Chapter 8. Preparing for Bankruptcy - 1985

January Negotiating for Purchased Medical Services.................. 417

March Attendance & Punctuality............................................. 418

April Union Considers Financial Woes................................... 430

May Negotiations & Union Elections.................................... 437

June Management's Negotiation Team in Trouble.................. 444

July Negotiations, Stewards, Committees But El Rio Hurts... 452

August El Rio Failing................................................................. 459

September Lay Offs and a New Administration............................... 473

October Major Union Activist Leaves El Rio.............................. 479

November Planning to Reverse Deficit........................................... 482

December Serious Reorganization Begins...................................... 489

Chapter 8. Preparing for Bankruptcy - 1985

January 1985 - Negotiating for Purchased Medical Services

January 7, 1985

Memo from Planner I

In a band-aid approach to the huge problem of outside medical service bills, El Rio hired a Planner to negotiation new arrangements. In the months that El Rio employed the Planner, relatively few agreements were made. By this time, however, the Planner reported that contracts had been established with two new providers of purchased medical services.

January 17, 1985

Memo from Planner I

Eight new contract agreements with outside providers of medical services had been negotiated.

March 1985 - Attendance and Punctuality.

March 1985

Preparing for Renegotiation

Employees prepare by selecting a new Negotiations Committee and through a series of meetings and newsletter reports.

About this time marks the end of Juris Poncius' employment at El Rio.

March 6, 1985

Memo from James R. Powers, Interim Executive Director to All NHC Employees, Subject: Attendance and Punctuality

Powers, who had been acting Marketing Director after Snyder left El Rio in 1983, now served as the Interim Executive Director. Very little is known about him, except that for about three or four years he worked at El Rio as an administrator doing an assortment of odd administrative jobs. He had no known connection with either the original neighborhood or the original goals and dreams that gave birth to El Rio.

To secure employee compliance with the attendance and punctuality policy of the clinic, Powers issued a nine-page memo. The policies governing attendance and punctuality had been determined unilaterally, without consulting the union. The first page of Powers' memo read:

"Effective Monday, March 11, 1985, the attached Attendance and Punctuality Policy will be strictly enforced. These policies have been in the El Rio Personnel files and have been presented in Memo form on previous occasions. Previously, they have either not been enforced or have not been enforced equally between all departments. Please read this material carefully so that you again understand these policies. Each morning there will be an announcement on the Public Address System indicating it is 8 a.m."

Subsequent pages dealt with the procedures for filling out time sheets and penalties.

The union expressed its dissatisfaction about the manner in which management handled this issue.

Attendance and punctuality were not problems with most employees so the pursuit of such an issue, when very real problems existed, appeared almost comical. The administrators should be focusing on the very real and serious financial problems facing El Rio.

Management established a Labor/Management Time Clock Committee as part of their strategy. Two members from the union, Josie Guerena and Ethel Larsen, served on the committee. Guerena, the payroll clerk, supported the concept while Larsen had reservations about the use of time clocks. The committee did not have an opportunity to complete its task before being disbanded, without the institution of time clocks, and before recommendations could be made.

Early in his temporary reign as Executive Director, Powers informed employees that he had an "open door" policy. Guerena remembered Power's open door as always being closed.

March 7, 1985

Employees elected their representatives to sit at the next negotiations.

March 8, 1985

Memo from James Powers, Interim Executive Director to Mary Lou Gonzales, Chair

"I hope you are aware Mary Lou that I am available to discuss or meet with you regarding any issues you believe should have my attention. I trust you have no hesitancy in arranging meetings with me to discuss problems and potential problems. I do have an 'open door' policy.

While problems and concerns are addressed on a day-to day basis, I believe it would be helpful to have periodic meetings in which we can focus on issues which are beyond the day-to-day concerns. The Labor/Management Contract [Article II] calls for 'special conferences' to be held quarterly. I propose that we have a quarterly special conference at the end of March or very early in April 1985.

I suggest we focus on a single issue which challenges the entire El Rio corporation. One such challenge is:

Creative and cooperative approaches between labor and management to improve El Rio's public image.

If this topic is acceptable, I would like to meet with you to determine a time, date and format for such a meeting. A structured pooling of ideas and resources on corporate challenges may produce some dynamic results.

Memo from Powers to All NHC Employees, Subject Attendance and Punctuality

Two days before Powers reached out to the union Chair with an offer to discuss any issue, he unilaterally had put out the "Attendance and Punctuality" policy that ". . . will be strictly enforced." This memo served to undermine his credibility.

Special Notice - from Mary Lou Gonzales, El Rio Division Chair to Union Membership.

"The labor representatives of the Time Clock Committee [Josie Guerena and Ethel Larsen] were notified yesterday that there will not be time clocks, however, a new policy governing attendance and punctuality may be implemented."

March 10, 1985

Memo from Ethel Larsen to Steve Lord, New Accounting Manager

This memo came with a nine-page attachment that listed 48 physicians and medical providers with which we had outside arrangements, their address and phone numbers, a contact person, El Rio codes, whether or not the physicians accepted Medicare assignment, any discounts or contracts we may have had with them and any other specialized information. This did not include the recently negotiated arrangements by the Planner in January. The memo read:

"Attached are the drafts of discount listing by both professional corporations and physicians. They need to be carefully reviewed for (1) accuracy, (2) completeness, and (3) layout.

In terms of layout, an attempt was made to confine information [for each physician] within a 3x5 card . . .

I welcome constructive criticism from the staff on making the discount listing most effective." Steve Lord, a soft spoken middle-aged man, had been the accountant that Larsen had originally replaced in 1976. Because of illness, Lord would stay only a short time at El Rio.

Management Meeting

Jim Powers reported that at the Friday afternoon meeting with union leaders, the subjects discussed included Memorandum of Understandings, physician contracts, the probationary period and special conferences to be held quarterly.

Powers informed the managers that a Director of Planning had been appointed. This Director would coordinate staff members willing to work directly with the Board of Directors to explore all aspects of a possible move to Kino Hospital [from St. Mary's Hospital].

Powers and the Director of Planning indicated that there might be two potential supplemental funding sources for the El Rio home health program. The two were the Federal Region IX and Blue Cross/Blue Shield.

The Director of Planning reported that he expected contract negotiations governing the university obstetrics and gynecology physicians to be completed in the near future.

The new Director of Finance pointed out that the computer consultant awaited further directions from El Rio. Regional computer funding would be ascertained that week. Since the termination of Hugh Young in 1979, the Data Processing Department had been the private preserve of one man at El Rio who controlled the main frame system. That had to end if this vital aspect of the clinic could function well again. This critical area remained a victim of the earlier conflicts until the smaller but very powerful table top computers came to El Rio and provided new, exciting options not available before.

The community relations person talked about a training program which focused on positive ways for staff to interact with patients/customers, an old concern. Interestingly, management's concern about poor relations with patients involved a department which had little or no union members. Those two areas included the phone operators and the registration desk.

The Director of Nursing indicated a need for time lines and details regarding X-ray and Lab renovations.

March 11, 1985

Minutes of theUnion Negotiations Committee

Mary Lou Gonzales welcomed the committee members and stated that the union's proposals on changes, additions or deletions to the contract must be submitted by April 1, 1985. That left only three weeks to explore any problems and put together the union proposals.

Three items were suggested for discussion:

1. The election of a Chair for the Negotiation Committee.

2. Review of suggestions to contract changes submitted by the union staff.

3. Presentation to the membership at tomorrow's union meeting.

The Negotiation Committee elected Mary Lou Gonzales as their Chair with the responsibility to insure all facets of the committee performed properly. The chief negotiator had to be selected, the other members of the committee needed to be elected, and the amendments to the contract had to be determined. The chief negotiator would present the union's positions at the negotiation sessions.

Frank Tilford reviewed the staff's list of recommendations. They were accepted and the committee added three new items to the list. The additions were to develop language around extended hours, cost of living adjustments and promotional opportunities limited by one year clause.

The negotiation committee would solicit additional input from the membership at the next day's meeting.

Two more union meetings were scheduled for March 19 and March 26.

March 18, 1985

Union Newsletter

The employees were informed about who served on this year's committee and the limitations of this year's negotiations.

"Negotiations this spring will only be addressing issues that we have found to be a problem that need to be clarified in the contract. It is important that members bring problem areas to our attention. The full agreement will be renegotiated May 1987.

Issues that are being considered for negotiations

Extended Hours

Within the contract extended hours are not addressed. With the initiation of extended hours, many problems have become evident which need to be addressed.

Discipline

Our stewards have had to deal with problems arising out of disciplinary action. We need contract language that provides progressive discipline. There should be a time limit for reprimands on employee's records.

Benefits

There have been problems of matriculation vs. non-matriculation that have frustrated members' attempts to utilize appropriate education leave. Management has proposed policy changes that impact sick leave and punctuality. These need to be addressed. At union membership meetings last fall, employees expressed interest in obtaining legal-care benefits. There needs to be an extension of the Career Ladder deadline.

Disability and on the Job Injury

Problems have arisen involving protecting the interests of employees suffering on the job injuries and in having adequate disability coverage.

Contracting Outside Services

Contracting of outside services effect the integrity of the bargaining unit and therefore need to be addressed. Restrictions on new contracts must be discussed and approved by affected bargaining unit members.

Newer Employees

Because of potential abuses, we need to define the probationary period for temporary employees who become permanent. Also, problems have arisen that suggest that there needs to be greater opportunities for promotion for newer employees.

Adequate Compensation

Problems have occurred involving employees asked to perform in higher classifications without adequate compensation. Also, there is a need to establish contract language to protect current practices involving compensation to providers for additional work. In addition, there is ambiguous language within the contract protecting the 1.2% increase for employees in grades I thru VI, step 9. There is a need to maintain a Cost of Living Adjustment (COLA).

Staffing Patterns

Mid-Levels and Family Health Workers require adequate staffing levels. Mid-Level positions need to be maintained."

The employees also received a schedule of meetings which also pointed out that the union's proposals needed to be turned into management by Friday, March 29.

An update of three Labor/Management Committees: Health & Safety, Career Ladder and Time-Clock said:

"Health & Safety Committee

The committee has been actively working on programs that enhance work site safety and health. Recently, they have developed protocols for fire escape routes and practice for out South Park and North Stone work sites. They have also established guidelines for the regular inspection of equipment. In addition, the committee has plans for renovation of the shower in the laboratory area.

Career Ladder

Members [of the committee from the union] attended a Career Ladder workshop at Pima College. Because, the workshop dealt with individuals entering at entry level positions, the committee did not feel the workshop was applicable to our situation. It is expected that the career ladder will be active once negotiations are completed.

