Past Memos

Contract Update (Number 03-04)

April 28, 2003

TO: Executive Board
Council Leaders
Field Offices

FROM: Bob Carrothers, Director of Contract Administration

RE: Professional Leave

We have received a number of inquiries asking whether Professional Leave “sunsets” with the nominal expiration of the PEF contract on April 1, 2003.

Article 12.15 states that employees will receive three days of Professional Leave per year . There is no express sunset, and the Taylor Law requires that this benefit continue in effect until a successor agreement is negotiated. We have confirmed this understanding with GOER, and where specific issues have emerged, they have intervened to assure that their managers understand that Professional Leave continues.

Requests to use Professional Leave remain subject to the contractual conditions, but in no instance should a request to use Professional Leave be denied because the 1999-2003 Agreement has expired. If you learn that an agency has taken such a position, please contact my office immediately and we will intercede with GOER to remedy the problem.

If you have any questions, please call Contract Administration at 1-800-342-4306, ext. 223.
 

memo:

TO: Regional Coordinators, Executive Board Members, Council Leaders, Field Representatives of Facilities Threatened by Closure or Privatization

DATE: April 29, 2003

SUBJ: Preliminary Injunction Against OMH

I am very pleased to report that late yesterday afternoon Supreme Court Judge Joseph Teresi issued a preliminary injunction blocking OMH from closing Middletown, Hutchings and Elmira Psychiatric Centers and the merger of Nathan Kline with the New York Psychiatric Institute. The Judge indicated that PEF, CSEA and NYSCOPBA had met the burden of proof that their case would succeed.

We argued that the closure and consolidation proposals violated State law regarding the one year notification when the State plans “significant service reductions” in the State’s psychiatric system. The Court held that OMH had failed to comply with the one year requirement. The ruling puts on hold the plan to close or consolidate the above institutions or laboratories. The decision is attached.

My appreciation to PEF leaders Robert Hogle, David Porter, Cindy Bartley-Horn, Henry Sershen, Cheryl Lattimer and Raquel Ramos for agreeing to be plaintiffs. I also extend my thanks to the PEF Legal Department, especially Jeff Plant and Liz Schuster who are handling this case.

In a related matter, it was reported in the Albany Times Union this morning that the Senate and Assembly have agreed on a two-way budget agreement to restore funding for Elmira, Middletown and Hutchings Psychiatric Centers and to prevent the consolidation of Nathan Kline and the New York Psychiatric Institutes. Based on this press report, I am now reasonably comfortable that we have succeeded in this part of our State budget struggle. The power of our mobilization, politics and bold legal action were the core of these OMH successes.

Roger E. Benson

Attachment
cc: Executive Board
Council Leaders
Budget Work Group
Roger Scales
William Seamon
Denyce Duncan Lacy
 

memo

TO:                 Executive Board
                        Council Leaders
                        PEF Field Offices

FROM:           Robert Carrothers, Director of Contract Administration

DATE:            April 22, 2003

RE:                 Part “A” Retirement Incentive Program and PEF Longevity Awards

PEF has just learned that the State has chosen not to pay longevity awards to more than 100 people who participated in the 2002 Retirement Incentive Program (Part “A”).

Under the legislation implementing this program, people who would otherwise be eligible for a longevity award payment on March 31, 2003 are “held harmless” for the payment if they retire under the Part A program within 30 days of April 1. 

The Office of the State Comptroller has taken the position that this language does not permit the payment of the award to those participants who in 2003 would first be eligible for the five or ten year longevity award.  This disqualification will be surprising to the participants since agencies had to believe the employees were eligible in order to put them on the list to be paid; we have also heard reports that the advisors from the retirement system factored in the 2003 longevity awards into calculation of final average salary for people who were subsequently denied the award.

We believe the denial is inconsistent with the letter and the spirit of the retirement incentive program and we have asked GOER to investigate the matter.  Should they fail to correct it, we will take whatever action is appropriate to insure payment of the awards.

Any questions should be directed to Contract Administration at 800-342-4306, ext. 223.

memo

TO: Executive Board Members
Council Leaders

FROM: Elizabeth Hough, Associate Counsel

DATE: April 9, 2003

RE: Recovery of Overpayment to Employees Not Previously Subject to Salary Withholding

The Office of the State Comptroller has begun action to withhold five days of pay from State employees who should have been subject to salary deferral pursuant to State Finance Law § 200.2-a when they were initially hired but were administratively overlooked. This action is more fully discussed in Payroll Bulletin 368 which can be found on the Comptroller’s website at www.osc.state.ny.us/paysr/index.htm.

In short, State Finance Law § 200.2-a, and Article 7.16(b) of the PS&T Unit Agreement, require that new employees shall have five days of salary deferred at the rate of one day per pay period for the first five pay periods of their employment with the State. It is withheld at employees’ rate of pay at the time of their hire. This money is returned to employees upon separation from State service and is paid out at the employees’ rate of pay at that time.

Recently the Comptroller determined that, due to administrative error, approximately 2,500 State employees (including roughly 800 PS&T Unit members) were never placed on the salary deferral program. To remedy this, the Comptroller’s Office has directed all agencies to notify affected employees no later than March 27, 2003 that they will be subject to salary deferral. Beginning no later than April 23, 2003 for the Administrative Payroll and May 1, 2003 for the Institutional Payroll, agencies will withhold five days of pay, calculated at the employee’s original hiring salary, at the rate of one day per pay period for the following five pay periods.

We have reviewed the Comptroller’s decision to correct this error and conclude that the Comptroller’s Office is acting within its authority. First, State Finance Law § 200.2-a, and Article 7.16(b) of the PS&T Unit Agreement (which incorporates by reference the Chapter Law provisions that are now codified in State Finance Law § 200.2-a), clearly gave the State the authority to do this withholding when an employee is hired into State service. Further, Payroll Bulletin 368 will implement the salary deferral for each affected employee in precisely the same manner as it would have been had the employee been subject to salary deferral when originally hired.

The question remains, does the State have the authority to implement the salary deferral now, having failed to do so when the affected employees were originally hired. We conclude the answer is yes. There is a strong public policy favoring recovery of erroneously paid public funds. “An administrative agency possesses a common-law right of recoupment to recover erroneous payment of public funds consistent with the strong public policy of this State to recover public funds improperly received. (citation omitted)” Schwartfigure v. Hartnett, 83 N.Y.2d 296, 300, 610 N.Y.S.2d 125, 126 (1994). Further, with regard to State employees specifically, statutory provisions expressly authorize recouping monies wrongfully or erroneously paid to its employees in certain circumstances.

State Finance Law §200(3) provides, in relevant part, that the State may recover salary overpayments to State employees where such over-payments are due to administrative error “under circumstances where the comptroller reasonably determines that the employee knew, or a reasonable employee should have known, that the salary paid to him or her was in excess of that which he or she was entitled to receive.” State Finance Law §200(3)(b)(iii)(emphasis added).

This section provides for recovery of overpayments by the Comptroller when it could reasonably be found that the employee knew, or a reasonable employee should have known that excess salary was being received. Since State Finance Law §200(3) expressly vests this decision making authority in the Comptroller, subject only to a requirement that the determination be reasonable, any decision-maker will grant deference to the Comptroller’s decisions in this area.

