Oct 14, 2005 2 min read

An important issue confronting the Fayette County Housing Authority board of directors, which this morning will likely vote on approving a new three-year contract with its unionized maintenance department, is whether to continue letting the union keep it over the proverbial barrel. It’s clear that the five-member board wants to alter a lucrative pension funding system whereby the authority -meaning taxpayers – matches each employee’s annual salary with a separate 15-percent pension fund contribution. That type of perquisite is virtually unheard of in the larger work world, where many employees have the option of earmarking up to 15 percent of their salaries to a 401(k) account, but where it’s a pipe dream to think of their bosses contributing that amount for them as extra compensation.

Prodded by Chairwoman Angela M. Zimmerlink, the FCHA looked into changing this system a few years ago for its administrative employees, who have civil service status. But the board was told that since it couldn’t simultaneously change the system for unionized maintenance workers, who had the perk as a contractual benefit, the move was improper under IRS rules because it would essentially create two different pension systems.

Now the board properly wants to make the change by starting with the new union contract for 24 maintenance workers, wanting them to contribute a reasonable 3 to 5 percent of their salaries to the pension program. But the union has balked, offering instead to contribute nothing in year one, 3/4 of 1 percent in year two, and another 3/4 of 1 percent in year three.

Playing a big bargaining chip, the union has basically threatened the authority with booting its administrative employees out of a union-sponsored health care plan, which has saved the authority an estimated $375,000 per year for the past four years. The board should keep the issues separate and not succumb to this sort of blackmail tactic, which is exactly what’s going on.