Time-Clock Committee

The union members of the time-clock committee were informed of the sick leave and punctuality policy the day prior to notification of the employees at the monthly staff meeting. There are serious concerns about these policies which are now being pursued by our union staff and by the negotiation's committee.

March 20, 1985

Annual Meeting of the Board of Directors

All the previous conflicts and interests in the activities of the board seemed absent in the employees. Employees, who had been at El Rio longer, were tired from the conflicts and the people sitting on the board increasingly appeared employee friendly. So, even though the union strongly recommended employees attend the annual meeting, interest had waned and few if any employees did go to this meeting.

March 25, 1985

Union Newsletter

The union learned that the question of "contracting out" would be brought up at the next negotiations.

"...Language modifying management's right to subcontract for services not provided by the center."

Public employees throughout the nation began to bitterly battle "contracting out," which is taking whole departments and giving contracts to independent firms to supply services. At El Rio, management wanted to "contract out" janitorial services. This meant the loss of all the maintenance jobs from the union. Additionally, those employees would probably be laid off.

The issues the union brought to the negotiations were:

"...Proposals for cost of living wage increases, modifying language dealing with evaluations, continuation of a longevity bonus, maintaining 1.2% benefit for effected employees, extensions of career ladder implementation and midlevel concerns."

"...improved educational training benefits."

"...Midlevel/Medical Director monthly meetings."

"...provider overload and physician/midlevel collaboration."

"...Work in higher classification, strengthen objectives of job audits, language for shift changes and clarify 'other duties' in job descriptions."

"...New language making evaluations grievable."

"...progressive discipline, periodical purging of reprimands, protection of legitimate sick leave and tardiness and signing off on all disciplinary actions."

"...Expanding new employees' opportunities for advancement."

"...Delineates transitional period to permanent status for temporary employees."

Other changes involved making sections in the contract more readable and understandable.

Several copies of the union's proposed alterations were made available at the union meeting. Additionally, all members of the Negotiation Committee received copies of the proposed alterations so that other employees could be encouraged to read and consider them. The full union membership had a chance, after considering the proposed changes, to vote on whether or not to submit them to management.

On March 28 the proposals were submitted to management.

March 29, 1985

Remarks of James G. Schmitz of AFSCME International entitled "The Health Care Delivery System in Turmoil: Effects on the Labor-Management Relationship"

At a Labor Management Conference given in Tucson, one of the growing issues involved problems surrounding health care policy. At this conference, AFSCME's field representative presented a paper that gave a union perspective. In this paper, he pointed out that double digit inflation adversely affected health care costs in all the United States, with Arizona close to the top in terms of inflation rates.

"In 1983, Americans spent $355 billion on health care services. This amounts to almost 11 percent of the total U.S. gross national product (GNP). This translates to an average annual expenditure of $1,459 for every man, woman, and child in the U.S."

The paper went on to explore the "culprits"

High on his list of culprits were the physicians who, according to this paper, averaged $100,000 a year in salary and acted as consumers in that they were the ones that ordered the tests and surgeries and procedures. El Rio physicians, however, generally made less than half that amount even though many had excellent skills and understanding of medicine. Often, the El Rio physician did not accept the lower pay and onerous rules for long and left employment at El Rio. El Rio had a high rate of physician turn over. But many fine and capable physicians also stayed on precisely because they wanted to service a population with serious needs. Some probably stayed on because they too believed in the original dream.

The AFSCME paper went on and charged hospitals as the other culprits. It pointed out that many surgical procedures were performed although their need appeared questionable. El Rio had developed a rather stringent utilization review process which the physicians and some patients bitterly fought. But those restrictions, in some cases, did reduce unnecessary surgeries. HMOs were to be brought forth as the solution to a whole host of problems. Unfortunately, while it solved some, it also created new problems. The emerging problems at El Rio and with all HMOs were that needed and appropriate procedures were increasingly in jeopardy.

Another problem causing hospital rates to soar involved the proliferation of expensive medical technology. Arizona ranked fifth in the nation in terms of hospital costs.

While the rise in health care costs adversely affected public employees who were represented by AFSCME, they also adversely affected all other unions throughout the country. Health care benefits were increasingly becoming an issue.

Saturday, March 30, 1985

Annual Meeting of Board of Directors at St. Margaret's Hall

Few employees attended.

April 1985 - Union Considers Financial Woes

April 1, 1985

Memo from Steve Lord, Accounting Manager, to Computer Supervisor

Lord appeared visibly upset. He had personally processed a claim earlier and it had not shown up on the computer report. Even though Larsen no longer suffered abuse, some administrators still believed that she remained responsible for problems relating to payment for purchased medical services. As time passed, a growing understanding of the real problems arose.

April 15, 1985

Renegotiating Questionnaire.

"The union has presented a package of proposals to management on March 28th. The language presented in the proposals involved issues raised by the membership at general membership meetings, discussions with members of the Negotiation Committee and advice from AFSCME staff. Re-negotiation of the issues is expected to begin in June. The Negotiation Committee must now focus on how too most effectively negotiate the package. As part of that preparation, the following questionnaire has been prepared to give guidance on the relative importance to the membership of the issues raised."

The questionnaire had two parts. One dealt with "economic issues." Employees were reminded about the dire financial situation of the clinic. The other section dealt with issues that were predominately non economic in nature. The results of the questionnaire were as follows:

"On the economic issues the higher numbers indicate that the employees had a stronger desire to see a favorable resolution of that issue. Conversely, the lower number suggests a weaker interest in the issue.

Cost of Living Adjustment (COLA) = 69

Compensation issues for work in a higher classification = 54

Leaves - Extended definition of 'family' = 42

Evaluations - Delete 'excellent' for increased wages. = 40

Longevity Bonus and Step 9 Bonus = 39

Add holiday 'Rodeo Day'. = 31

On the issues with less of an economic impact, the ranking was:

Job protection for job related disabilities = 52

Career Ladder = 51

Staffing Patterns-Provisions for adequate staffing

levels in some areas. = 50

Entry Level Qualifications Recognized = 49

Education benefits revised and extended = 49

Appropriate staffing for night clinic = 49

Compensation for non-voluntary shift splits = 47

Compensation for work in unfavorable hours = 47

Working Conditions = 45

Protection of legitimate sick leave and tardiness. = 45

Protection Against Contracting Out = 44

Socially Responsible Investment of Retirement Funds. = 44

Language involving reclassification strengthened = 44

Protection against unilateral transfers = 39

Extend "Leaves Without Pay" = 37

Group Legal-Care Benefits = 35

Study of child care facility development = 33

Work in a higher classification-language enabling

LPNs to be compensated. = 32

Union Newsletter

The newsletter carried three items. The first item pointed out the upcoming union nominations on April 17. The second item involved a report from the Health and Safety Committee, now known as the Occupational Health Committee, and the third told about a Labor-Management Conference which had been held in Tucson on March 26 through the 28. The second two articles are presented here:

"Report of Occupational Health Committee

Chairperson Zora Zemsky is very pleased with the dedication, commitment, and hard work of the committee. Administration has addressed each issue and has been most cooperative in working with this joint Labor-Management Committee. New rugs are to be installed in Suite 1 and Suite 2 areas. The committee is looking at the banning of smoking in the clinic. It is looking at what other clinics have done. Cigna offers Nicorrettes free to their employees as well as an educational counseling program. The daytime custodian has certainly been a great help in making our work place a safe and healthy environment. When you need to have bio-hazard containers and trash removed from your work area you must call central supply. Stress in the work place is being addressed. All new employees will have their physicals and lab work before they start work. Schedules for Health and Safety Programs are out 3 months in advance so members can plan to attend."

"Report Labor-Management Conference

The Labor-Management Conference was held at the Holidome in Tucson on March 26, 27, and 28. This conference was sponsored by the University of Arizona. The purpose of the conference was to have labor and management discuss issues that affect each other. . . .

El Rio Division members attending were Gay Evans, Mary Lou Gonzales, Ethel Larsen, Alicia Tovar and Yolanda Tupiken.

A persistent theme emphasized was labor-management cooperation. The mayor of Phoenix presented the results of labor management cooperation with city employees and how it improved services for the city. The Communications Workers of America (CWA) and a consultant to utility companies in the East presented a workshop on joint labor management success with employee assistance programs. One keynote speaker made the point that if unions died management would have to deal with labor management problems on the legislative level, which would make problem solving longer and more cumbersome.

In a keynote speech, health care issues were discussed by Joe Schmitz, AFSCME International Staff. He addressed issues like cost-containment, health care costs escalation, equal access to health care for all, utilization review programs, and prevention and wellness programs, as well as occupational health and safety programs. As union members we should be proud that El Rio is already in the forefront for health benefits and cost containment strategies.

The workshop on absenteeism and tardiness was very informative. Less than 5% of workers including management personnel are chronically absent or tardy, yet most management policies and union contracts have addressed this issue without ever facing the fact that these workers might have problems that need to be addressed. Unfortunately, what usually occurs is that inflexible, punitive and ineffective rules are devised and imposed upon everyone."

April 17, 1985

Special Union Meeting

Nominations were held for union officers and stewards in the El Rio auditorium at noon this day. A relatively good turnout union members came to this meeting.

April 18, 1985

Negotiating Committee Meeting Minutes by Negotiation Committee Secretary, Alicia Tovar

A questionnaire dealing with the up coming negotiations had circulated the clinic and the results were reported at this meeting.

The top four ranking issues were:

1. Job protection for job related disabilities

2. Career Ladders.

3. Staffing pattern provisions for adequate staffing levels in some areas.

4. A tie among the three areas:

• Appropriate staffing for night clinic.
• Education benefits revised and extended.
• Entry level qualifications recognized.

After a discussion about the negotiation spokesperson, the union members unanimously agreed that Larsen would be the 1st spokesperson and AFSCME staff member Frank Tilford would be the 2nd spokesperson.

Larsen raised the issue of a vacancy due to the resignation of a committee member and requested input on how to go about replacing this member. The members agreed unanimously that the resigning member should be asked to submit the name of a replacement. That name would be submitted to the committee for approval.

The union received a proposal from management regarding an 8% wage increase for non-bargaining unit employees. The group decided to further study the matter.

After the financial problems of El Rio were discussed, the group decided that Larsen should request all pertinent accounting information on an informal basis first.

April 22, 1985

Letter to Jim Powers, Interim Director from Frank Tilford, AFSCME Field Representative

"This is to inform you that Ms. Ethel Larsen will be the union's Chief Spokesperson for the upcoming re-negotiations. I will be assisting her in the capacity of Co-Spokesperson.