Here, in our opinion, the Comptroller could reasonably determine that a new employee should have known that he or she was being overpaid. Employees have notice of what they were paid by reviewing their pay stub. For these employees, a review of their pay stub would have established the absence of any withholding for salary deferral. Article 7.16(b) of the 1999-2003 PS&T Unit Agreement (and predecessor provisions in each agreement since the 1991-1995 Agreement) expressly provided that employees new to the payroll shall have five days of salary deferred. It is reasonable for the Comptroller to conclude that an employee reviewing his or her pay stub, in conjunction with Article 7.16 (b), “should have known” that they were being overpaid. Regardless of whether an individual employee had actual knowledge of the over- payment, as the old adage goes, “ignorance of the law is no excuse.” Thus, in our opinion, the State could show a reasonable basis for seeking recoupment.

Further, since this provision was expressly negotiated by the Union, there is also a reasonable argument that the Union has waived any global objection that it has to salary deferral on behalf of the unit members it represents. Further, nothing contained in the 1999-2003 Agreement has expressly waived or limited the Comptroller’s statutory or common law authority to seek recoupment. See, e.g. PEF (Kemmy) v State (DSS), GOER File No. 96-05-811 (Lewandowski, 1997)(Holding that the inclusion of restitution as a penalty in Article 33.5 of the Agreement did not limit the Comptroller’s independent statutory authority to recover restitution through recoupment under the State Finance Law).

While, we see no basis for a general challenge to the Comptroller’s determination to place previously missed employees on salary deferral, it is possible that the identification of certain individual employees as not previously subject to salary deferral is incorrect. In the event that an individual bargaining unit member has documentation that suggests he or she was in fact previously subject to salary deferral, the member should be encouraged to immediately notify his or her payroll office to seek correction of the determination to seek salary deferral at this time.

Cc: Field Services Staff
 

memo

TO: Regional Coordinators, Executive Board Representatives, Council Leaders and Field Representatives of OMH Facilities Threatened by Closure

DATE: March 31, 2003

SUBJ: OMH Injunction (TRO) Lawsuit

Following a conference call, Judge Teresi has approved a new schedule on our motion for a preliminary injunction in the OMH case. The State has until April 3 to serve and file answering papers. Our reply papers are now due on April 8.

All the parties have requested oral argument following the filing of the papers. Judge Teresi does not automatically grant oral argument on these types of motions, and will advise the parties whether (and when) he will permit oral argument after he receives all the papers. It is also possible that the Judge may decide a factual hearing is necessary to rule on the motion for a preliminary injunction. The Temporary Restraining Order (TRO) will remain in effect until he rules on the request for a preliminary injunction.

We anticipate CSEA’s case being consolidated with our case before Judge Teresi. Also, NYSCOPBA has initiated a new action and it obtained a TRO before Judge Malone on Friday, March 28. That case will also be heard before Judge Teresi. The attorneys for OMCE indicate they will likely either be filing a lawsuit or preparing an amicus brief in support of the preliminary injunction.

If you have any questions, please contact Susan Mitnick at ext. 280.


Roger E. Benson

cc: Executive Council
Executive Board
Council Leaders
Budget Work Group
Roger Scales
Denyce Duncan Lacy
 

memo

TO:           Executive Board and Council Leaders                    

FROM:     Cliff Merchant, Director of Mobilization and Education

DATE:      March 25, 2003

RE:           Article 15 Professional Development Programs

The Public Service Training Program (PSTP) is funded through Article 15 of the Collective Bargaining Agreement between New York State and the Public Employees Federation.

The current agreement expires on March 31, 2003, which is also the end of the State's fiscal year. Therefore, since there is no funding available and no contractual agreement to provide funding at this time, the PSTP Voucher Program, Voucher Alternative Program (VALT) and the Public Service Workshop Program (PSWP) will be suspended effective March 31, 2003.  The suspension of these programs is consistent with practice in previous years when the PEF/State contract has expired.

If you have any outstanding VALT reimbursements as of March 31, 2003, please send the applications and proofs of payment and completion to the Work Force Training and Development Unit of the Governor's Office of Employee Relations.

After March 31, 2003, all applications, materials, and inquiries (concerning specific applications) should be directed to:

Onnolee Smith
NYS Governor's Office of Employee Relations
2 Empire State Plaza, Agency Bldg. 2
Suite 1201, 7th Floor
Albany, NY 12223

Telephone #: (518) 474-6613 - Fax # (518) 474-8587

PEF represented state employees that continue there professional development after March 31, 2003 should not expect retro-active reimbursement.  Retroactivity of this benefit has not been an historical practice. 

If you have any further questions about these programs please feel free to contact me.

memo

TO:                 Executive Board Members and Statewide Labor Management Chairs

FROM:           Thomas E. Cetrino, Brian Curran, Martin O’Connor, Susan Mitnick and Steve Connolly

DATE:            March 14, 2003 

RE:                 Status of Budget Negotiations and the Impact of the Governor’s 30-day Amendments to the Executive Budget

President Benson has asked us to provide you information on the status of Budget negotiations.  There have been several news stories relating to a possible budget impasse that could result in the shut-down of the State.  PEF will take all possible action to ensure that State employees’ compensation is not affected by this dispute.

Status of Budget Negotiations

The State’s cash flow has become an issue as the battle over tobacco securitization continues.  The SFY 2003-04 Financial Plan shows a very tight cash flow for the State throughout SFY 2003-04.  It assumes the Executive Budget is adopted on time as proposed by the Governor and that tobacco securitization is approved and proceeds are available on April 1, 2003. 

As we discussed in prior memos, the Governor proposes to borrowing against the $11.4 billion in future tobacco settlement funds to raise an estimated $4.2 billion this year.  He would use $1.5 billion to help close the estimated $2.38 billion SFY 2002-03 deficit; $2.3 billion to help close the estimated $9.3 billion SFY 2003-04 deficit; and $400 million to help close the estimated $2.8 billion SFY 2004-05 deficit.

The Assembly opposes securitizing the tobacco settlement fund unless it is in the context of an agreement on the SFY 2003-04 budget.  The Assembly is particularly concerned that the programs funded with the tobacco settlement funds are not fully funded by the Executive Budget in future fiscal years.  The Senate budget analysis estimates that these shortfalls total $151 million over two years (July 2003 through June 2005), including a $63 million cut in worker retraining funds and a $24.9 million cut in certain DOH programs funded with HCRA revenue.

As an alternative, the Assembly proposes that the State borrow $710 million from the Tax Stabilization Reserve Fund to address the SFY 2002-03 budget deficit.  This loan would be interest free and repaid over the next six years.  The balance of the deficit would be funded through the issuance of short-term bonds written against future personal income tax revenue.  According to the Assembly, the Governor’s 5.6 percent-interest-rate tobacco bonds would have cost a total of $6.2 billion.  The Assembly’s proposed bonds would be at 4.3 percent and cost a total of $4.46 billion.  The Governor and the Senate have rejected the Assembly’s proposal claiming it would jeopardize the State’s credit rating.

This dispute and a late budget have the potential to impact the State’s ability to make its payroll and could result in delayed payments to State employees.  The SFY 2003-04 amended Financial Plan warns “…the State would have little ability to incur new liabilities or commitments beginning in April 2003.”  It could also create an atmosphere in which a budget deal might be concluded earlier than in prior years.  The Legislative Office is carefully monitoring this situation. We are in communication with leaders in both houses of the Legislature about this potential crisis.

