EDITORIAL: Unelected arbitrator gets final say on UMC

If it weren’t already obvious that Nevada taxpayers and their elected stewards are powerless to rein in growing public employee compensation costs — far and away the largest expense of local government — an arbitrator ended all doubt last week.

In a stunning decision with serious bottom-line ramifications for money-losing University Medical Center, arbitrator Jay C. Fogelberg settled a contract dispute between Service Employees International Union workers and county management by siding with the union and preserving longevity pay for future hires.

The county and the union had agreed to provide current UMC workers with a series of pay raises: a 2 percent raise retroactive to Jan. 1 to negate a 2 percent pay cut employees accepted in 2011; another 2 percent raise retroactive to July 1; and a 1.5 percent raise effective July 1, 2015. But the deal went to an arbitrator because the union insisted on preserving longevity pay for people who haven’t yet been hired at the public hospital. The benefit awards annual lump-sum payments to workers with at least eight years on the job. It’s calculated by multiplying an employee’s years of service by 0.57 percent of that employee’s current salary.

Longevity pay cost the hospital almost $7 million last year, no small amount considering UMC needed a $71 million county subsidy and a $45 million county loan to balance its budget. Last month the hospital eliminated 285 positions, 224 through layoffs, to erase $28 million in losses over the next year. Getting rid of longevity pay for future hires, as other public employee bargaining groups have agreed to do in recent years, would have saved UMC an estimated $122 million over the next 30 years.

Mr. Fogelberg based his decision on the fact that the hospital’s bargaining team initially agreed to preserve longevity pay for future UMC hires, a position that ran counter to the fiscal policy and budget priorities of county management and the Clark County Commission. The commission rejected the contract.

But local elected officials, who are directly accountable to taxpaying voters, don’t have the final say in such matters. Nevada’s collective bargaining laws ensure that an unaccountable, unelected arbitrator gets the last word, and that the process is skewed in favor of unions. And so Mr. Fogelberg, who lives on a golf course in Minnesota, decided UMC must pay up. Although he agreed with the county’s position that longevity pay isn’t offered by competing valley hospitals and that the benefit does nothing to retain staff, Mr. Fogelberg sided with the union because the hospital’s negotiators initially signed off on the retention of longevity pay. So now we know that the word of negotiators is binding. Why even pretend elected officials have a role in the process?

The sad irony here: Because of Mr. Fogelberg’s decision, future UMC hires are even less likely to collect longevity pay, because the hospital might not stay open long enough for them to collect.

Mr. Fogelberg doesn’t care. He doesn’t get his health care at UMC. He doesn’t pay taxes in Nevada. But his ruling paves the way for the preservation and return of longevity pay across the valley, even though government employee compensation is already squeezing public services.

There’s only one solution to this problem: Elected bodies, not lone arbitrators, must have the final say on employee contracts. The 2015 Legislature should make it so.