All management communication regarding these negotiations should be routed to her.

If it meets with your approval, we would like to initiate those re-negotiations prior to June 1st.

Also, in order to establish the ground rules, we will need to schedule a meeting sometime in the near future."

April 23, 1985

Memo from Planner I to Several Personnel but this Time Including Larsen

Seven new agreements had been negotiated.

April 30, 1985

Letter from Michael Nolin, Director of Planning to Mary Lou Gonzales, Chair, El Rio AFSCME

The personnel manager, Ron Rivera, had recently left El Rio. Powers, still the Interim Executive Director, assigned the task of developing a revised evaluation form to Michael Nolin.

Nolin wrote about the development of such a revised Employee Evaluation Form which had been planned but inactive for 18 months. Nolin wanted to get to work on this project immediately. In his letter to the union Chair he wrote:

"I would also appreciate receiving the suggestions and recommendations from the El Rio bargaining unit. More specifically I would like to know:

1) What deficiencies you see with the present system and form;

2) what deficiencies you see . . . that was put into effect on May 2, 1983 and later withdrawn by the Executive Director

3) an ideal performance appraisal system as you envision it.

4) any sample evaluation form which you consider to be beneficial for use by El Rio.

It will be necessary to develop both a system and a form which are useful to El Rio and its employees. I am open to considering any suggestions regarding the form or process. However, at the very least the evaluation form and performance appraisal system must be designed to:

a) Assist the employee in improving performance through a constructive evaluation opportunity;

b) provide a summary rating which can be used in determining 'merit' increases.

c) be usable by El Rio supervisors and managers.

Any suggestions or ideas regarding employee evaluations at El Rio will be welcome."

End of April 1985

The union submitted proposals for renegotiating.

May 1985 - Negotiations & Union Elections

Beginning of May 1985

Although most employees already knew Tovar, and had an idea of where she stood on the issues, she felt it important to make a statement of her positions before the uncontested union election. So she stated her positions accordingly,

• "As a health care worker, I understand health care workers' issues as they relate to labor-management relations. I will represent and advocate your interests and needs to the best of my ability.
• The commitment to building our union into a stronger and more united employee organization is one of my priorities. Our union was born through struggle and with unity we can secure the gains we have made in the areas of wages, hours, and working conditions as stipulated in our contract.
• With the knowledge and experience I have gained through representing you in the past as a union steward, officer, and committee member I have the confidence and ability to get the job done."

May 2, 1985

Union and management met and established ground rules. Both employees and management expected the renegotiating to be completed within a short time.

May 6, 1985

Union Newsletter

The newsletter opened with an update of the negotiations. Ground rules had been reestablished, and the first articles to be discussed were listed. Union members were encouraged to sit in, as observers, at the negotiations. Except during the time that Robles advocated for the union, it had been common practice at El Rio to encourage the membership to be present. Of course they were limited because they also could not leave their work site to attend the negotiations. Still, employees frequently came during their breaks, lunches and after work. For those employees who could not or did not wish to sit in, they were able to go to one of the members of the negotiation team to get an up date on the negotiations.

Earlier nominations for officers had to be done again because inadequate notification had been given to the membership earlier. The members could make nominations or meet with employees who had been nominated at the next union meeting.

The Employee Assistance Program (EAP) was described to the membership:

"The Employee Assistance Program task force committee is a joint Labor-Management Committee. Its purpose is to determine how a special assistance program will be implemented at El Rio.

EAP's have been established at other work sites to assist employees. The purpose of EAP's is to help employees that face obstacles which affect their job performance. These may involve substance abuse, family conflicts, work stress and general personal problems.

At present, the committee is developing its policy statement and need's assessment questionnaire. The questionnaire is going to all El Rio employees."

May 6, 1985

Memo from Planner I to "All Interested Parties"

Three new contracts were added to the list of negotiated arrangements with outside providers of medical services. In May, two more memos were to come with an additional six contracts. Then it ended. Those arrangements had meaning for El Rio only as long as we maintained the HMO.

May 10, 1985

Memo: Labor and Management to All El Rio Personnel. Subject: Union Negotiations and

Renegotiations Begin

"As you know, the management of El Rio and the APEA/AFSCME Local 449 have begun the process of renegotiating certain provisions of the Labor Contract in accordance with Article XXXII. Ground rules and an initial agenda have been developed. It is the intent and hope of both parties to develop a contract which satisfies both the management and the union. Any such agreement which satisfies the needs of both management and the union will benefit the Center as a whole and the people served by the Center.

The first negotiating session is scheduled for May 10, 1985 in the El Rio Auditorium at 3:00 p.m. Subsequent sessions will be held each Monday and Friday at the same time. The number of observers is limited to the number of participants at the negotiating table. All El Rio personnel who desire to attend the sessions as observers may do so only on lunch, break time, leave time or non-working time.

If you have any questions or need additional information, please contact your union steward, supervisor or a member of the Negotiating Committee.

Signed by Michael Nolin, Management Spokesperson and Ethel Larsen, Union Spokesperson.

.

The union team, in addition to the union staff person, had Gay Evans FNP, Mary Lou Gonzales FNP, Eric Gormally MD, Ethel Larsen, Anna Lujan, Marsha Mason MD, Susan Mireles RN, and Alicia Tovar.

Gormally, an admirer of holistic medicine, frequently used running to unwind. Employees generally found it easily to work with Gormally.

Anna Lujan, a kindly, well-liked wife and mother, worked in different areas at El Rio at entry level positions. At this time she worked in the Data Processing Department.

Sue Mireles, later to become the Chief Steward when Susan Moreno was laid off, would be a loyal and hard-working union activist until her marriage to David Kohn, the Personnel Manager. With this marriage, she had to resign her position as Chief Steward.

The management team had John Hogan, Gregory LaChance DDS, Michael "Mike" Nolin, Jessie Reece, Lionel Tapia MD, and Florence Torres RN. Perhaps one or maybe two members of the management team could be called "hostile" to the union.

John Hogan, the Director of Finance and Dr. Fran Shevitz were to become lovers. Shevitz, who had been a union member resigned from the union about this time. Their relationship lasted beyond their employment at El Rio but sadly came to a tragic end when they were both killed in an auto accident.

LaChance, supervisor for the Dental Department, was generally not known outside of his department or the administrative offices. Many of the employees active in the union thought him hostile to the union.

Mike Nolin worked as the Director of Planning and at times led management's negotiating team. While Larsen found Nolin to be a man of honor, most of the employees knew little about him.

Tapia, the new Medical Director, made decisions which were often not popular with the physicians. Still, Tapia appeared friendly to the union. In general, most employees liked Tapia.

Saturday, May 11, 1985

Election for Union Officers

The employees elected Alicia Tovar as the new Chair, Mary Lou Gonzales - Vice-Chair, Isabel Abalos - Secretary, Amelia Triana-Treasurer and Susan Moreno as the new Chief Steward. Six other stewards were also elected.

Amelia Triana was an outgoing, vivacious, activist and the mother of Susan Moreno. Moreno, quieter than her mother, performed her union responsibilities as Chief Steward in a dedicated manner.

Sunday, May 12, 1985

Party Time! PROVIDERS, STAFF AND FAMILY - GET ACQUAINTED POTLUCK DINNER. The leaflet announced "swimming and dancing" for this last big party at Warren's home for the El Rio employees. In two years, she would leave El Rio for a position in the managed care program at the University of Arizona.

May 16, 1985

Letter from Jim R. Powers, Interim Executive Director to Mary Lou Gonzales, Chair and Josie Guerena, Chief Steward, Regarding Punctuality and Absence Policy

(Employees had elected Alicia Tovar to be union Chair and Susan Moreno to be Chief Steward but apparently Powers remained unaware of the change)

This letter introduced five pages which spelled out the policy that management wanted to prevail until after the completion of negotiations.

"I wish to take this opportunity to provide you with a revised Attendance and Punctuality Policy. This policy will become effective June 1, 1985. Since Friday, March 8, 1985, no employee has received more than a written warning for infractions under either the Attendance or Punctuality Policy. While this policy will become effective June 1, 1985, employees will be given one month grace period to adjust to this policy. This does not mean that previously unscheduled absences or occasions of tardiness will be removed from their record; however, it does mean that additional accrual to their current balances will not begin until July 1, 1985.

Please note that employees now will have the ability to remove unscheduled absences or occasions of tardiness from their record by the following formulas:

UNSCHEDULED ABSENCES

For three (3) continuous months, working days of no unscheduled absences; one (1) unscheduled absence will be removed from the employees' record.

OCCASIONS OF TARDINESS

For one (1) complete month, working days of no occasions of tardiness; one (1) occasion of tardiness will be removed from the employees' record.

During the grace period the formulas will be in effect. Additionally, scheduled absence has been rewritten to allow employees the ability of receiving provider care in Center with less than 48 hours (two [2] working days) notification. I would hope that employees continue to make scheduled appointments as a norm.

Should you have specific areas of the policy that you would like to discuss, please do not hesitate to contact me."

Larsen, recalling the workshop on absenteeism from the April Conference, viewed this as a foolish way for Powers to start his administration. The workshop had concluded that while less than 5% of all workers were chronically absent or late, most administrative policies and union contracts establish inflexible, punitive and ineffective rules instead of trying to explore why those employees have those problems and from that understanding establish ways to correct the problems. At El Rio, the union conceded to management's desires but at the same time they established another committee, the Employee Assistant Program (EAP). This program did not get off the ground until years later when management added its support.

The policy changes governing punctuality and absences had first been presented by management this year on March 6. After union complaints about the unilateral approach to the problem, the policy was revised with the consultation of the union. On July 10, in the negotiations, contract language allowed the development of a policy in consultation with the union.

June 1985 - Management's Negotiating Team Has Troubles

About Beginning of June 1985

El Rio leased a new facility in downtown Tucson for administrative work.

The Claims Department, with Larsen and four claims processors, moved into this downtown facility. Employees from other administrative departments were also moved to this facility.

June 3, 1985

Union Newsletter

Elections had been held May 11 and the results were posted in the lounge and reported in the newsletter. Employees were reminded that the positions of officers and stewards were both an ". . . honor and a responsibility." A party celebrating the election of the new officers was held.

In a section entitled "Know Your Stewards," a paragraph described one of the new stewards, Bernadette Hernandez:

"Bernadette Hernandez is an Arizona native born and reared in Tucson. She was graduated from Pueblo High School in 1980 and attended Pima College majoring in physical education. She has been married five years, has two children, a boy age five years and a daughter age three years. Both will be starting school this fall. Bernadette enjoys working with the public and has a great deal of experience with public relations. She has been employed at El Rio for over a year and a member of AFSCME since September. She is interested in learning what she can do for the union and what the union can do for her."