A more positive development is that the Assembly and Senate have agreed to the revenue estimates included in the Executive Budget.  It has been years since the three parties have agreed on revenues this early in the budgetary process.  Historically, budgets are approved within six to eight weeks of agreement on the revenues.  It should be noted that the agreement is only on the revenues included in the Executive Budget.  This does not preclude the inclusion of new revenue sources in the final budget.  Of course there would have to be agreement on any new revenue source and the amount of money it would generate.

30-Day Amendments

The 30-day amendments assume that $1.9 billion in tobacco securitization proceeds will be available on April 1, a very unlikely scenario.  It does state that the Division of the Budget is preparing a contingency plan of roughly $3 billion in discretionary payments that could be temporarily delayed until the first quarter of 2003-04, “…when the (tobacco securitization) transaction must be completed to finance these payments.” The programs and areas of spending that are potential candidates for delays include reimbursements for costs incurred by school districts, local governments, and outside entities that are usually made during the last two weeks of March.  These delayed payments are designed to put pressure on the Assembly to approve tobacco securitization.

The Governor recently released his 30-day amendments to the Executive Budget.  None of the amendments have a significant impact on PEF’s budget priorities but many impact State Operations programs.  The most significant changes occurred in the State Operations budgets of the Department of Health, Department of Correctional Services, Department of Economic Development, Office of Temporary and Disability Assistance, and Office of Parks, Recreation and Historic Preservation.  A summary of those changes and revised spreadsheets have been forwarded to the Executive Board members and Statewide Labor/Management Chairs of those agencies.  We are also providing additional information we have found concerning the psychiatric center closures and research institute mergers within the Office of Mental Health and an Article VII proposal regarding the State pension system.

The 30-day amendments to the State’s Financial Plan show an additional $180 million shortfall in SFY 2002-03 due largely to lower than expected tax audit recoveries because of delays in implementing a multi-year technology plan ($200 million) and higher costs associated with homeland security ($5 million).  These costs are offset by $25 million in lower spending for the preschool handicapped program.  This $180 million shortfall and the cost of using General Fund revenue to replace a loss of $33 million in federal funding for the incarceration of illegal aliens will be financed by $164 million in proposed reduced spending in SFY 2003-04 and an additional $49 million in revenue from “…an effort spearheaded by Empire State Development Corporation to achieve savings through privatization.” No further information is provided on this privatization initiative but we believe it relates to the sale of State assets such as the site of the former Kings Park Psychiatric Center.  The amendments do not substantially change the General Fund Budget Gaps, which the Financial Plan projects will be $2.8 billion in SFY 2004-05 and $4.146 billion in SFY 2005-06 if all the Executive Budget proposals are adopted.

Pension Reform Proposal

The 30-day amendments include legislation which requires the Comptroller to study several pension reform options aimed at reducing the significant increases in contribution levels that employers (the State and its local governments) are facing.  In recent years, employers have been paying around 1 percent of payroll to the Employees Retirement System.  These rates are higher for Police and Fire.  Now they face contribution rates that could be as high as 11 percent.  The main problem is that the employers were told that the contribution rate would be around 4 percent of payroll and now it looks to be considerably higher than that.  The change from four to eleven percent can translate into three or four times the amount of money depending on the size of the employer.  The most recent projection from the Comptroller is that the increased contribution rates would cost the State $659 million in unanticipated costs.  Local governments could have a combined shortfall in excess of $1 billion.

The Governor cannot actually implement any of the pension reforms he desires but rather can only ask the Comptroller to consider them.  The proposed legislation directs the Comptroller to report on his determinations to the Governor and the Legislature by June 1, 2003.  The Governor’s pension reform options include the following.

Modifying the method of recognizing investment gains and losses.  In determining pension contribution rates, the retirement system measures assets by averaging gains and losses of equity investments over a five-year period.  This accounting technique, called smoothing, is intended to reduce fluctuations in contribution rates that result from volatile investment returns.  Currently, the retirement system places certain limits on the smoothing of investment gains and losses even though such limits are not required under Government Accounting Standards Board (GASB) standards for public retirement plans.  The Governor claims that these limitations are a major reason for the huge spike in contribution rates that employers are currently facing.  According to the Governor, the basic pension contribution rate for 2003 would be much closer to four percent if the Retirement System were to remove the asset smoothing limits as allowable under GASB rules.

Amortizing the benefit improvements enacted in 2000 over 30 years.  According to the Governor, separate amortization of significant benefit improvements is a reasonable option that has been employed by other retirement systems to fund improvements more gradually.

Phase in large increases in contribution rates.  The Governor believes that the way that Comptroller McCall implemented the PUC lawsuit provides a precedent for this option.

Reform the process of estimating pension costs.  The Governor wants the Comptroller to establish pension contribution rates one year before they are billed.  He believes this change would help avert the current situation in which actual billing rates turn out to be substantially different than what employers have budgeted.  The Governor claims that this billing schedule is common practice in other retirement systems, including the New York State Teachers’ Retirement System, and is endorsed by the GASB.

Comptroller Hevesi has informed PEF that he is reviewing many options and will provide PEF with his pension reform plan for review in the coming weeks.  He has said that his number one concern is the solvency of the Common Fund and PEF shares that concern.  Once we have reviewed the Comptroller’s plan, we will provide you with an update on this issue.

Major Changes Reflected in the 30-day Amendments / New Information Concerning Proposed Closures and Mergers

The following is a summary of the major changes affecting State Operations contained in the Governor’s 30-day amendments and new information concerning OMH closures and mergers.

Department of Health

• The transfer of 18 positions from the Health Care Standards and Surveillance Program to the Office of Managed Care is reflected in a shift of $1.1 million in personal services.  The FTE projections in the Executive Budget do not reflect an increase in positions to the Office of Managed Care, which shows a reduction of 9 positions during SFY 2003-04.  The nonpersonal service appropriation for the Health Care Standards and Surveillance Program is increased by $648,000, which may reflect an increase in contractual services for inspector positions.  This needs to be clarified in Labor/Management.
• The Special Revenue-Other appropriation for the Wadsworth Center for Laboratories and Research Program is increased by $1.5 million as follows: a $1.2 million increase for the Clinical Laboratory, including $676,000 in personal services; and a $272,000 increase for the Environmental Laboratory, including $97,000 in personal services.

Office of Mental Health

• The 30-day amendments do not include any changes in the transfer of function provisions in the Article VII bill.  The original Article VII bill provided for a transfer of function upon enactment only from Nathan Kline to the New York Psychiatric Institute.  Similar provisions have not been added for any of the psychiatric centers for which closure has been proposed (Elmira PC, Middletown PC, and Hutchings PC).  Without such a provision in legislation, any transfer of function would require an Executive Order.  This administration has never used an Executive Order for such a purpose, and to date PEF has no indication that such action is being planned.  PEF is in the process of clarifying the intent of the administration in this regard.

Office of Temporary and Disability Assistance

• The 30-day amendments reduce the Systems Support program by $12 million.  This consists of a $2 million cut in the General Fund appropriation for multi-agency human services computer systems program and a $10 million reduction in the Special Revenue Funds-Federal appropriation for human services computer systems development activities.  It is not clear what the impact of these cuts will be but it does not appear that they will affect the FTE levels provided in the Executive Budget.

Department of Correctional Services

• Reduces by $32.562 million the Special Revenue-Federal appropriation in the Administration program for the incarceration of illegal aliens.  These funds are replaced by a $19.613 million increase in the nonpersonal service appropriation in the Support Services Program and a $12.949 increase in the personal service appropriation in the Supervision of Inmates Program.

