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Mr. Duco – Deputy Director – State of Ohio, received the 2009 Pacesetter Award. He was the chief negotiator for 2009 negotiations for 5 separate unions representing state of Ohio employees. Due to the fall of the economy, the State’s budgetary picture was bleak. Mr. Duco’s superior negotiating skills, in conjunction with his ability to bring management and unions together, resulted in concessionary agreements that satisfied the interests of all parties.
For the first time, the state had entered into Interest Based Bargaining. In order to convince the unions of the dire budgetary situation, and convince them that without concessions many layoffs would follow, Mr. Duco provided a variety of informative daily presentations. Mr. Duco also approached negotiations from the perspective that everyone was going to share the pain, union and management alike. Mr. Duco negotiated “Cost Savings Days,” which is essentially a form of furlough but applied in a manner that has a less detrimental impact. State employee pay is reduced by an amount equal to 3.076 hours per pay period in return for 80 hours of cost savings days to use throughout the year. Basically, each employee is funding his/her own 80 hours of time off in exchange for the reduction in pay. That reduction is spread out over the entire fiscal year which allows the employee to better manage his/her finances.
Mr. Duco managed to achieve further savings through a two year freeze of step increases as well as a two year freeze on personal leave accrual and conversions. Through outstanding labor management communications, Mr. Duco assured the employees that the concessions were only temporary in nature and that the cost savings days, step freezes and personal leave freezes will all be lifted in 2011.
Cost savings days were achieved in negotiations with all five unions representing state employees, saving the State of Ohio approximately $238 million in the first two years of the agreements. These cost savings days were also included in parity for exempt employees through changes to the Ohio Revised and Administrative Codes resulting in further savings to the State of Ohio to the tune of $149 million over the same two year period. The CSD approach was so innovative and palatable to employees that multiple elected officials also adopted the concept in their own collective bargaining agreements. Moreover, the state’s approach to cost saving in this economic environment has paved the way for many cities and counties in Ohio to approach collective bargaining negotiations with innovative solutions to a very significant problem.
The cost savings day approach has been an extremely effective tool. Not only does the state see significant savings, it is a more palatable solution for employees. This tool is both innovative in its contract language and unique in its approach to addressing the problem.
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