The newsletter provided an update on the progress of the latest negotiations. It reported on issues which brought optimism to the union negotiating team:

• Expanding promotional opportunities for new permanent, full-time employees,

• Initiating a study on providing day care facilities for child care for El Rio employees,

• Deductions for a Group Legal Care Plan,
• Updated contract language pertaining to Group Disability Insurance, and

• Employee signature on any reprimand that goes into the employee's personnel file.

The issue of child care had great support from management's team. In a somewhat surprising situation, it seemed that the management team wanted this service more than the union employees. The union employees went along with this management issue.

Other issues that appeared to be headed for resolution but still required discussion

were:

• Contracting out - the unions stood firmly opposed to this concept.
• Socially responsible investment of employee pension funds, and
• progressive disciplinary actions.

There remained significant difference over the issues of,

• The sick leave and tardiness policy, and
• Purging reprimands from employee's file after some time limit.

What had not yet been discussed involved:

• Salaries and wages,
• Education, Provider Staffing, Hours & Working Conditions,
• Education Leave
• Work in a Higher Classification and Reclassification,
• Shift Changes, and
• Evaluations.

In depth discussions of the above issues would take place at the next union meeting.

This edition of the newsletter carried a report on the Employee Assistant Program.

"Employee assistance programs have been established at other work sites to assist employees and have been successful. Its purpose is to help employees that face obstacles that affect their job performance. These may include substance abuse, family conflicts, work stress and general personal problems.

In order to be successful the following principles must be included:

---the program should be comprehensive.

---it should be planned from a multi-disciplinary perspective.

---it should include organized labor.

---it should be written.

---employee trust and cooperation is a must.

---a humanistic approach has to be taken based on the premiss that employees with substance abuse problems can be assisted and rehabilitated.

---employees must be well informed of the program.

---supervisors and union stewards should be specially trained to participate in this program."

This edition had a short article on the role of "The People's Lobby." Because no monies raised from union dues could be used to elect candidates running for political office, and because who is elected remained very important to the interests of most public employees, AFSCME, like the AFL-CIO, set up a separate political entity called "PEOPLE" (Public Employees Organized to Promote Legislative Equity) and this group became AFSCME's political arm. Only monies raised through PEOPLE, and not dues deductions, could be used to support candidates.

Lobbying, because it focused on issues and not candidates, could use dues monies for issues of importance to its membership. Quoting from "The People's Lobby: AFL-CIO Report on the 98th Congress 1983-84" the newsletter describes the role of the Lobby.

"In the future, labor's legislative successes or failure will depend in large measure upon the willingness of rank-and-file union members and local union leaders to hold members of Congress accountable for their votes. Their persistence in lobbying back home--at the grass roots--will be the difference between legislative victory and defeat. Meanwhile, the AFL-CIO is committed not only to maintaining its presence on Capital Hill and continuing the fight for economic and social justice, but also to working with our members to energize a formidable grass-roots component of the Peoples' Lobby."

The AFL-CIO's People's Lobby and AFSCME's PEOPLE organization were two separate entities. So contrary to popular belief, union dues may not be used to support the candidacy of individuals running for election. In practice, many members came out and worked on the campaigns of people whom they believed friendly to unions.

Early June 1985

Negotiation Begins

As negotiation began, Larsen represented the union while Nolin represented management. Before the completion of negotiations, management would have several different chief negotiators.

June 6, 1985

Negotiations - MOU

Among the items agreed upon was the development of a joint labor and management committee to evaluate and report on potential methods of providing child care services to El Rio employees. Ironically, in previous negotiating sessions, it had been the management team who had introduced the issue of providing child care. Management took the initiative to establish such a committee as they were the party most interested in developing the program. The union, of course, supported this effort but the impetus for such a committee came from management. In retrospect, it was a strange issue for management to put on the table at this time of severe financial trouble.

While Larsen understood there were serious financial problems because of the volume of unpaid bills, top management kept trying to hide the seriousness of the problems from both the union and from much of its own team.

June 12, 1985

Memo from James Powers, Interim Executive Director to the Management's Negotiation Team

This memo informed Tovar that Florence Torres, a relatively new Director of Nursing, would be management's new Chief Negotiator. Torrez had worked at Planned Parenthood as a Nurse Practitioner before coming to El Rio. Torrez had a brief employment at El Rio. Nolin no longer served on management's team. Another new member added to the team, Irma Borbon, a Registered Nurse, was not expected to be hostile.

June 17, 1985

Memo: to Dr. Mason Regarding Schedule for Union Negotiations

This memo provided authorization so that Mason could participate in the negotiations for a few hours on July 5. The union physicians frequently had to secure coverage if they were to be at the negotiations. Generally, they only took off a few hours. During that time, their issues were discussed.

Whenever an issue affected specific employees, the union tried to have those employees preferably present or at least consulted. For example, when the issue of contracting out maintenance services came up, the union made sure that someone able to represent the interests of the maintenance people would be present.

Except for the time when Roble negotiated, the union's Chief Spokespersons always made sure that a physician was available when issues affecting their work were negotiated. For the physicians and the other medical professionals, the issues at times were more complex and therefore demanded the presence of that staff.

June 19, 1985

Letter from Larsen,Union's Chief Negotiator, to Powers, Interim Director

The union's negotiating team formally expressed concern about the lack of continuity and resources available to the management team which resulted in violations of the ground rules and in slowing the negotiation's process.

"The union is gravely concerned about the lack of continuity at the bargaining table. It appears as though the management team is receiving inadequate support and authority to negotiate on behalf of the administration. This is seen most clearly through ground rules which have been continually broken.

1. A deadline for completing negotiations was mutually agreed upon. It is clear that this deadline will not be met.

2. There has been a consistent lack of clerical support and therefore time has been lost negotiating and renegotiating language that has already been agreed upon.

3. Management's spokespersons apparently have not been delegated the authority to implement the negotiation process.

4. Negotiating time is persistently reduced due to frequent requests for shortened sessions, unpreparedness or tardiness. In order to provide good faith negotiations the Center must be able to depend on each spokesperson to be present when scheduled to negotiate. Prompt attendance on the job is an important part of each negotiator's credibility.

The lack of continuity both delays and undermines the negotiation process and results in lost productivity and unnecessary costs. It is your responsibility to insure that the management team can proceed with the necessary resources and authority to insure continuity and an expeditious conclusion of the bargaining process."

Copies of this letter were sent to Torres, Interim Negotiator for management and to Tovar, the El Rio Chair.

Shortly After June 19, 1985

Memo: From James Powers, Interim Executive Director to Alicia Tovar, Chair Subject Management's Spokesperson at the Union Contract Negotiations

"Alicia, first please let me apologize to you since you did not receive notice of Florence Torres replacing Mike Nolin as spokesperson. I thought you would get the memo Wednesday afternoon prior to the meeting, however, you obviously didn't.

Secondly, I want to be sure I inform you ahead, this time, that as you know we are currently searching for a Personnel Manager. On Friday, June 14, final interviews were conducted and we hope to be able to announce the name of the successful candidate shortly. When this person begins work at El Rio, the person will also become management's chief negotiator. I will provide you in writing, notice of the person as soon as possible.

In view of these circumstances, management is unable to acquiesce to the establishment of any deadlines concerning the negotiation schedule at this time. I regret any inconvenience these staffing changes may have caused."

June 21, 1985

Memo from Powers, Interim Executive Director to Tovar, Chair: Subject Personnel Manager

Powers notified Tovar that David Kohn would assume the position of Personnel Manager effective June 24, 1985 and that Kohn would replace Florence Torres as management's Chief Negotiator effective June 26, 1985.

This was management's third lead negotiator. Within two days after being hired, David Kohn, the new personnel manager, found himself heading management's negotiating team. Kohn, had previously been employed in California and might have had some bad experiences there. Larsen found Kohn insecure in his new role and as management's Chief Spokesperson.

July 1985 - Negotiations, Stewards & Committees but El Rio Hurts.

July 10, 1985

Negotiations - Memorandum of Understanding

On May 16, management unilaterally wrote a policy dealing with sick leave and punctuality. Although the union agreed to temporarily abide by management's policy until the establishment of new contract language, this policy was never satisfactorily implemented.

"By November 15, 1985, a policy concerning sick leave attendance and/or punctuality will be developed by the Center in consultation with the union and subject to the provisions of this contract.

Any policy currently in effect will stand until either new policies are agreed upon by the Center and the union in accordance with the first sentence of this paragraph or until November 15, 1985, whichever shall occur first."

This language became part of the Final Agreement of July 1985.

July 15, 1985

Negotiations Were Completed

Because of the growing financial problems of the clinic, some of the portions in this agreement were subject to renegotiating within a few months.

Only a few contract provisions were open to renegotiating. The article dealing with Provider Staffing/Hours/Working Conditions (Article XIII, Section 16) called for each physician to work collaboratively with a "midlevel practitioner" was rewritten.

The article dealing with a job related injury or illness (Article VI, Section 9) was not subject for renegotiating within the next few months.

"If an employee is partially disabled as a consequence of a job related injury or illness to the extent that (s)he is unable to perform his or her regularly assigned work, the Center will make a reasonable effort to find another position for said employee within the Center which (s)he is capable of performing . . . "

Some sections of the contract were not discussed at all, with discussion deferred until November 15, 1985.

Problems With Late Payment of Bills Persist.

Frustrations among the outside providers of health care continued to build up. In a letter to John Hogan, El Rio's Financial Director, the administrator of one of the health providers wrote.

"I would have preferred to discuss the following problems with you and/or Mr. Powers directly. However, to date none of the numerous phone messages I left have been returned."

Larsen later learned that even though bills were now processed in a timely manner, they were management often did not mail them because there were insufficient funds to cover their payment.

Union Newsletter

The newsletter reported on the additional agreements that had been concluded.

"---Employees will receive an annual Cost of Living Adjustment (COLA) tied to the Consumer Price Index (CPI), on September 30th.

---Longevity Bonus for 10 and 15 year employees.

---Compensation for employees Grades I-VI on Step 9 whose position was not reclassified.

---Provisions to protect employees disabled as a consequence of a job-related injury or illness.

---Extended education benefits that increase protection for access to education program and added rewards for successful attainment of advanced degrees, certification and licensing.

---Strengthening language leading toward the development of a Career Ladder.

---Establishing a mechanism to enhance communication between midlevels and the Medical Director.

---Language intended to deal with provider issues involving the protection of a collaborative team approach to the delivery of care, protection of staffing levels and mechanisms for scheduling for administrative work were necessary.