Department of Economic Development

• Adds $1 million to the nonpersonal service Special Revenue-Other appropriation in the Marketing Program’s Commerce Economic Development Assistance Account to reflect increased revenues from royalty agreements, advertising, marketing, and licensing.

Office of Parks, Recreation, and Historic Preservation

• Adds a $650,000 Special Revenue-Other appropriation in the Park Operations Program’s I Love NY Water Account for services and expenses related to boating access and maintenance, which is funded by a new boating access surcharge fee.  This appropriation can be transferred to the Office’s capital projects fund or aid to localities budget.

We will continue to update you on significant budget developments.

Contract Update (Number 03-03)

March 20, 2003

TO: Executive Board
PEF Field Offices

FROM: Bob Carrothers, Director of Contract Administration

RE: 2003 Performance Award Payments


The Office of the State Comptroller has just released the payroll bulletin concerning payment of the April 2001 Performance (longevity) Awards. (The actual bulletin can be found at http://www.osc.state.ny.us/paysr/bulet373.htm).

The awards will be paid in separate checks dated April 17, 2003 (institution payroll) and April 23, 2003 (administrative payroll). There is no direct deposit of these checks.

The eligibility criteria for the awards have not changed. The awards ($1,250/$2,500) will be paid to employees with satisfactory performance evaluations who have completed 5/10 years of service at the job rate of their current position as of March 31, 2003. Employees who are on Workers' Compensation Leave on that date are eligible for the full award to be paid on the same April date. VRWS participants are entitled to the full payment, but the award amount is pro-rated for employees working in part-time items. Employees on military leave or military leave at reduced earnings is eligible for the payment. Any employee with questions about eligibility should check with their payroll office. OSC has made a tentative list of eligible employees available to agencies.

As in past years, the payment will be automatic, requiring no special action by the agencies. However, employees who had a change in payroll status during the past year (e.g., change in part-time status, period of leave without pay), should check with their payroll office on their eligibility.

With the upcoming expiration of the PS&T Contract, we are often asked about the status of future awards. As part of the current contract, the State has agreed to continue paying these awards to people who receive them in 2003, even if a successor agreement is not in place. There is not, however, any agreement about paying people who first become eligible in 2004 for either the 5 or 10 year performance award. If the State chooses not to pay this group of people in 2004, we will take appropriate action.

Any questions about the payment schedule or eligibility should be directed to Contract Administration at 1-800-342-4306, ext. 223.

memo

TO:                 Executive Board
                        Council Leaders

FROM:           Contract Administration Department

DATE:            March 21, 2003

RE:                 FAQ on Military Activation

As you know, we have been successful in obtaining Memoranda of Agreement with GOER to protect the benefits of PEF members called to active military duty.  The attached frequently asked questions summarize the benefits provided by the multiple agreements we have signed.

Any questions should be directed to Contract Administration at 800-342-4306, ext. 223.

Military Leave from State Service - What Are My Benefits If I Am Called Up to Active Duty in Calendar Year 2003?

Q.        If I am activated for military service during 2003 what paid leave will I receive during my activation?

A.        Under provisions of the NYS Military Law and a Memorandum of Understanding between PEF and the State of New York regarding military leave, you are eligible for the following types of fully and partially paid leave:

Military Leave with Pay

NYS Military Law Section 242 provides for paid military leave for 30 calendar days or 22 work days (whichever provides the greater benefit to the employee) in any calendar year or any continuous period of absence which spans more than one calendar year.  This leave is available for any type of military activation.

If you have not charged military leave with pay during 2003, you will be eligible to receive the full benefit provided by the Military Law when you are called up to active duty. If you have charged a portion of your Military Leave with Pay in 2003 for intermittent leave (e.g. training time), you will receive the balance of the 30 calendar days or 22 working days entitlement when called up to active duty.

Supplemental Military Leave

After exhausting leave benefits available under NYS Military Law Section 242 for calendar year 2003,  you may also be eligible for an additional 30 calendar days or 22 work days (again whichever provides the greater benefit to the employee)  of “supplemental military leave.” Supplemental Military Leave is also leave at full pay.  

This benefit is provided though a Memorandum of Understanding (MOU) between PEF and the State of New York covering the period from September 11, 2001 though December 31, 2003.  Employees are eligible to receive Supplemental Military Leave only once during the period covered by this MOU. If you have charged 30 calendar days or 22 work days of Supplemental Military Leave since September 11, 2001 you will not receive it again.

You are eligible for this leave if you are called up to active duty in connection with the events of September 11, 2001.  It is our understanding that the State is interpreting the requirement of a relation to the events of September 11, 2001 broadly and is including activations associated with military action against Iraq under that requirement.

Military Leave at Reduced Pay

After exhausting Military Leave with Pay and Supplemental Military Leave, you may then charge off any accruals (other than sick leave) which you elect to use to remain in full pay status. After exhausting any accruals you elect to charge, you may then be eligible for Military Leave at Reduced Pay.  Under the current Military Leave MOU, Military Leave at Reduced Pay will continue until the end of your activation or December 31, 2003 which ever comes first.  

While on Military Leave at Reduced Pay, you will receive your State salary (base pay at the time of activation plus any location pay and geographic differential) reduced by your military pay (defined as base pay plus housing and food allowances).  If your military pay exceeds your State salary you will receive no compensation from the State during this period.

Like Supplemental Military Leave, you are eligible for this leave if you are called up to active duty in connection with the events of September 11, 2001.  As with Supplemental Military Leave, it is our understanding that the State is interpreting the requirement of relation to the events of September 11, 2001 broadly and is covering activations associated with military action against Iraq under that requirement. 

Q.        After I return from active service, am I entitled to any additional leave for other military service (e.g. continuing training obligations)?

In the current Military Leave MOU the State and PEF agreed to create a new type of reduced pay leave called Training Leave at Reduced Pay.  You are eligible for Training Leave at Reduced Pay if you are returning from active military duty in connection with the events of September 11, 2001 and have exhausted your calendar year 2003 entitlement to Military Leave with Pay under Section 242 of the NYS Military Law.

During calendar year 2003 eligible employee may use up to 30 calendar days or 22 work days (whichever provides the greater benefit) of Training Leave at Reduced Pay for any required military duty (including mandatory weekend and summer training or other activation) that is not related to the events of September 11, 2001.

While on Training Leave at Reduced Pay you will receive your State salary (base pay at the time of activation plus any location pay and geographic differential) reduced by your military pay (defined as base pay plus housing and food allowances).  If your military pay exceeds your State salary you will receive no compensation from the State during this period.

Q.        Will my and my dependants’ health insurance coverage continue while I am on fully paid leave (military leave, supplemental military leave, charge to leave credits)?

A.        Your health insurance (with continued payment of the employee share of premium – 10% for individual and 25% for family coverage) will continue during any period that you remain in full pay status including, Military Leave with Pay, Supplemental Military Leave, and any period during which you charge to accruals.  Your personal coverage will cease when you exhaust Military Leave with Pay, Supplemental Military Leave, and any period during which you choose to charge accruals (other than sick leave).  Dental and vision care benefits will continue at no cost to you.           

