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March 26, 2014 THE VILLADOM TIMES I • Page 7
Franklin Lakes
Two percent cap on arbitration awards may expire
by Frank J. McMahon
Members of the Franklin Lakes Council are concerned
that the state law that capped arbitration awards at two per-
cent is due to expire on April 1.
The law, which Governor Chris Christie signed in
December of 2010, reformed the arbitration process as of
Jan. 1, 2011.
The borough council has passed a resolution calling on
state legislators to permanently extend the two percent cap
on interest arbitration awards prior to the April 1 sunset of
that law, and Senator Dawn Marie Addiego (R-8 - Atlantic
Burlington & Camden) responded by introducing Senate
Bill 1814 on March 17. That bill, which would establish a
permanent police and fire interest arbitration cap, is cur-
rently being reviewed by Senate attorneys. It is not clear
if that will be the final bill, or when the Senate may vote
on it.
Al Barlas, the chief of staff for Senator Kevin O’Toole
(R40 -Bergen/Essex), said O’Toole supports that legisla-
tion and has made the following statement: “The potential
ramifications of this legislation sun setting could be cata-
strophic to our municipalities. I have heard from many of
my mayors and police unions with their concerns on this
matter and I have had conversations with the Senate Presi-
dent about the need to pass legislation that would not allow
binding arbitration reform to sunset.
“This was a cornerstone of Governor Christie’s tool kit
for property tax relief, and I am committed to working with
the Senate leadership and the Governor’s office to get this
legislation passed prior to April 1.”
The original law contained reforms that capped arbi-
tration awards to police departments on economic factors
to no more than two percent. The law also provided for
random selection of arbitrators, expedited the determina-
tion of awards, required the arbitrator to provide a written
report detailing the weight accorded to each of the required
considerations, and expedited the appeal process.
“These reforms marked a dramatic change to the arbi-
tration process and have helped municipalities to control
the never-ending rise in public safety personnel costs,” the
borough’s resolution states.
“While municipalities are statutorily limited to raise
their property tax levy by no more than two percent with
very limited exceptions,” the resolution continues, “failure
to extend the two percent cap on interest arbitration awards
will force municipalities throughout the state to further
reduce, or even eliminate, crucial services, personnel, and
long-overdue infrastructure improvement projects in order
to fund an arbitration award.”
The borough council pointed out that the two percent
interest arbitration cap has controlled public safety salaries,
which are one of the largest municipal expenses, not only
through arbitration awards but through contract negotia-
tions and, absent further action by the state legislature, any
contract that expires on or after April 1, 2014 will be sub-
ject to all new procedures and requirements, except the two
percent award cap.
School district announces meeting
Meet and speak with the consultants working with the
Ramapo Indian Hills Board of Education on the selection of
a new superintendent of schools. A meeting for the school
district’s parents and the community at large is scheduled
for March 26 at 7 p.m. at the Indian Hills High school audi-
torium at 131 Yawpo Avenue in Oakland.
“Without those limits,” the council claims, “arbitrators
will be able to impose awards that do not account for the
two percent limit on the property tax levy, which would
immediately threaten funding for all other municipal ser-
vices.” The council also claims that the two percent cap on a
municipality’s property tax levy will force local budget
makers to reduce other essential municipal services to fund
an arbitration award higher than two percent.
The current contract between the borough and the
Policemen’s Benevolent Association Local 150 covered
2012, 2013, and 2014 and will expire Dec. 31.
During the period of that contract, police officers who
were no longer in the “step” schedule, which extends to
year eight of their employment, received a one percent
salary increase in each of the three years; police officers on
the step schedule received just the step increase each year;
and the step schedule was elongated so it affected salary
increases every 18 months instead of the previous schedule,
which was for 12 months.
At the end of this contract, the salary steps for all police
officers with less than eight years of service will return to
12 month intervals.
The step schedule provides each police officer with an
automatic increase in salary each year until they reach the
maximum in the step schedule at year eight. Any percent-
age increases agreed to in their contract are in addition to
the step schedule salary increases.