---The current sick leave policy will remain in effect until a new policy is developed with union input or until November 15th. (Because the current policy penalizes employees for "unscheduled" absences you should contact a union representative for further information if you have either a chronic condition or there is an infectious illness within the family.

---A provision enabling up to 2 months in unpaid leave of absence.

---Compensation for working out of job classification.

---Language favoring the staffing of extended hours on a voluntary basis, encouraging work assignments within job classifications and specifying management's responsibility for the job orientation of new employees.

---Language for the protection of employee's personnel files and the transition of temporary employees to permanent status."

Copies of the agreement were made available to employees.

One article, "Meet Your Stewards," told about Sue Mirelas, a relatively new Registered Nurse who quickly became very active in the union.

"Susan Mirelas is the mother of two children, Gabriel 13, and Raquel 7 years old. She is a native Tucsonan, born January 19, 1954. Susan attended Sunnyside High School and graduated from Pima Community College with an Associated Degree in Nursing.

Susan enjoys her job at El Rio and has learned a lot about Home Health Services. Prior to working at El Rio she worked for two years at St. Mary's Hospital.

Being a union steward has been a learning process for Susan. She says, "The more I read the contract, attend union meetings and steward training, the more I understand the union philosophy. I am hoping to become more effective as a union representative through more involvement and communication with union members and non-members."

The newsletter also carried an article which talked about Labor/Management Committees. These were those committees in which both labor and management worked together to solve a problem or set of problems. The article read:

"At the last meeting of the Health & Safety Committee, the issue of smoking was discussed. The committee has agreed that smokers be permitted to smoke in 'assigned' places. Additionally, the committee will research city ordinances governing public smoking."

During the recent round of negotiations, contract language was developed that involves two new committees, the Child Care Committee and Pension Fund Investment Committee. Additionally, language was strengthened that involves the inactive Career Ladder Committee. We are planning to make all three committees active and productive. If you are interested in either serving on or supporting the efforts of any of these committees, you can contact Alicia Tovar.

The Employee Assistance Program Committee (EAP) has met and has decided to defer action and future meetings until the current transitions involving Kino and AHCCCs are resolved."

The employees could read about changes in the El Rio facilities in the union newsletter. New El Rio facilities at Kino Hospital opened while plans emerged for the closing of the South Park facility in August. Employees were warned that, because of so many changes, management might accidentally or intentionally attempt to breach parts of their contractual obligations. The employees should be concerned if there were contract violations. Still, the union and management worked together to minimize problems.

Finally, the newsletter reported that the AHCCCs contract that the clinic received since 1983 would not be awarded to El Rio this year.

July 16, 1985

Union Meeting

Copies of the new contract were available to employees. At this meeting, members of the negotiation team presented the revised contract and employees discussed new issues that were in the new contract.

July 19, 1985

Contract Ratification Vote

Union membership overwhelmingly ratified the negotiated agreements.

July 23, 1985

Notice to Patients, Regarding: "Change in Policy: Specialty Clinics"

"1. Effective immediately: all appointments with specialists must be authorized by your assigned primary care doctor.

You must either see or call your doctor if you think you need a referral. Your doctor may decide that another step may be more beneficial.

2. Appointments with specialists will no longer be accepted directly from patients. Please do not insist, instead contact your doctor.

3. Your primary care doctor needs to coordinate your care; this change will help this to happen.

4. Specialty clinics are currently over-crowded. Many patients would be more appropriately treated by their own doctors. By controlling referrals to specialists, it will become easier to obtain an appointment when needed."

These kinds of rules became common place in HMOs, but in July of 1985, they were still relatively new changes. At that time, there were attempts to explain the rules in terms of improving health care delivery. Later, most people understood those rules primarily served to control and reduce costs.

July 25, 1985

A few payments to outside medical providers did get sent out. A happy response from one such recipient warranted writing a letter. Occasionally, but only occasionally, Larsen received notes like these:

"I can't tell you how delighted I was to be informed that. . . [anonymous company] received the check in excess of $3,200 last Saturday. We had almost given up hope that any funds would be received from El Rio without us taking legal action.

I thank you for the personal attention you gave this matter, and I especially thank you for the results."

Larsen's "personal attention" at this point aimed at trying to avoid law suits against the clinic.

End of July 1985

Negotiated agreements go before the Board of Directors and are not ratified. They are, instead, sent to the Personnel Committee of the board for recommendations.

August 1985 - El Rio Failing

Early August 1985

Special Bulletin "ATTENTION UNION MEMBERS" from Alicia Tovar Chair and Frank Tilford, AFSCME Staff

"It is evident that management is unaware of the financial status of the Center. One day the financial situation is pictured as bleak and without hope while the next day holds promise of optimism. Conflicting information permeates the Center.

Whatever plans and/or actions will be developed to deal with any potentially critical situation must involve our union. The Contract reads:

'In the event the Center sustains overall revenue reductions that affect the Center's ability to meet the economic agreement contained herein, the parties to this agreement shall meet in an attempt to negotiate any and all conceivable alternatives to closure or service reductions."

Our union will be meeting with the Board of Directors, Tuesday, August 6th at 5:30 p.m. to exchange information on the impact that this situation will have on the employees, patient services, and ultimately the viability and autonomy of the Center.

Because new information is being generated on a daily basis, a special membership meeting will be held on Monday, August 5th at 5:15 at the El Rio Auditorium. All members are encouraged to attend."

August 13, 1985

Changes recommended by the Personnel Committee of the board were presented to the union. The union recognized that the board no longer operated with the same hostility as in earlier days. Still, the board's lack of support for management negotiation team worried union negotiators. While it constituted a serious breach in ethical negotiations, because of the seriousness of the financial situation, the union did not press forward on the issue. Instead it presented to the membership a chronology of what took place and notified them that negotiations might resume.

The issues to be dealt with at any new negotiations were listed as "Personnel Committee Recommendations," "Financial Issues" and "Lay Offs." The notice pointed out that the union would ask for "Job Sharing" and "Extended Recall" if there were lay offs. One other important issue involved a grandfather clause which protected the union if there were some outside take- over of El Rio.

August 16, 1985

Letter from James Powers, Interim Executive Director to Frank Tilford, Field Representative AFSCME with a Copy to Alicia Tovar

El Rio officially notified the union that layoffs were eminent.

"This letter is to provided notification to [AFSCME] Council 97, in accordance with Article XII, the Board of Directors and Executive Management of the El Rio Santa Cruz Neighborhood Health Center hereby inform you that it is expected, due to extreme financial problems, that employee layoffs will occur as soon as contractually feasible or sooner as reached by mutual agreement."

Management presents general figures:

Estimated Revenue per month $ 900,000

Estimated Expenses per month 1,106,000

Estimated Monthly Deficit $ 216,000

Total Estimated liability for purchased medical service . . . 3.4 million dollars

Letter from Alicia Tovar, Chair and Frank Tilford, Field Representative of AFSCME to the Board of Directors

"Fifteen years ago our Center opened its' doors to our community. Some of us employees were present not only for this great event, but, also when El Rio was but a dream. We have watched it grow providing human and caring services to our neglected population. El Rio has been a leader and a shining example in the community in providing health services with dignity. The people that utilized our services are not strangers, they are our friends, neighbors, relatives, our community, people who have come to depend on El Rio for many health needs.

It is for these reasons that we are more than willing to do our share in saving El Rio. We have experienced crises after crises with our finances over the years. This present financial crises, we are told, is the worse one yet.

Our concerns as a labor union encompass the concept of community as well as the fact that we earn our living at El Rio. Our union is community too, because we are the majority of bargaining unit employees, who are the backbone of services provided.

As employees we are vitally concerned, because the survival of El Rio is a continued livelihood for us.

Pursuant to your request, we offer concrete suggestions to be seriously considered and implemented. We have divided the suggestions into two (2) groupings, those which could be implemented now, or in the near future, and those which could be initiated on a long term basis.

SHORT TERM SUGGESTIONS

1. Hire competent upper managers; Executive Director and Finance director.

2. Establish a system to review competency, on a specified periodic basis, of

these two (2) key managers, as well as The Medical Director. These three (3)

positions are critical in insuring the financial stability of the Center.

3. Hold these managers accountable for their actions:

a) Incorporate language into their contracts regarding termination for just cause without maintaining them on the payroll, for months thereafter.

b) Develop contract language which establishes goals that

these people will accomplish within specified time periods.

4. Our union has been asked to combine additional duties and responsibilities into existing job descriptions . . .

Management needs to do the same. Combine manager's job descriptions to eliminate some of those high paid managerial positions.

It is a general membership consensus that the Center has too many "buffers" in management, first line supervisors, in some departments, Assistant Supervisors (i.e., lab, reception, accounting) Department heads, and Directors. Why so many Supervisors?

5. Realistic goals, objectives, time frames and measurable standards

need to be established on a departmental basis.

a) Each department has to have a budget of operating expenses. This would force supervisors to be responsible for supplies, equipment and personnel in their particular area.

6. The closing of South Park and beginning operations at El Rio South Medical Center was costly. The move was done in a haphazard fashion with very little or no planning. Management has no idea how much productivity, revenue, loss this move will entail. To date the objective remains unclear to this union.

The Center needs to stop undertaking endeavors that are of unknown and/or dubious value.

7. Medicare needs to be billed on a timely basis (i.e. monthly), for services rendered. At the present time billing and reimbursement appears to be delayed for many months exacerbating the cash flow problem.

8. Can facilities used, such as those for home health, be reimbursed by Medicare?

9. Much time and money would be saved over the long run if secretarial staff were taught word processing.

10. Measures should be taken to reduce the time spent in conflict situations with labor. The contract should be strictly adhered to, a position on the Board of Directors, a person with labor expertise, i.e., contract interpretation, grievance handling,

improving labor management relations, etc., would help a great deal.

11. Changes in Lab tests available should be coordinated with the provider staff.

12. Can loans be secured by using the Center as collateral?

13. Where frequent, low cost services or supplies are involved flat monthly rates would be preferable to the use of extensive time by claims personnel. (I.e., Walgreens Drugs)

14. Can cost of frequently used purchased medical services, be made available to physicians employed by the Center?

15. Is it financially viable to have extended hours at the Clinic?

16. Review the operations at Kino Hospital and the North Stone Office for financial viability.

17. There appears to be a lot of back-and-forth movement between the North Stone Office and the Main Clinic. Would it not be more feasible to house the claims department at the Congress Street Facility?"