Q.        Will my dependants’ health insurance coverage continue while I am on Military Leave at Reduced Pay?

Article 9.9(d) of the 1999-2003 PEF/State Agreement provides continuation of health insurance coverage for dependants of employees subject to a federal activation, by declaration of the President or Act of Congress.  These benefits will be provided to covered dependants for up to twelve months from the date of activation, less any periods of full pay status, with no employee contribution. Under this provision, health insurance for your family will continue without charge to you while you are on Military Leave at Reduced Pay.

If you exhaust your contractual twelve month entitlement to contribution free health insurance coverage for your dependents, the current Military Leave MOU, provides that if you are called up to active duty in connection with the events of September 11, 2001 dependant coverage will continue until the end of your activation or December 31, 2003 which ever comes first.  Once again, it is our understanding that the State is interpreting the requirement of relation to the events of September 11, 2001 broadly and is covering activations associated with military action against Iraq under that requirement.

Coverage under these provisions is limited to dependants because the Federal government provides complete health insurance coverage to all reservists and members of the National Guard who are part of a federally sponsored activation. If you choose to enroll your dependants in the military health insurance program, coverage through the New York State Health Insurance Program will be suspended for the period of your active duty. 

Q.        Will I continue to earn leave accruals while I am on fully paid leave?

A.        While you are on Military Leave With Pay and Supplemental Military Leave With Pay you remain in full pay status.  During this period if you are otherwise eligible to earn leave accruals (vacation, sick and personal leave) you will continue to do so in the same manner as you do while working.

Q.        Will I continue to earn leave accruals while I am on military leave at reduced pay?

A.        While you are on Military Leave at Reduced Pay you will not earn bi-weekly vacation and sick leave credits. However, if your vacation anniversary date or your personal leave anniversary date fall during your period of Military Leave at Reduced Pay you will be credited with any bonus vacation, additional vacation days or personal leave days for which you are eligible and your anniversary date will not be adjusted.  Any accruals balances which you have at the time that you begin Military Leave at Reduced Pay or Training Leave at Reduced Pay will be restored to you when you return from leave with the exception of any leave credits which otherwise expire during that period (e.g. unused personal leave).

Q.        Do I have a hold on my position while I am on Military Leave?

A.        Yes, NYS Military Law § 242 generally provides that any employee who is absent from work due to ordered military duty shall be granted a leave of absence from his/her State position for such duty.  This leave of absence does not interrupt continuous employment for seniority purposes.

Q.        Do I get retirement service credit while I am on military leave?

A.        Yes, you are entitled to retirement service credit for all periods during which you are called to active duty. While you remain in full pay status you will continue to accrue retirement service credit in the same manner as you normally do. If you are in Tier 3 or 4 and still making a 3% employee contribution to the Retirement System, the deduction from your paycheck to cover that contribution will continue so long as any salary you are receiving is sufficient to cover the cost of your 3% employee contribution.  Once you begin receiving Military Leave at Reduced Pay (or go on unpaid military leave), if any reduced pay is insufficient to cover the 3% contribution, you must make up those contributions based on the salary you would have received from the State if you had not been activated.  Such contributions may be made to the Retirement System within five years of the termination date of ordered military duty.

Employees who are interested in receiving retirement service credit for any period of activation during which they are on Military Leave at Reduced Pay or unpaid military leave should contact the New York State Retirement System, whether or not they are still making contributions, to request full retirement service credit for the entire period of their activation and arrange for payment of any unpaid employee contributions for the period of activation.

memo

TO: PEF Leaders and Staff at Targeted OMH/OMR Facilities

DATE: March 12, 2003

SUBJECT: PEF Response to OMH/OMRDD Closures and Consolidations Timeline

In direct response to the release late yesterday afternoon of the attached timeline for closures and consolidations at OMH and OMRDD, PEF is initiating legal action seeking a temporary restraining order and a preliminary injunction against the closures of Elmira, Middletown and Hutchings Psychiatric Centers and the closure of Nathan S. Kline Institute. We plan to go to court within a week.

This action was precipitated by a meeting yesterday afternoon between GOER, OMH, OMRDD and the unions representing state workers at the OMH and OMRDD facilities targeted for closures and consolidations. The attached timeline for transfer of function (TOF) and reductions in force (RIF) was distributed and discussed (requires Adobe Reader). Administration representatives made it clear that they intend to move forward with the closures and consolidations and are not waiting for legislative action on specific proposals in the budget, including satisfying the one year notification requirements of Section 7.17 of the Mental Hygiene Law.

Critical dates in the timeline include:

1. 3/14/03 Posting of TOF lists at EPC, MPC, Rochester PC, Mohawk Valley PC, Rockland PC, NKI and NYPI

2. 3/17/03 Distribution of “Blue Cards” to affected employees at all facilities

3. 4/4/03 Final date of Voluntary Transfer choice meetings with staff at closure hospitals

4. 4/2/03 Deadline for affected employees to respond to TOF posting

5. 4/17/03 TOF implemented at closure and consolidation facilities

6. 6/25/03 Effective date of RIFs at all affected facilities
 

In addition to the timeline, there are several significant issues which were raised at the meeting:

1. The plan includes the transfer of function for outpatient functions from the closing facilities to the receiving facilities and from Nathan Kline to NYPI for research functions. OMH intends to accomplish this through transfers under Section 70.2 of the Civil Service Law, which they contend the Commissioner has the authority to implement. PEF does not believe this section allows for transfers of function within the same department or agency.

2. The plan is for patients and staff to be moved to the receiving facilities in late June; however, if there is insufficient staff at any of the facilities, patients will be moved sooner. We believe it is the intent of OMH to accelerate the movement of patients by intimidating staff into taking early retirements and voluntary transfers.

3. Employees who are eligible for the current ERI offering but who did not submit a letter of intent to their Personnel Office by the March 10 deadline can still take the ERI if they notify the Retirement System by March 17.

PEF is responding to this threat of imminent layoffs. The legal department is moving rapidly to initiate legal proceedings to force an injunction on OMH for violation of the notification proceedings and the inapplicability of 70.2 transfer provisions to intra-agency involuntary transfers. Contact is being made with key legislators to provide additional assistance in preventing the closures and consolidations. Fight back activities will be escalated and accelerated in accordance with the new information on timelines. I anticipate that you will have many questions as a result of this information, and we will attempt to deal with them in a timely manner.


Each of you will be contacted soon with additional information and directions for future activities as they are developed. Together we will be successful.


Roger E. Benson

Att.

CC: PEF Regional Officers
Executive Board
Council Leaders
Brian Curran
Bob Bain
Roger Scales
Steve Chamberlain
Tom Cetrino
Susan Mitnick
Bob Carrothers
 

Contract Update (number 03-01)


March 11, 2003

TO: Executive Board Members
Council Leaders
Regional Offices

FROM: Bob Carrothers, Director of Contract Administration

RE: Dependant Care Advantage Account/Sunset of Employer Contribution

Since 2001, State employees who enrolled in the Dependant Care Advantage Account (DCAAccount) to pay for dependant care expenses on a pretax basis have also received a small employer contribution to their DCAAccount to assist with such expenses. Moneys to fund that benefit were set aside in Article 42 of the 1999-2003 Agreement with the State.

With the April 1, 2003 conclusion of the term of the 1999-2003 Agreement, monies to fund the employer contribution to the DCAAccount will no longer be available. The sunset of this benefit will not affect employees who have already enrolled in the DCAAccount and received the employer contribution for 2003. However, employees who enroll in the DCAAccount with a Change in Status (CIS) form after April 1, 2003 will not receive the employer contribution to their DCAAccount for 2003.

