EXCLUSIVE: Settlement with union over private-sector contracts could cost millions

EXCLUSIVE: Settlement with union over private-sector contracts could cost millions
Published: Oct. 19, 2015 at 9:49 PM HST|Updated: Oct. 19, 2015 at 10:09 PM HST
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HONOLULU (HawaiiNewsNow) - State officials have ruled work covered by at least 99 private contracts -- to handle everything from groundskeeping to pest control -- needs to be carried out by state employees, a move that could cost taxpayers millions and create hundreds of new state jobs.

The United Public Workers union filed grievances in 2007 and a prohibited practices complaint in 2009, complaining that the state unlawfully privatized services that historically had been performed by unionized workers, such as grounds keeping along state highways.

The state settled the cases with the union in July. As part of the settlement, the state agreed not to automatically extend private contracts and start transitioning many of the jobs in question to state employment.

"Other counties actually have agreements like this in order to comply. We're the last jurisdiction to do that," said Gov. David Ige's Chief of Staff Mike McCartney. "And this is our agreement with them to do that to avoid litigation and to work in good faith."

McCartney said the state is reviewing at least 506 contracts across 12 state departments, which hire private workers to do everything from highway groundskeeping to air conditioning maintenance, as it decides how many of those jobs will be handled by state workers instead.

"How do we deliver effective services to the public and how do we honor the agreements that are in the law that talk about public employees being in civil service?" said McCartney, who has worked for the state public school teachers' union and as the head of the state human resources department.

The private contracts that could end and be replaced by state employees in the next few years are for work such as janitorial, plumbing, tree trimming, auto repair, painting, carpentry and electrical.

Over the next few years, the state may need to create hundreds of new jobs, costing taxpayers millions.

But McCartney isn't offering cost estimates yet.

"It's too early to say what we do, but at least have it in place and we're starting to look at government in a little different way," McCartney said.

One example of converting from contractors to state employees at the University of Hawaii at Hilo offers a look at the potential costs.

Switching from private security guards at UH-Hilo to 37 full-time state employees will cost roughly $700,000 more a year -- counting fringe benefits. That's about a 37 percent increase, just at that one campus.

The state's decision to transition at least 99 of the 506 contracts currently filled by private workers means departments will have to ask lawmakers for money to fund the positions. The state will also need to recruit and hire people for those new jobs.

Most of the affected jobs are blue-collar positions represented by UPW, which as of last year represented about 4,959 blue collar state employees, nearly 10 percent of the state government workforce.

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