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Explanation and Cost of Mediator's Proposal

April 17, 2003

This is an explanation and calculation concerning the financial impact of the two wage offers mentioned in the mediator's proposal.

Explanations and Calculations for both Mediator wage proposals

Proposal #1

• 1% "Cost of Living" effective 11/01/01 NO Step/Merits
• 1.5% "Cost of Living" effective 10/01/02 NO Step/Merits
• Equals = 2.5% for all clericals in the bargaining unit as of the date the contract is ratified

Retroactive payments will be for only 11 months for year 1 (2001-2002) and only for those still in the bargaining unit on the date of ratification.

Retroactive payments for year 2 will be for 12 months (2002-2003) and will cover the period from 10/1/02 until the increase is reflected in the monthly pay rate for each clerical.

Calculations of total payroll costs to UC for this proposal:

2001-2002
$ 39,037,071	Total monthly cost to UC
× .01	COLA
$ 390,371	Cost per month
× 11	No. of months
$ 4,294,078	Yearly cost of increase
$ 43,331,149	Total payroll cost to UC for 1 year

2002-2003
$ 43,331,149	Total monthly cost to UC
× .015	COLA
$ 649,967	Cost per month
× 12	No. of months
$ 7,799,604	Yearly cost of increase
$ 51,130,753	Total monthly payroll cost to UC after #1 wage increases

Proposal #2

• 1% Lump sum payment for period 11/01/01 - 9/30/02 (NOT base building; taxed at higher rate and sum is for only 11 months)
• 1% "Cost of Living" effective 10/01/02
• 1/2 Step Merit for those who are step/merit eligible effective 10/01/02.

2001-2002
$ 39,037,071	Total monthly cost to UC
× .01	% Lump sum amount
$ 390,370	Cost per month
× 11	No. of months
$ 4,294,078	Cost for one year
$ 43,331,149	Cost for 2001-2002 Only (is not base building)

2002-2003
$ 39,037,071	Total monthly cost to UC
× .01	% COLA
$ 390,371	Cost per month
× 12	No. of months
$ 4,684,4522	Total additional cost per month
$ 43,721,523	Total cost per year for entire bargaining unit
$ 43,721,523	Total cost per year
× .70	% of unit eligible for Merits *
$ 30,605,066	Initial cost of 70% of salary for unit
× .025	% of Merit increase **
$ 765,127	Increased cost per month of merits
$ 44,486,650	Total monthly payroll cost to UC after #2 wage increases

Total UC Monthly Costs per proposal
Proposal #1	$ 51,130,753
Proposal #2	$ 44,486,650
Cost difference	$ 6,644,103 Savings to UC by adopting #2

**Steps are no longer a full 5%. They vary between 4.3% and 4.8%. This calculation is to give a general idea and is based on a pattern in which everyone who gets a merit gets a 2.5% increase. UC will actually save additional money because the increases will be somewhat lower than the 2.5% figure.