Town and Union Think ‘Outside the Box’ in Contract Talks

Town Supervisor Ken Schmitt and Councilman John Lupinacci Credits: Bob Dumas

MAHOPAC, N.Y.— The town of Carmel has come to a contract agreement with one of its police unions—the Lieutenants Benevolent Association—which provides 2-percent annual salary increases retroactive to January 2017 and carries them through the end of contract in December 2023.

Currently, there is only one lieutenant in the Carmel Police Department—John Dearman.

Dearman and members of the Town Board did a little outside-the-box thinking to find ways to potentially increase the lieutenant’s salary beyond the negotiated annual pay hikes.

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The contract includes a clause wherein the lieutenant could receive a wage supplement based on the amount of mortgage tax revenue the town receives. The contract states that effective April 2018 (and based on 2017 mortgage tax revenue results) and for the remainder of the contract, should the town receive a $200,000 increase from the prior year’s mortgage tax revenue benchmark, the lieutenant would receive a 0.25 percent salary increase in the base pay rate. That increase would become effective on April 15 of the following year.

The benchmark is set at $200,000 greater than the town’s prior year’s mortgage tax revenue, except in years where the mortgage tax revenue goes down from the prior year. In a “down year,” the subsequent benchmark is set at $200,000 more than the highest mortgage tax revenue year in the prior two years.

Lupinacci said such innovative solutions were employed because the Town Board has been under public pressure to get its union contracts approved so he’s been trying to find creative ways to deal with salary demands while coping with the state-mandated tax cap.

“The tax cap was imposed to control our costs, so we needed to ask our employees to come in with lower wage requests and to contribute to health care cost,” Lupinacci said.

But, Lupinacci said, if employees are being asked to take a lower pay increase, what happens when the economy improves and mortgage tax revenues begin to rise? Consequently, they developed a formula that doles out salary increases (on top of the raises already negotiated) should mortgage tax revenue increase by the benchmarked amount.

“It’s almost like a profit-sharing in the private sector,” Lupinacci said. “We started thinking outside the box and came up with this concept. Because of pressure from the public we tried to get creative to get this [contract] done.”

Dearman gave Lupinacci credit for coming up with the idea.

“When he proposed it, I thought it would take quite a jump in the housing market [to kick in the mortgage tax revenue raise], but our negotiations were still quick and easy,” he said. “Now, if the town is doing better, you get a little bump [in salary]. We have [negotiated] a different way to get a different solution. We had talked about it a lot and tried to think of different solutions to different problems rather than the typical way of negotiating: banging heads together till someone gives in. I am very satisfied with it.”

Lupinacci said that the mortgage tax revenue tax supplement is also being written into the recently completed deal with the IBA—the teamsters who represent the town’s highway workers. It has also been put on the table for the town’s current contract talks with the PBA—the police officers’ union.

The new contract also calls for the lieutenant to contribute to the health benefits package. In 2017, the contribution will be 14.5 percent; 16.5 percent in 2018; 18.5 percent in 2019; and 20 percent in 2020.

Lupinacci praised Dearman for negotiating in good faith and being flexible on the healthcare contributions.

“He agreed to raise it up to 20 percent [in 2020] and that is very commendable to the lieutenant,” he said. “We were both on the same wavelength. If you look at the deal, it’s very fair for both  parties; it’s good for the lieutenant and it’s good for the town.”

The contract also includes a cap on overtime hours, which increase from 150 hours in 2017 to 240 hours in 2020.

The LBA contract ended Dec. 31, but Lupinacci said they already had a deal in principal by the holidays.

“Logistically, the process took time but was basically we agreed to it months ago,” he said.

Lupinacci said that if any more lieutenants join the force either through promotion or new hires, they would be subject to the same contract.

“It’s such a fair and balanced agreement that we can keep it [for future lieutenants],” he said.

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