Any bargaining unit member who returns from leave of absence, registers a school age child for summer day camp, or has any other eligible Change in Status triggering entitlement to enroll in the DCAAccount before April 1, 2003 should immediately enroll to receive the employer contribution. To get the contribution employees must submit a CIS form to the DCAAccount before April 1, 2003.

While the employer contribution to DCAAccounts sunsets after April 1, 2003, the DCAAccount itself will not. Bargaining unit members who must pay for dependant care expenses in order to work can still achieve significant savings by paying for those expenses on a pre-tax basis through the DCAAccount. Bargaining unit members who are interested in additional information should be encouraged to visit the DCAAccount website, www.flexspend.state.ny.us, or call the DCAAccount hotline at 1-800-358-7202 and press 2.

If you have any questions about this memo, please contact Contract Administration at 800-342-4306, ext 223.
 

memo:

TO: Executive Board and Council Leaders

DATE: February 13, 2003

RE: Standby On-Call and Overtime Meal Allowance Arbitration Decision

I am very pleased to report that PEF has won the Standby On-call and Overtime Meal Allowance contract arbitration. This success will result in eligible PEF represented employees sharing between $1.25 and $1.75 million in retroactive payments.

You may recall that PEF negotiated significant increases to both Standby On-Call and Overtime Meal Allowances in the last contract. Our negotiators advised us at the time that both of these benefits were retroactive to the first day of the new Agreement. Subsequent to the contract being ratified by our members the State announced that they were not making the increases retroactive to April 2, 1999 but rather 12 months later for Standby On-Call payments and 15 months later for the Overtime Meal Allowance benefit. PEF challenged the State that they were attempting to take by fiat what they had failed to legitimately negotiate at the bargaining table and we filed a contract grievance accordingly. In her award dated February 12, 2003, Arbitrator Tia Schneider Denenberg found for the union. The decision is attached (requires Adobe Reader).

PEF Counsel does not believe the State has the necessary grounds to successfully challenge this decision. Given the exceptional value of the award, however, the State may try this tactic anyway. If they do we will continue in our fight until our members get every penny we negotiated for them. Assuming the state does not challenge the award, the next step will be the identification of every individual who is eligible for back pay and the amount in each case. Those eligible for retroactive compensation include the following:

1) PEF represented State employees who received Standby On-Call payments between April 1, 1999 and April 1, 2000 will receive the increase from 15% to 20% of their daily rate of pay for all Standby payments received during that period; adjustments will also have to be made to overtime payments since Standby pay is included in the Overtime rate.

2) PEF represented State employees who should have received Overtime Meal Allowances between April 1, 1999 and August 10, 2000 for the Institution payroll and August 17, 2000 for the Administration payroll will also be compensated for such meals. This includes overtime eligible employees who became entitled to the benefit for the first time and the addition of a second meal allowance for employees who worked extended overtime hours.

I want to thank those PEF advocates who successfully fought for our PEF members in this case. Of particular note are Contract Administration staff Bob Carrothers, Director, and Elizabeth Hough, Associate Counsel. Both spent tireless hours taking this challenge from inception to successful completion. I also want to thank PEF's 1999 Chief Negotiator Joe Buckley, the 1999 Contract Chairperson Eric Miller and the entire 1999 Team for delivering these benefits in the first instance.

You will be kept informed of the next steps.
 

Roger E. Benson
President


cc: PEF Staff
 

memo:

TO: Executive Board

DATE: January 31, 2003

SUBJ: Pre-Tax Transportation Pilot Program

I am pleased to inform you that PEF and GOER have now signed a Memorandum of Understanding to implement a pilot program for pre-tax transportation benefits. The pilot is not as expansive as we might have liked, however, I am pleased that we are now finally moving forward with this long awaited benefit. More importantly, we are optimistic that once the program is up and running, it will give us solid information on which to pursue expansion of all pre-tax benefits in the upcoming negotiations.

Many of the details of the program are still being developed, however, the signed MOU will help move the pilot program along. There is still no firm implementation date set, primarily because the precise date is dependent on how well and how soon the state computers can interface with the vendor administering the benefit. GOER has told us that their goal is to implement this benefit as soon as possible once the major “bugs” are corrected, and we will continue to work with them to assure that this program comes on-line soon.

I have asked staff to prepare the attached FAQ sheet to explain what we know about the program, and how it will work. Any questions should be directed to staff in Contract Administration at x. 223. The specifics of the program may change as implementation develops, but this is our best understanding at this time.


Roger E. Benson
 

memo

TO: Stewards & Delegates

DATE: January 21, 2003

SUBJ: Sick Leave Parity

On behalf of Secretary-Treasurer Jane Hallum and Vice Presidents Pat Baker, Ken Brynien and Joe Fox, I am very pleased to report that on Friday, January 17, GOER Director George Madison and PEF signed a Memorandum of Understanding (MOU) that brings all full time PEF-represented State employees to a full 13 days per year of sick leave accruals. All full time PEF-represented employees hired after April 1,1982 who are eligible to earn sick leave will begin earning 13 days of sick leave per year on March 27, 2003 for employees on the administration payroll and April 3, 2003 for those on the institution payroll. Ten month employees, and employees working other than full time hours, who are eligible to earn sick leave will also begin earning sick leave at an equivalent enhanced rate. The terms of this MOU are attached (requires Adobe Reader). The substance of this MOU will become part of our successor collective bargaining agreement.

This MOU finally brings all PEF-represented State employees to sick leave parity; a goal of PEF for over 20 years. While it could have been possible to achieve this goal earlier by giving back our second longevity step, no contract team or president was willing to make that concession. The significance of this parity agreement is that it has been made without a PEF contract concession. You may recall that GOER made a handshake agreement on this matter with PEF last summer, and I am pleased that it has now been achieved.

This enhancement could not have occurred without the support and unity of the Executive Council, Executive Board and, ultimately, the delegates who recognized that to achieve this success required that our Union speak with one voice. While others have attempted this parity achievement, it was only possible because the PEF leadership worked together in a focused fashion for nearly a year to benefit our members. It is this kind of leadership and singular purpose that will be necessary for us to again achieve a successful contract negotiations.

My congratulations and appreciation to everyone who made this possible.




Roger E. Benson

Attachment

cc: PEF Staff

memo:

TO:                 Executive Board
                        Council Leaders

FROM:           Martin C. O'Connor

DATE:            January 21, 2003

RE:                 Early Retirement Incentive Update

Part A

The following agencies have either offered Part A of the ERI or are currently offering Part A:

Aging, Attorney General’s Office, Department of Civil Service, Commission on Quality Care for the Mentally Disabled, Department of Motor Vehicles, Higher Education Services Corporation, Division of Housing and Community Renewal, Inspector General’s Office, Office of Alcohol and Substance Abuse Services, Office of Children and Family Services, Office of General Services, Office of Mental Health, Office of Mental Retardation and Developmental Disabilities, Office of Real Property Services, Office of the State Comptroller, Office of Temporary and Disability Assistance, Office of Parks, Recreation and Historic Preservation, Division of Parole, Public Employees Relations Board, State Insurance Fund, State University of New York, Department of Taxation and Finance, and the Office of Tax Appeals.

