Pension plan key to new USFilter pact
Union for water company wants to keep benefit that non-union USFilter employees lost

By Scott Olson
IBJ Reporter

Potentially contentious contract talks between the union representing 200 USFilter Indianapolis Water employees and the utility's management begin Nov. 18, giving negotiators six weeks to hammer out a deal.

"We're not coming out of [the talks] without a defined pension," said Robert Reed, president of the National Conference of Firemen and Oilers Local No. 131. "That is going to be the stickler in our benefits."

The pension plan became a lightning rod for water company employees after the city bought the utility from Merrillville-based NiSource Inc. in March 2002 for $515 million. The city then awarded a 20-year, $1.08 billion management package to USFilter Corp.

The loss of the pension is at the crux of a federal lawsuit brought by non-union employees who allege their benefits have diminished as a result of the city's purchase.

Tim Hewitt, president and operations manager of USFilter Indianapolis Water, expects the issue to surface during talks to renew the contract that expires Dec. 31.

"I'm certain it will come up," he said. "I think anything's a possibility. We don't want to negotiate in the press. These are matters that need to be discussed at the table."

USFilter Indianapolis Water inherited the current contract from the former IWC Resources Inc., the holding company for the old Indianapolis Water Co.

The two sides have scheduled nine bargaining sessions, if needed. The last time water company employees walked out on strike was in 1975.

If the two sides can’t reach an agreement, a 60-day “rider” prevents workers from striking until March 1. Although Reed, a 27-year employee with the company, doubts that will happen, he expects the talks to be the “most contentious” in his tenure because of the new regime.

"I've kindly conveyed to the company that I'm optimistic," he said. "But nevertheless, I feel we're going to face some tough times when we get to the economics [of the contract]."

The task of negotiating will fall on Hewitt and on Tom Zabor, the company's new labor relations director brought on board by Hewitt. The two men worked together at the former Indiana Gas Co. before parent Indiana Energy Inc. merged with the Southern Indiana Gas & Electric Co. in Evansville to form Vectren Corp.

Hewitt, who had been president and CEO of Indiana Gas before the merger, started his job at the water company June 9. He quickly introduced himself to union leaders, he said.

"USFilter valued my background, in particular, with labor unions," Hewitt said. "This is nothing new to me. Both [Zabor] and I have negotiated a lot with unions over the last 13 or 14 years."

The union also seeks a wage increase, though Reed declined to divulge how much. Reed also said the union will be looking at medical insurance and vacation benefits it fears could be reduced or lost.

In their lawsuit, non-union employees claim they have a less valuable health insurance plan and their vacation days have been reduced. The city has moved to dismiss the complaint.

Another suit filed against the city on behalf of local taxpayers claims its purchase of the water utility violates the Unigov statute. The taxpayers argue management of the utility should have been placed under the same public charitable trust that operates Citizens Gas & Coke Utility. The city also has moved to dismiss that suit.

Although the city owns the water company, no one in local government will be involved in contract talks. Sam Odle, president of the Indianapolis Board of Waterworks, which governs the utility for the city, said he has confidence in Hewitt, the utility’s management team and its employees to get a contract ratified.

"It's an issue for them to work out,"he said.

The water company's 50 office and clerical workers became unionized last year under Service Employees International. Their contract began in January and runs until December 2005.

California-based USFilter has a number of agreements with unions across the country, most of which have been negotiated with little trouble, company spokesman Scott Edwards said.

But, he said: "This one might be different. I donít know."