With the above short term recommendations the union also presented six potential long term recommendations. These involved (1) establishing effective controls on referrals for outside purchased medical services, (2) determinating whether the current HMO fees were realistic or not, (3) monitoring the effectiveness of discount arrangements for purchased medical services, (4) scrutinizing El Rio's computer capabilities, (5) holding the Finance Director accountable for the development of cost-benefit analysis, and (6) implementing an effective system of accrual accounting.

Finally, the letter expresses concern about prospective layoffs.

August 21, 1985

Notice to Employees by Larsen, Union's Chief Negotiator

This notice chronicled events of the negotiations from March 1985 to August 1985 and then laid out "What May Be Expected."

"What May Be Expected

1. We expect to be back into negotiations by next week to deal with:

a. Personnel Committee Recommendations

b. Financial Issues

c. Lay Offs

(We might ask for Job Sharing, Extended recall, a

voting position on the Board of Directors.)

d. Possible grandfather clause to protect against take over by other facility.

e. Management has requested that we agree to by-pass the 30 day notice provision.

2. When negotiations are complete, we will expect ratification by the Board of Directors before again submitting to the membership.

3. The negotiation process will remain open and we will do all that we can to keep the membership informed and involved in the process."

Special Union Meeting

The financial crises of the clinic and the resulting layoffs were discussed along with a chronicle of events as they related to contract negotiations. Finally, a discussion took place to explore what might be expected to happen and what options the employees had to minimize the impact of the layoffs.

August 24, 1985

Union Negotiation Committee Meeting

Outline of Subjects to be Discussed.

Overview of current situation

• Status of El Rio finances - Future of AHCCCS and HMO
• Impact on Patient Care

Payment of Purchased Medical Services

Reduced services for Notch (population)

• Union's Cost Containment Recommendations
• Provider Issues
• Internal Management and AFSCME Staff Problems
• Discussion with Personnel Manager

Status of Past Negotiations

Working with State Agency

Negotiating a temporary agreement

Lay Offs

Letter to Jim Powers

Negotiations

• Completing process begun in May
• Temporary Contract 9/85 to 9/86
• Expected Management positions
• Developing Union positions

Possible ways of getting input from employees

• Questionnaire
• Negotiation Committee
• Stewards and Officers

Newsletter

August 26, 1985

Union Newsletter

The opening article in this edition talks about the "Official Notification of Layoffs"

The article pointed out that each month, El Rio goes $200,000 further in debt. It further told of the inevitable layoffs and that the members had been considering how to minimize the impact of the expected layoffs. While layoff notices could begin to be sent out within the next 24 to 48 hours, the actual layoffs were not to begin until about September 16 which would be 30 days after the union had received notification.

The newsletter made reference to the six page letter sent to management and which contained recommendations for both short and long term cost containment. Several of the union's cost containment recommendations had already been implemented.

While the negotiations had been completed by July 12 and the union membership overwhelmingly ratified the agreements, management had not. An additional Interim Contract that dealt with the crises' situation had to be negotiated. But the union insisted that the contract be ratified before the imposition of Interim Agreements. Additional, in the Interim Agreements, the union needed to look at some issues affecting laid off employees such as extending benefits for some period of time and establishing recall rights.

The newsletter included a questionnaire to determine how the employees might be willing to help their laid off co-workers. Four options were present: Job Sharing, Non-Provider Four Day Week, Providers-Reduction of One Session Per Week and finally a 10% reduction in pay for all employees. The union defined these options as follows,

"Job Sharing - This is a situation where two employees having the same job description voluntarily agree to share one job. Such an arrangement would mean that both employees would be working part-time, receiving half the wages, but maintaining the same level of pay per hour. Benefit arrangements would be subject to negotiations. [Two provider jobs were saved using Job Sharing]

Non Provider Four Day Week - This would involve a reduction in time worked from 40 hours to 32 hours per week. This approach would enable the clinic to reduce personnel expenditures and possibly reduce the number of employees to be laid off. For employees there would be a reduction in the total income per employee, but no reduction in pay per hour. This approach would probably be subject to staffing level requirements. [Although this was very popular among the employees who responded to the questionnaires, it would not be implemented.]

Providers-Reduction of One Session Per Week. This would result in a reduction in the time worked per week for the providers involved. This option would enable the clinic to reduce personnel expenditures and possibly reduce the number of employees to be laid off. This approach would probably be subject to staffing level requirements. [As with the non-providers, this was also very popular but would not be implemented.]

10% Reduction for All Employees - All employees, including management staff would take a 10% reduction of pay with no change in the number of hours worked. This arrangement would result in reduced number of employees laid off. [This option was not popular with the employees. It was not implemented.]"

From: Ethel Larsen, El Rio Union's Chief Spokesperson and Frank Morales, AFSCME's Area Director, To: Jim Powers, El Rio's Interim Director. Carbon Copies to Alicia Tovar, El Rio Union Chair and David Kohn, Personnel Manager

"Dear Mr. Powers:

On several occasions, the union has expressed its concern about the current crises situation and has repeatedly stated the desire for cooperative efforts to constructively deal with the ensuing problems. In addition to our meeting with our membership and with management to explore cost containment options and our efforts to provide information and direction to our membership, we have agreed to sit down at the negotiation table to review the contract for temporary modifications thru an interim contract. But before we can complete agreements on an interim contract, we must establish the basic contract by concluding the negotiations process which began in May of this year.

It should be reemphasises that in order to avoid labor/management conflict the integrity of the contract must be maintained and there must be good faith bargaining. Good faith bargaining involves:

1) The absence of unilateral action '. . . with respect to matters concerning which it is required to bargain, and from making changes in terms and conditions of employment without consulting the employees' representative.' (NLRA Section 8(a)(5)

2) The delegation of authority to implement the negotiating process to the person representing management at the bargaining table. It is essential that when we negotiate at the bargaining table, we do so with the full confidence that we are dealing with someone who has the authority to represent management's interests. Anything less constitutes bad faith negotiations. The negotiation process involved trade-offs between the parties involved and is undermined when several weeks after bargaining at the table has been completed and employees have voted for ratification, a management committee decides it wants changes [not relating to the emerging crises] in sections agreed at the table. Such action undermines the negotiation process.

It is our understanding that the negotiation process will re-open on Tuesday, August 27th. Assuming that management's representative is fully authorized to bargain and that there will be a quick resolution to the ratification of the contract negotiated, we are confident that we can cooperatively develop a temporary contract to deal with the current crises."

Labor/Management Negotiations - Revised Ground Rules

The old ground rules, for the most part, prevailed with the addition of two sections. Those sections dealt with the temporary nature of what would be negotiated.

"B. Basic Premise

Management will recommend [to the Board of Directors] ratification of contract provisions negotiated in May thru July of 1985. Assuming that the contract provisions are ratified, an Interim contract based on temporary modifications of the newly ratified contract will be submitted to both the Board and the Employees for ratification.

C. Temporary Modification in the Interim Contract shall deal with:

1. Layoff/Reorganization Time Frames

2. Monetary Issues: i.e., Raises & Education Benefits

3. Operational Constraint"

David Kohn now served at management's Chief Spokesperson for management with Jim Powers as his alternative. Larsen remained the union's Chief Spokesperson and Frank Morales from the union staff served as the alternative.

August 26 through September 6, 1985

Negotiations of the Interim Agreement

Two relatively new union members, Dr. Francisco Prieto, and Edith Underwood, joined the negotiation's team. Prieto, who held the position of Chief of Staff, effectively represented his constituency while Underwood, a pharmacist who grew up in the small town of Florence in Arizona, would become an active union member. In addition to serving on the negotiating team, Underwood became an effect chief steward. Larsen again served as the Chief Negotiator.

Management's team had David Kohn as the Chief Negotiator, James Powers and Lionel Tapia, MD. Tapia, the Medical Director like Olson before him, has supported the union.

The union and management concluded one of a series of Interim Agreements. The term "Interim Agreement" would be defined in the contract as:

"...the Labor/Management Agreement Contract shall be comprised of the Basic Labor/Management Agreement as modified by the Interim Agreement."

The union had become limited in its ability to protect jobs because of the dire financial situations of the clinic and also because of the legal provisions governing a firm who filed for Chapter 11 Bankruptcy. El Rio had begun to prepare to file for bankruptcy under Chapter 11.

Court decisions varied on questions involving union contracts with firms which filed for bankruptcy. Chapter 11 required that prior to the rejection of a collective bargaining agreement the employer must make proposals of contract modification that could enable reorganization. The firm must then participate in good faith negotiations with the union over those proposed contract modification.

Those negotiations, then, were to be good faith negotiations.

While all education leave became temporarily suspended, those employees who were required to take courses upon which their licenses depended were given appropriate time off. For non providers, hours that were given off to attend classes must be made up through flex time. The concept of "flex time" referred to flexible work hours. There were potentially advantages to both an employee and an employer to allow flexibility in work hours.

Another provision allowed for the reorganization of the work force at the clinic. It indicated:

"If at any time during the life of this Interim Agreement the Center wishes to reorganize its work force in a manner that would affect the permanent assignment (duties contained in the employee's position/job description) of the continued employment of more than two (2) employees, the Center will consult (seek advice or information) with the union fifteen (15) working days prior to implementation. The fifteen (15) working days prior consultation may be suspended by mutual agreement. In the event of any employee layoffs, any employees to be laid off will receive a minimum of ten (10) working days notice of such layoffs."

The ten working day notice became a hardship for some of those employees laid off and in time management allowed employees with that notice to leave earlier, if they wished.

Another provision in this contract dealt with "sick leave attendance and/or punctuality" which management had earlier tried to impose upon the employees without consulting the union.

Additional changes involved staffing levels, sick leave and rehires.

This Interim Agreement would begin September 1, 1985 and could be renewed by mutual consent on a quarterly basis. By August 31, 1986, the Interim Agreement that had been in place should be terminated and the Basic Labor/Management Agreement returned.

About End of August 1985

Stacks of checks to pay outside providers were eventually found in the car trunk of the Financial Director. Medical accounts payable bills that had been processed could not be mailed because there were insufficient funds to cover those checks. Hogan, the Finance Director, was fired.

September 1985 - Layoffs & New Administration

September 3, 1985

Memo from Powers to All El Rio Employees

This strange memo reminded many employees of the inappropriate termination of Dr. Wolfe back in 1980. Generally, the employees did not understand why this memo had been initiated.

"This is a reminder to all El Rio employees that the unauthorized disclosure of confidential information is a behavior serious enough to warrant stern disciplinary action such as suspension or discharge (Union Contract, Article XXII, Section 3.)

This means information of any kind that relates to El Rio must not be discussed or divulged to any person who does not have a direct need for that information in the performance of their job classification.

