs.

The first labor-management partnership began six years ago in the Water Bureau after privatization threats. Then, in the wake of rougher-than-normal contract negotiations in 1996, a renewed push for labor-management cooperation led to the adoption citywide of the Service Improvement Initiative - a plan to create committees composed of managers and front-line workers.

In June 1999 the Portland City Council endorsed the plan, committing each commissioner to involve at least one bureau in the initiative and calling for periodic progress reports on the resulting cost savings and/or service improvements. Today a third of the city's bureaus have labor-management partnerships under way, and Elaine Hultengren, the program's coordinator, thinks the many small improvements the labor-management committees are suggesting are adding up.

* One labor-management committee found that the Department of Transportation was spending too much money on the rented coveralls employees wore while doing maintenance work, so they purchased coveralls and now launder them in-house.

* In the Park Bureau's Operations Division, a new computerized inventory system for purchasing supplies is reported to save $75,000 a year.

* In the Water Bureau, employees worked with management to procure a new cement mixing truck. The "barrel" truck the bureau typically purchased took three employees to operate and required frequent downtime and risk to safety as employees chipped off wasted concrete. Worker input led instead to a smaller and cheaper "batch" truck that required just two employees to operate and that was able to mix only the amount needed for a particular job, resulting in $50,000 a year savings. * In the Business License Department, employee suggestions led to efficiency increases of 245 percent.

* In the Water Bureau's Tryon Creek wastewater treatment facility, the committee's suggestions on automation and cross-training increased efficiency enough that the agency was able to absorb staff losses without hiring replacements, resulting in a $300,000 cut in its $1.3 million budget.

Clearly, such results are desirable from the standpoint of city managers. But what's in it for labor?

Five of the city's unions, meeting twice monthly in a body called Citywide Union Leaders, have committed to the partnership, including the American Federation of State, County and Municipal Employees (AFSCME) Local 189, with 950 workers; Laborers Municipal Employees Local 483 with 600; the City of Portland Professional Employees Association, with 325 members; Electrical Workers Local 48, with 85 members; Machinist District Lodge 24, with 50 members; and Portland Fire Fighters Local 43.

Jim McEchron, business manager of Local 483, sees the effort as a way workers can have at least some say in the decision-making. As AFSCME Local 189 President Arlen Stepper puts it, "Management is too important to leave to management."

Improved relationships have also decreased slightly the number of grievances and arbitrations as problems are resolved earlier.

But labor's key motive for participating, said McEchron, is to keep existing jobs as city jobs, i.e., to ward off attempts to contract out.

Protection Against Privatization

"If you're running a lean, mean operation, the threat of privatization goes way down," said Stepper.

Stepper said the private sector looks for inefficient government operations as opportunities for profit - if they can convince officials that private entities can do the job more cheaply, work otherwise done by government employees may be contracted out.

The private sector has made inroads into work formerly done by the city. Local cement contractors, angry that the city was repairing sidewalks for private residences, pressed successfully for that work to be opened up to the private sector, using non-union cement finishers.

When the capital investment is large and the use small, said Stepper, it sometimes makes more sense for the city to contract out. To cut the brush around reservoirs, for example, the Water Bureau could purchase a $50,000 tractor that will only be used once a year, or it could contract with a private entity to do the work.

On the other hand, sometimes government agencies find it's cheaper to bring work "in-house" than continue to contract out. Moves to bring work in-house are being helped by a new costing methodology that the city adopted.

Devised by the Public Employees Department of the national AFL-CIO, this new methodology doesn't handicap public agency bids with the expense of city hall and city administrators.

Accordingly, the Bureau of Emergency Communications brought some previously contracted-out services in-house, the Bureau of Environmental Services brought some construction inspections back in-house, and the Parks Bureau brought some irrigation installations in-house.

This option to "contract in" was challenged when Associated General Contractors took the city to court for its decision to lay a water line; the city won.

The success of the city's labor-management partnership hinges on the workings of its front-line committees. Admittedly, there's a power differential between workers and managers on these committees. But existing city policy prohibits management retaliation against workers for speaking their minds. And to ensure that workers won't be laid off due to efficiency improvements they suggest, the city is adopting a set of "cornerstone" agreements offering basic job protections to employees.

McEchron, at least, isn't worried that the employees he represents will "improve themselves out of a job," simply because there's so much work to do. McEchron said his union has lost 25 positions at the Bureau of Environmental Services over the last 10 years, as employees quit or retire and are not replaced. Stepper said the Water Bureau has likewise shed over 100 employees in the last 15 years, even as the area it serves increased by one-third. It means little danger of layoffs resulting from workers finding ways to become more efficient.

Unfortunately for the unions involved, there's little hope that the city will hire more people either, because of limitations on tax revenues. Increased efficiency just means the agencies are doing more work with less staff.

The labor-management partnership is seen as the most effective way to get increased efficiency. "This stuff is a tough sell to my members," McEchron said, adding that he himself is cynical about it.

"It's been a real mixed bag. I haven't seen a lot of beneficial things come out of it for our workforce." McEchron is also concerned that management may change its mind if it feels threatened by the idea of shared decision-making. "I've seen people blow hot and cold on this. One minute they want something and they need labor-management cooperation. Then the tide changes, or maybe it's the phases of the moon..."

The partnership was complicated considerably by the hard line the city took in the 1999 contract negotiations. But it was not abandoned. "We're not going to hold [the labor-management partnership] hostage to bargaining," Stepper explained.

Stepper said labor-management partnership is an adaptation to a new environment in the public sector.

"It used to be that once you got a job at the city, you were there for life," Stepper said. "Now employees know their jobs are not guaranteed. Their livelihood depends on them providing good service at a reasonable cost."