Summary of the LaborManagement Situation On June 30, 2007, the three-year labor agreement between Louisville/Jefferson County Metro

Government (management, hereafter called Metro) and the River City Fraternal Order of Police Lodge # 614 (the union, hereafter called FOP) expired. As contract negotiations began on March 30, 2007, the atmosphere between the FOP and Metro might be described as cordial, but tense, and far more tense than past negotiations in recent memory. The FOP, with 1,175 members in the bargaining unit, was the largest of 27 bargaining units recognized by Metro government, and thus the negotiations would be closely watched by all the other unions as well as nonunion employees. The officers and sergeants represented by the FOP believed they had taken a step backward in the last negotiationthe first since the merger of city and county governments and thus the first since the merger of the former city and county FOP Lodges. Both sides anticipated a difficult negotiation process, and thus they added new negotiators to their teams. Although the current collective bargaining agreement (Art. 6, Sec. 3) as well as state law provided a no-strike situation for the FOP, the FOP members, like many police departments, enjoyed a high level of public support, which helped level the playing field, or provided negotiating leverage, between the two sides. The FOP hoped to gain increases that would make up for lost buying power realized over the past three years of low negotiated annual increases. The FOP has historically demanded a traditional, distributive bargaining process at the table, and it has resisted past attempts at two-tier wage increases or benefits because of a strong sense of solidarity and equity among the members. When pressured by Metro, the FOP has appealed for, and often received, at least moderate public support. State law requires that the Metro Government operate each year with a balanced budget, and both sides realize that Metros tax revenues have been flat and even experienced a decline of about 2 percent in recent months because of local and national economic conditions. Over the past 20 years, Metro revenues averaged 4 percent very consistently, but the stagnant national economy caused an unexpected $9 million shortfall in the current years revenues that led to a hiring freeze and midyear budget cuts in all departments, as well as the possibility of employee layoffs. Members of the FOP, however, were not subject to layoff because the current contract contains a no-layoff clause. In 2003, during the first round of labor negotiations as a new merged government, Metro adopted a formula for determining the annual pay increase to propose to bargaining groups. The initial contract with the FOP and all other contracts settled by Metro with its labor unions had the formula increase: a percentage increase equal to half of the percentage increase in tax revenue with a guaranteed 2 percent, which is the same as Article 24, Section 2, 3 of the expiring FOP contract.