This means that not only do we not talk about El Rio to non-employees, but we do not talk to fellow employees about matters that they do not need to know in the performance of their job classification. This also holds true for past employees or employees not currently working in their classifications."

September 6, 1985

Union Questionnaire Regarding Expected Layoff

The union considered three major strategies to minimize the expected layoff: (1) a four-day work week, (2) job sharing, and (3) 10% across the board reduction in every one's pay. The employees were quizzed about their preference in terms of these three strategies.

Relatively few employees returned the questionnaires but those that did express a decided preference for a four-day week, probably the least favored choice of management. Little came from the survey. A few jobs were saved when the nurse practitioners got together and with the help of new contract language were able to work out a special arrangement with management. The nurse practitioners allowed management to reduced their hours and benefits with costs equivalent to two jobs, which were then saved.

Negotiations & Interim Agreement

The negotiations for an Interim Agreement took one day. The lightning speed of these negotiations contrasted starkly with the months and months of fruitless negotiations in the earlier days where the results had been little more than ground rules.

In this Interim Agreement several sections of the contract that added to the financial burden of El Rio were temporarily suspended.

The Interim Agreement temporarily allowed for suspension of language dealing with reclassification, some education leave, staffing levels, sick leave and layoff. The employees got contract language that provided support for laid off employees in terms of recall rights and which specified the temporary nature of the agreed cuts and reductions and continued health care benefits.

Perhaps the harshest of the changes, except for the layoffs, fell on the staffing of the suites. The revised language read:

"There shall be a minimum of seven (7) support persons per Suite. Support persons shall be defined as Family Health Workers, Licensed Practical Nurse, Suite Clerk and Mid-Level Practitioners [nurse practitioners and physicians' assistants]. Support persons shall have the option of Job Sharing or taking a four (4) day work week. A minimum of fourteen (14) Full Time Equivalent (FTE) Family Health Worker positions shall be maintained.

Similar provisions were made for employees outside of the suites but were not used.

Two employees having the same job description may voluntarily agree to share one position. Sick leave, holidays, vacations and pension benefits would be based on a prorated accrual basis. Employees would have the option of joining the Neighborhood Health Care Plan or limiting health care benefits to ambulatory care at the Center. Job Sharing employees would not be eligible for disability nor insurance benefits.

Most of the other temporary loses were not significant. They involved the loss of longevity benefits, benefits for employees who reached the top pay in their grades, some reduction in health benefits for the family of employees.

September 9, 1985

Union Newsletter

This edition focused on the job reduction that took place. The union reported on how many employees lost jobs, who had been laid off or left voluntarily, jobs that had been saved through reduced sessions, three union activists laid off, six management positions that were terminated, the general situation along with the possibility of future lay offs and strategies to minimize the impact on the effected employees.

The first in a series of three major layoffs began. About 22 employees, union and non-union employees were affected. Because of "bumping rights" four of those employees claimed their rights and were able to maintain downgraded jobs while four newer employees were laid off.

Two other employees, Sue Mc Faddyn not a union member, and Tom Vincent a union member, had their jobs saved by their co-workers, the nurse practitioners, who willingly volunteered to accept reduced hours so that those two positions might be maintained.

Two part-time employees had very limited rights, so they lost their jobs.

Discussion of the ratification of the Interim Negotiations involved: why we negotiated, what we gave up, and what we protected. As with all previous contracts, this one too had to be approved by the membership. The ratification vote, scheduled to take place in two days, would be very difficult. The major arguments against ratification were raised by Guerena and Ortiz. They argued that the union gave away too much.

Even though the union expected additional lay offs, they did not know the dates nor how extensive they would be. The next two major layoffs were in February, 1986 and then again in about July of 1986, and they were to be all encompassing.

Because El Rio planned to end the HMO, in future layoffs those departments that dealt with the HMO were going to be gutted. This would mean the end of both the Marketing and Claims Department and their staff. The end of the HMO at El Rio, the desire of several employees in 1979, would soon become a reality.

September 11, 1985

Union members once more voted to ratify the Interim Agreement. After several meetings with the employees where the problems and the negotiated Interim Agreements were throughly discussed, most employees once more supported ratification of the agreement. In effect they were also supporting the work of their fellow members on the negotiation team.

Letter from Alicia Tovar, Chair of El Rio Union to Isabel Garcia-Gallegos, Chair of the Planning Committee of the Board of Directors

This letter accepted the board's invitations to participate in the Planning Committee meetings and designated Ethel Larsen, Mary Lou Gonzales, FNP and Sue Mireles, as the union's representatives.

The board committee received the result of the union's questionnaire to the membership on November 6.

Although the board felt sympathetic to the plight of the employees, there remained little they could do.

About September 1985

El Rio hired two new top administrators, Robert Gomez as the new Executive Director and Kathy Riser as the new Director of Finance.

Gomez came from San Francisco and had worked for the federal government. He had been involved in the earlier site visits to El Rio in 1983 when he then discussed with Fernando Gaxiola the possibility of coming to El Rio as the Executive Director. Gomez was familiar with and appeared to support the original objectives of the federal programs to bring health care to the under served populations in a neighborhood health care facility. Since Maltos, El Rio had not had an Executive Director with that depth of understanding and outlook.

Riser had strong accounting credentials but little is known about her.

Together, Gomez and Riser, made dramatic changes that saved the clinic from financial collapse. Key among the changes was the sale of El Rio's HMO to a national corporation, Health America.

October 1985 - Major Union Activist Leaves El RIO

October 21, 1985

The union leadership formally met with the new CEO, Robert Gomez, for the first time. Larsen remembered her meeting with Gomez. She was impressed with his outlook and determination. Larsen believed that while he might not be supportive of the union, Gomez appeared to be a capable, committed administrator who understood the original goals of El Rio. She immediately liked this about him.

October 30, 1985

Union Newsletter

The newsletter opened with a "Happy Anniversary" remembering the sixth anniversary since that first meeting in Dr. Voakes home. It was a sad birthday anniversary.

Alicia Tovar took a paid position outside of El Rio as the director of a job center for displaced miners. It was to be a temporary job and El Rio allowed her to take a leave of absence, but she never returned to employment at El Rio.

Mary Lou Gonzales, the Vice-Chair, once more found herself as the union's Chair. The loss of Tovar set in motion a Special Election Committee for the purpose of electing a new Chair. Notices were posting informing employees of where and when the nominations and the special election were to be held. Once more the special election put Mary Lou Gonzales back in the seat as union Chair.

A short article advocated that members participate in the activities of the union by joining one of the committees. A list of the committees was made available. Among the joint labor and management committees were: (1) the Career Ladder Committee, (2) Responsible Investment Committee, (3) Employee Assistance Program Committee, (4) Child Care Study Committee, and (5) the Health & Safety Committee. Other committees were: the Newsletter Committee, Planning and Goals Committee (union representation on a board committee), the Pension Fund Committee and the Negotiation Committee.

The newsletter had an article welcoming the new administrators:

"As a union we wish to welcome our new Executive Director, Robert Gomez and our new Finance Director, Kathy Riser.

Union officials had an informal meeting with Mr. Gomez on Monday, October 21st. We discussed our common interests and goals and mutually expressed the hope that we may work together toward those common goals.

While we must recognize that there will always be problems, the Union's hope is that we can work out the solutions to those problems in a friendly manner."

The newsletter gave an update on the status of the recently completed negotiations and the expectation of more interim negotiations.

"The Negotiation Committee will be meeting on October 30th in preparation for the quarterly review of the Interim Agreement. Among the issues to be discussed will be merit increases and COLA."

Even though the union welcomed him, Gomez had a very poor view of the union. He believed that the union had caused the financial problems of the clinic, a simplistic and unfair assessment. In a discussion of the problem with Celaya, Gomez expressed his concerns about the union. Celaya, however, reflected the prevailing view among employees and Celaya's belief that poor management caused the dire financial position of the clinic. Celaya suggested that if funds had to be cut, then they should include management in the cuts. Eventually, the cuts did include management.

November 1985 - Planning to Reverse Deficit

November 5, 1985

From Union Representatives, Signed by Larsen, to the Planning & Goals Committee, a Joint Board/Union Committee

The joint Labor-Board Committee worked on ways to save money. The union had the responsibility to review the problem and bring back potential solutions, those that the employees could support. The union worked at this task diligently, despite the responses from a relatively small number of members to the union's questionnaire.

"About 12% of the union members responded to the questionnaire. Respondents had few suggestions about task reductions and focused primarily on reducing costs and increasing revenues. The following is a summary of the employees' responses. No attempt was made to ascertain whether or not the recommendations were practical or appropriate. They are, however, a reflection of the employees' perceptions of what may be done to better the financial situation of the Center. Those suggestions which reappeared several times have been indicated by an asterisk.

Task Reduction

1. Reduction in paper work.

There should be some review of the paper work required as there is a "mountain of paper work."

2. Reduction in systems breakdowns.

***There needs to be a reduction in errors, misplaced charts and referrals.

Reduced Costs

1. Reduction of supplies and equipments.

• Review utilization of transportation for making home visits.
• Review forms for duplications.

2. Improve utilization of personnel time.

• Reduction in errors, misplaced charts and lost referrals.
• Reduce time spent searching for charts or to follow up on phone messages by requiring that each person who initiates chart request or takes phone message should sign her name.
• Reduce time in conflict by trying to solve grievances at the 1^st level . . .
• Improve monitoring of patients' account for those patients with insurance.

3. Fund Raising and Grants

• Use grapevine method to determine where are the block grants and other government funding sources.
• Develop a Budget Committee knowledgeable in searching for funds.
• Develop auxiliary to raise money (i.e., St. Mary's)

4. Other

• Provide long term planning and budgeting."

One recommendation called for reducing time spent in grievances by settling grievances at the first level. What is often misunderstood is that unions prefer not to fight battles over grievances. They are time consuming and costly to the union as well as to the management. The union must, however, always protect the integrity of the contract and so when there have been breaches in the contract, grievances must be filed. But here, too, it is in the union's financial interest as well as management's to resolve any differences at the lowest possible level of the conflict.

Mid November 1985

Correspondence Between Michael Harris, Chief Executive Officer of Health America and Robert Gomez, El Rio's Executive Director Regarding Plan to Purchase El Rio's HMO

Issues discussed in this correspondence by the two men involved (1) The El Rio Building, (2) Provisions of Care of El Rio HMO Members, (3) Speciality and Referral Care for El Rio HMO members, (4) Financial Considerations, (5) El Rio Employees especially in terms of helping some employees affected by staff reductions, and (6) Regulatory Approvals.