Of the agencies that have not offered Part A of the incentive;

v     The Department of Labor won't offer Part A unless there are reductions in other agencies and they need to be placed in DOL via §78 of the Civil Service Law.  They have done a survey of interest.  If an incentive will be offered in Labor it will not happen until after the Executive budget is announced.

v     The Department of Transportation is saying they are going to open a window but have not yet. 

v     The Department of Correctional Services has been considering a window since May and still has not asked the Governor’s Task Force for permission to open a window.

The Office of Mental Health has asked for approval from the Governor’s Task Force for another ERI window.  No specifics are known at this time.

The Governor’s Task Force has informed PEF that they have changed their interpretion of the seniority provisions in the law.  To date, agencies have offered the ERI to the most senior person working in the targeted title and work location.  The Task Force has said that they will allow agencies to offer the ERI to the most senior person in the title and work location who has already expressed interest.  This means that agencies will not have to canvass the most senior employees who have not expressed interest.  The Task Force has agreed that if a more senior employee, in the targeted title and work location who has not already expressed an interest, expresses an interest, in writing before the application deadline (not less than 21 days prior to the end of the open period) they will get the ERI.

It is important that if you are even remotely considering taking advantage of the ERI that you express an interest as soon as possible.  The law requires this expression of interest in writing.

If you have not expressed an interest and change your mind prior to 21 days before the end of the open period it is not too late.  You must put your expression of interest in writing and get it to your administration before the 21 day deadline.

Part B

We have been getting a lot of questions from members about the 25/55.  The primary question relates to the payment of the longevity award.  PEF members retiring under the 25/55 provision of the ERI will not be eligible for the longevity award.  The Comptroller’s Office has informed us that you can not be on payroll on the date of your retirement.  Since you must retire by March 31^st your last day on payroll is March 30^th.  The contract requires that you be on payroll on March 31^st to be eligible for the longevity award. 

The law also states that you must apply for retirement “not less than fourteen days prior to the effective date of the retirement to become effective.”  So make sure that you apply in time and that your retirement date is no later than March 31^st.

We are collecting the names of individuals that wish to fight their denial of eligibility for the 25/55.  So far we have received ten names.  We need these names as quickly as possible so that we can begin putting together our case.  If you are interested in being part of a lawsuit, or know someone who is, contact the PEF Legal Department as soon as possible.

Next Fiscal Year

PEF has not been told if an ERI will be proposed in the 2003-04 Executive Budget.  Obviously we will be looking closely to see what the Governor does.  At this point it is likely that agencies are trying to get as close to next year’s fill levels as they can so that they can achieve full-year savings in the vacated items.

We will keep you updated on this and all other developments with the ERI.

memo

TO: Executive Board
Council Leaders

DATE: January 2, 2003

SUBJ: 25/55

Late Monday afternoon, we received preliminary information on 25/55 rejections. You may recall that passed legislation permits the State to withhold this option from those employees deemed critical for health and safety reasons. Unfortunately, 30 PEF titles containing 186 PEF members eligible for the 25/55 have been rejected at this time. The overwhelming majority are from the Office of Mental Health in such titles as Nurse 2, Psychologist 2, Psychiatrist 2, Nurse 2 Psychiatric and Licensed Psychologist. The largest number of potential rejections appear to be from Pilgrim and South Beach Psychiatric Centers, 17 and 13 PEF members respectively. The attachment lists the titles by location that have been exempted from participating in the 25/55 option.

You will also recall that PEF insisted when this legislation was written that there be legal recourse and, on that basis, I have already asked our General Counsel to begin an outline of our case which could be presented in Supreme Court. Of the potential rejections, we are still not certain how many candidates in these titles will actually be seeking retirement. Please forward to my office the names of all members who have been denied 25/55 retirement and want to legally challenge their rejection. There is a four month statute of limitations for an Article 78 proceeding, so please act promptly.

What this information demonstrates again is that PEF members perform indispensable services at uncompetitive salaries. Because of this, the State refuses to let them take advantage of retirement options uniformly available to members of other bargaining units. While this information has only been in my office for a short period of time, I can assure you that our response will be strong and appropriate. It is completely unacceptable that benefits available to some State employees are not available to others or, stated another way, the “reward” for our indispensable, underpaid members is they are prevented from retiring without penalty, as are coworkers in less essential titles.



Roger E. Benson
Attachment
cc: PEF Staff
 

memo

TO: PEF Stewards & Delegates

DATE: December 20, 2002

SUBJ: Contract Negotiations

As we move toward the actual beginning of negotiations in late January, we have prepared talking points regarding PEF’s position, strategies and tactics. These talking points (blue sheets) have been made into a series of nine headlines with the hope that all PEF activists will be, at a minimum, prepared to discuss these with their members. These talking points will be posted on the PEF web site and also distributed by e-mail. Of course, we expect that regular updates will be prepared after we actually sit down with management.

The information in the talking points is also provided in a Frequently Asked Questions (FAQs) format (yellow sheets). We know there are members who prefer that format so we have provided the information as both talking points and FAQs.

Our contract team and staff have spent the past year preparing for these negotiations, and I want to thank them for their commitment to the membership and wish them well as they embark on a journey they will never forget. The members of our team are:

Vice President Ken Brynien, Contract Chair
Olivia Robinson, Tax & Finance (Region 1)
Rosemary Rossi-Williams, OMH (Region 3)
David Stallone, DOCS (Region 4)
June Edwards, SUNY Upstate (Region 4)
Juanita Babcock, OMRDD (Region 7)
Joe Tewksbury, Parole (Region 8)
Arlea Igoe, OTDA (Region 8)
Lou Matrazzo, DOH (Region 8)
Todd Fryer, Insurance Department (Region 8)
Lola Parks Guerra, DOH (Region 10)
Kartikey Adhvaryu, DOT (Region 11)
Donna Rodriguez, Tax & Finance (Region 12)
Roger Scales, Lead Negotiator
Anthony Wildman, Deputy Lead Negotiator
Robert Carrothers, Contract Administration
Elizabeth Hough, Counsel
Tracy Scholz, Nurse Organizer
Lorraine Simpkins, Health Benefits
Deborah Stayman, Health Benefits
Meghan Hunt, Recorder

The button that is reproduced on the top of the attachments identifies the cornerstones of our negotiation efforts. We have pride in what we have accomplished in the past, the power to achieve another fair contract and the purpose to understand this will not be a quick process. With your help and support, I am confident that our team will eventually bring to the membership a contract we can embrace.

The Officers and staff wish you the best for a happy holiday season and New Year.


Roger E. Benson

Attachments

cc: PEF Staff
 

Office of General Counsel

TO: Executive Board Representatives, Regions 10 and 11
Council Leaders, Regions 10 and 11

FROM: William P. Seamon

DATE: December 12, 2002

RE: Possible TWU Strike Against the MTA

Given the possibility that the Transport Workers Union (“TWU”) will begin a strike against the Metropolitan Transportation Authority (“MTA”) on December 16, 2002, we are providing this advisory to address questions which are likely to arise concerning the obligations of our members should such a strike occur.

While local PEF leaders should rightfully support TWU’s efforts to obtain a fair and just contract, PEF leaders should be careful not to say or do anything to encourage or condone a TWU strike or other illegal job action.

In the event of a strike, PEF members who commute to work by subway or bus would be expected to make alternate transportation plans. Although we realize the significant difficulties and hardship involved in making such alternate arrangements, there is simply no Taylor Law exception for these circumstances. As discussed below, an employee who is absent from work during a strike could face Taylor Law penalties or disciplinary action.

First, the Taylor Law specifically prohibits public employees and employee organizations from engaging in a strike or causing, instigating, encouraging or condoning a strike. Thus, it would clearly be illegal for TWU to engage in a strike against the MTA.

The Taylor Law has a very expansive view of what actions constitute a strike. Concerted work slowdowns, sick-outs, refusals to work certain assignments and even working-to-rule are considered strikes.

If TWU goes on strike, PEF members must cross their picket lines. Failure to cross picket lines would likely be considered either participating in or condoning a strike and a violation of the Taylor Law. The Taylor Law contains a presumption that an employee who abstains wholly or in part from the full performance of his or her duties during a strike is presumed to have engaged in the strike. An employee who fails to cross a picket line could be subject to disciplinary charges of insubordination as well as charges of Taylor Law violations.

In terms of Taylor Law penalties, employees who are absent from work or refuse to work, may overcome the presumption that they engaged in an illegal strike by proving that their refusal to work was due to a bona fide fear of personal injury or an unusual or abnormal safety or health hazard. This is a difficult standard to meet.

Obviously, situations which occur during a strike are extremely fluid. Members with questions should, in the first instance, contact their assigned Field Representatives, who will work closely with Counsel’s Office to address such questions.

WPS/mab
cc: Statewide Officers
Roger L. Scales
Kalliopi Zervos
NYC Field Representatives

What follows is GOER’s memorandum informing N.Y.S. Agencies of its expectations in the event of a Transit Strike.

MEMORANDUM from the NYS Governor’s Office of Employee Relations

To: All State Department and Agency Heads

From: George Madison, Director

Date: December 12, 2002

Subject: Possible Transit Disruption in NYC

As you know, public transit service in New York City may be disrupted because of labor problems. The resulting disruption in services may affect State employees in and around the Metropolitan area. This memorandum is intended to advise all State agencies regarding State policy on this matter.

The State’s policy has been and continues to be that every effort will be made for the continuation of services by the State and its employees in the face of difficult circumstances. In the event of a disruption in transportation services, the State’s objectives are to:

To meet these objectives, each agency should formulate specific plans tailored to its needs with emphasis on clearly identifying and providing for continuous operation of essential services and activities.

The following is provided for information and guidance:

Questions regarding this memorandum may be directed to your agency liaison in the Governors office of Employee Relations.

Cc: Directors of Human Resources

TO: Executive Board Members, Statewide Labor Management Chairs, and Council Leaders

FROM: Thomas E. Cetrino

DATE: November 18, 2002

There is a great deal of confusion regarding the fiscal status of the SFY 2002-03 budget and how that will impact next year’s projected deficit. In the last month both the Office of State Comptroller, the Division of Budget (DOB), and Senator Bruno have all issued press releases or statements expressing different opinions on the size of our current fiscal year’s revenue shortfall and next year’s budget deficit. The following memo examines the issues and all available information surrounding this controversy and makes the best objective estimate regarding the likely size of this year’s and next year’s deficit.

Current Year (SFY2002-03) Deficit

On September 30, 2002 (the midpoint of the fiscal year), the Comptroller released his most recent monthly cash basis accounting report for SFY2002-03. This report documented lower than expected personal income tax revenue collections and lower than expected business tax collections in the first half of SFY2002-03. I have included an analysis of these decreases at the end of this memo.

DOB immediately criticized the Comptroller regarding his estimate of the amount of revenue growth that would be needed in the second half off SFY2002-03 to meet financial plan projections. They did admit that they needed 4% growth in revenue collections above the amount collected in the first half of SFY2002-03 rather than the 12% growth estimated by the Comptroller. Since then DOB released its Mid-Year Financial Plan on October 30, 2002. The report states that “…it is becoming more likely that the State will experience a decline in its revenue situation in fiscal year 2002-03.” The report attributes the decline to a greater than expected deterioration in the stock market which has resulted in a greater decline in finance industry employment and weaker prospects for bonus income. The report also states that the possibility of a large scale war in the Middle East and fears of terrorist attacks also pose a risk to the national and State economies and could negatively impact State revenues. The report concludes that, “The evidence of this possible deterioration (of state revenues) will not become known until the December through March receipts experience is available.”

The Citizens Budget Commission, a non-partisan fiscal “watchdog” funded by the New York City business community, examined most of the evidence discussed above and estimated that State revenues in 2002-03 would be as much as $1.5 billion lower than projected in the SFY2002-03 Enacted Budget. Moody’s Investor Services and the Senate Majority estimate that based on current revenue flows as compared to last year’s revenue flows, the State will be about $2 billion short of their revenue projections for SFY2002-03. Based on all available evidence it is best to estimate the current year (SFY2002-03) deficit at between $1.5 and $2 billion. Please see my analysis of the Controller’s mid-year cash basis report at the end of this memo for a more complete explanation as to why I believe these estimates are accurate.

The Division of Budget estimated in May 2002 that the Enacted SFY2002-03 Budget would result in a 2003-04 budget gap between $2.8 billion and “significantly below” $5.7 billion. DOB now admits that the State’s revenue situation has deteriorated and most state fiscal experts believe the 2003-04 budget gap will be greater than $5.7 billion.

We estimate the 2003-04 budget gap at between $8 and $9 billion assuming State revenues for SFY2002-03 are between $1.5 and $2 billion below the enacted budget’s projections. This estimate takes the $2.8 billion budget gap estimated in the 2002-03 Executive Budget and adds the following:

This estimate could increase if:

The estimated $8 to $9 billion budget gap could also decrease if:

A $2 billion revenue gap for SFY 2002-03 has many implications for the State workforce. The State has only $710 million left in the Tax Stabilization Reserve Fund, which can only be used when mid-year budget shortfalls occur like those anticipated for SFY2002-03. If all of that reserve is used to close the potential $2 billion gap, it leaves a remaining gap of $790 million. There are many ways the State can make up this gap, including using more non-recurring or “one-shot” revenues, asking for additional federal aid, increasing State revenues through new or additional State taxes and/or fees, and reducing the State workforce beyond the 5,000 reduction anticipated in the SFY2002-03 budget. It is also possible, but less likely, that Medicaid costs could be cut or that school aid could be reduced.

There are, however, several possible “one-shots” revenue strategies that can raise significant money including:

It is possible that the State will open up the early retirement incentive to more employees in order to reduce the State workforce by more than 5,000 employees. It is likely that DOB will soon adjust all agencies’ cash ceilings from the cash ceilings set in May/June which would clearly exacerbate current short-staffing problems and difficulties in filling vacant positions. However, it should be noted that reducing the State workforce does not save significant money. The State would save between $53.7 million and $67.5 million annually for every 1,000 full-time employees that are cut from the State workforce. These savings would be offset by the cost of the early retirement incentive that has been used to reduce the workforce over the last year. According to the Office of the State Comptroller, the State only saves 88% of an employee’s salary for five years if they receive the current early retirement incentive. The retirement system absorbs and amortizes the cost of the 55/25 retirement benefit for all Tier 2, 3, and 4 employees who leave State service under this temporary benefit. However, it is expected that only a few hundred of the 3,622 State employees eligible to leave State service under this program will leave. Therefore, the State only saves between $47.26 million and $59.4 million annually for every 1,000 full-time employees that are cut from the State workforce through the current early retirement incentive.

Next week we will examine economically sensible suggestions for dealing with this year’s and next year’s budget gaps.