Health America recognized the "desirability" of El Rio maintaining ownership of the building and of the long term use of the building. In any case, the building had been constructed in 1977 with Hill Burton funds and any purchase arrangements where El Rio received significant funds could have resulted in some serious difficulties.

The El Rio HMO patients could, with this new arrangement with Health America, receive their primary care by El Rio physicians. El Rio would receive some dollar amount every month for each patient who accepted coverage under the new HMO, Health America. Both the premium and benefit levels were to remain exactly as they had been for the short run. When the contract time expired, new provisions allowed premium adjustments.

Health America would provide speciality and referral physicians for those El Rio patients who elected to stay.

Health America would pay El Rio the sum of $200,000 on the date of transfer and an additional amount of $100,000 one year later providing Health America retained a minimum of 3,000 commercial members, not including Medicare, self pay accounts and other members enrolled through any specific governmental program. Health America would help some El Rio staff who had been laid off by providing employment opportunities at Health America. Additionally, they provided up to 20 full time days of staff time with expertise in areas of utilization review, quality assurance, business systems and MIS.

Finally, all the above had to receive the approval of the appropriate state and federal regulatory bodies.

The above proposals were accepted by the El Rio Board of Directors subject to two amendments. One amendment dealt with financial issues and the other dealt with the Yaqui Indians and sought to maintain their coverage.

Finally, El Rio and Health America came to an agreement and for practical purposes, this marked the end of the HMO at El Rio.

November 20, 1985

Letter from Gomez to Frank Morales, AFSCME Staff, Governing Interim Agreement - Copies to Kohn and Larsen

This letter asked for a postponement of the 2^nd Interim Negotiations leading to the Interim Agreement from December 1 to December 16, 1985. The union agreed to this.

November 22, 1985

Letter from Tapia to Morales Regarding Reorganization

Dr. Tapia, who had been very friendly to the union, wanted to make changes in how they organized the Medical Department. He offered an alternative plan of organization through the

"Medical Director's Report" which read:

"Current organizational structure of the clinical department is extremely cumbersome and inefficient. Forty individuals report directly to the Medical Director and also seek him out with all types of problems . . . interruptions and delays; therefore, become the rule rather than the exception, since the director becomes highly sought after, principally because of the lack of intermediary managers.

The following reorganization proposal aims at providing a manageable structure. This revision has been developed using standard organization techniques, and was developed in consultation with the Executive Director and the Personnel Director. Please review the accompanying charts.

Proposed Reorganization

The Medical Director supervises five unit chiefs, coordinator of ancillary services, nurse coordinator and the coordinator of health education and nutrition. These eight individuals in turn manage and supervise the staffs of their respective units.

Medical Unit Chief

Unit chiefs are physician managers who supervisor the physicians, midlevels and the nurse coordinator within the unit. They are members of the Medical Executive Committee and also sit on various other committees including Quality Assurance, Utilization, and Pharmacy and Therapeutics. The unit chiefs meet regularly with the Medical Director to review data on productivity, utilization and quality assurance. Unit chiefs are responsible for the relaying of this information back to the units. In order to form a basis for further review and evaluation of the providers.

Nurse Supervisor

The nurse supervisor in the unit reports to the unit chief for issues related to clinical care and works in conjunction with the unit chief to improve and monitor the quality of the care delivered. The nurse supervisor manages the remaining nursing and clerical personnel in the unit.

Nurse Coordinator

Inter-unit coordination of nursing personnel is accomplished through the nursing coordinator. This individual is a practicing nurse or nurse practitioner with expanded responsibilities. These duties would include coordination of staffing assignments, the hiring and firing of nursing personnel and the evaluation of nurse supervisors in conjunction with the respective unit chiefs. The nurse coordinator will meet regularly with the nurse supervisors in order to coordinate the various activities of the Nursing Department.

Coordinator, Ancillary Services

The ancillary services coordinator will be responsible for the functioning of the departments of Laboratory, Radiology and Medical Records. Regular meetings will be held in order to coordinate these services. The ancillary services coordinator will attend the Medical Executive Committee meetings in order to give input and receive information regarding the interaction of give input and receive information regarding the interaction of these services with the clinical services provided in the units.

Coordinator of Health Education/Nutrition

The coordinator of health education/nutrition (HE/N) will oversee all activities related to patient information and instruction and will work with the nursing personnel and the Medical Director. This department will assist the medical units in educating patients both individually and in larger forums.

Implementation

In order to implement the reorganization of the clinical units, several steps must be coordinated.

1. Notification of the union of an impending reorganization.

2. Posting of job descriptions.

3. Interviews

4. Selection and notification of candidates.

5. Installation of personnel.

The objective is to complete the process no later than January 1, 1986."

Even though there were serious questions raised about Tapia's plan, in the end it was adopted. For the union, the immediate question involved the Unit Chiefs, "Were they to be a part of the bargaining unit, eligible for membership in the union?" At first they were put outside the union, but that changed. The Unit Chiefs eventually, with the help of Warren, became eligible for union membership.

December 1985 - Serious Reorganization Planned

December 9, 1985

Letter from Gomez to Morales with ccs to Mary Lou Gonzales

In this letter Gomez served official notice that management intended to ". . . implement a major reorganization . . . " The letter goes on to present issues to be discussed at the Interim Negotiations scheduled for mid December.

"We would like to address several issues in this letter and also use it as a framework for our discussions in the meeting we have scheduled for this coming Thursday, December 12, 1985 . . .

1. This letter serves as official notice of our intent to implement a major reorganization which will affect the employment tenure of more than two bargaining unit members. This reorganization will commence 18 working days from the date of this letter. At our meeting on December 12, we will provide you with whatever pertinent material regarding this reorganization we have at that time and also seek your advice regarding the reorganization.

2. There will be a major change in the job description for Accounts Receivable Collections Clerk. In accordance with Section 8 (a)(5) of the National Labor Relations Act, we are submitting to you a draft of the revised job description and are prepared to bargain in good faith regarding its content.

3. This meeting shall be considered to be the quarterly meeting between labor and management for the Fourth Quarter of 1985.

4. As the proposed reorganization will involve a reduction in work force, we would like to arrive at a mutually agreeable framework, in terms of procedures, for implementing this reduction in force in a manner which will minimize any negative impact to both the Center and those employees affected.

5. Also, as it pertains to the reorganization, we would like to discuss bumping and seniority issues with the goal of avoiding some of the confusion that developed around these issues during the layoff this past September.

6. We wish to arrive at a mutually agreeable extension of the Interim Agreements. Additional issues we wish to discuss, which are not addressed in the current Agreement, are:

a. Changes in the Pension Plan

b. Contracting out for services.

We realize that much of what is being proposed will negatively impact on your membership. It is, however, with the goal of making the Center a financially and operationally viable entity, which will survive in the long run, that we are making these changes. The long term survival of El Rio is to the benefit of management, labor, and the community as a whole. In light of this, we look forward to your constructive input and cooperation in making these painful but necessary changes."

December 10, 1985

Union Newsletter

This edition of the newsletter started out by again discussing the seriousness of the financial problems at the clinic. Some mention of resuming negotiations, specifically the employee health care benefits and home health aides' training took place. The last article in the newsletter involved an editorial inviting employees to submit articles reflecting their views or other views.

"Let's Deal With Reality

People join unions to represent them in areas of economic benefits, improving job conditions and job security. The union is a spokesperson for workers and their rights. Workers have a right to representation when they feel unjustly treated, when they have been denied promotions or wrongly fired. Members have the right to elect their officers and representatives. This is one of the ways they have in expressing their voice in the union.

At El Rio our union has been able to improve our working conditions, wages and benefits. We have been able to settle a lot of problems informally before they get to the grievance level. We have been open in elections, meetings, committee assignments and in negotiations.

Now that we are facing a major crises we have to be prepared for hard times and more than ever we need unity to work to keep our union strong.

NOW LETS FACE REALITY

We do not know whether El Rio will survive this financial crises. The auditors October, 1985 financial reports shows ". . . an accumulated unappropriated general fund deficit of $5,426,108." This is the largest deficit of the clinic and we MUST aid those employees who will be laid off. We all have a better chance at survival if union time and energies are directed toward these goals.

Resuming Negotiations

Renewal of the Labor/Management Interim Agreement is based on mutual agreement between the union and management. Negotiations involving contract changes will begin on December 16th. The Union Negotiation Committee will be meeting at noon, Wednesday December 11th in preparation for the negotiations. Some of the issues that may be addressed are excessive overtime, and reorganization. All union members are welcome to attend.

Employee Health Care Benefits

Because of the buy up by Health America of most of our HMO plans, some employees have raised questions about the status of employee health care benefits. On January 1st, Health America will indeed take over the administration of the El Rio employee HMO plan. There will be no immediate change in the range of employee health care benefits covered by the Labor/Management Contract or under the El Rio Neighborhood Health Care Plan. But by November 1986, at the time of annual renewal, employees should expect Health America to make changes.

Home Health Aides Training

The Home Health Aides have just completed a 96-hour course on physical therapy. The course consisted of various methods and techniques on how to apply exercise with or without weights. These techniques may apply to stroke victims or to patients with Parkinson disease, paralysis, constrictor of muscle, hip fractures, decubitus ulcers or arthritis related problems.

The course will give the Aides the ability to identify health status changes, certain limitation in elderly people and the process of aging. Each Aide has been certified as a 'Certified Restorative Aide.'

We give thanks to the El Rio Division of AFSCME for lending part of the registration fee. Also special thanks to Dianna Gonzales, Home Health Administrator for implementing the special training for this Aides' certification.

By Emma Mills, Amelia Triana and Juan Valencia"

During the negotiations, management put on the table contract language which would result in all employees paying for a large portion of their health care benefit. Under the proposed language, all employees who up to this point had not had any costs for receiving care would have an enrollment fee deducted from their paychecks every two weeks. At that time it amounted too less than $10.00 per paycheck. For professional and higher paid employees, this would be a small sacrifice to make. But $10.00 per paycheck for all employees was regressive. That is, it would hurt the lower wage earner to a far greater degree than it would affect the higher wage earner. The union understood the profound implications such a change would have on the lower wage earners and in a sidebar, away from the negotiations table, pointed it out to the new administration. The new administration immediately removed this proposal from the negotiating table. To Larsen, the new administration's actions made it clear that although the financial situation remained severe, they brought to the clinic a new depth of concern for the welfare of the employees.

December 12, 1985

Union Notes in Preparation for December 12 Labor/Management Interim Negotiations

These notes contained three topics: (1) Issues to be discussed at the negotiations, (2) the union's response to management's December 9 letter to Frank Morales, and (3) the ground rules for the up coming Interim Negotiations.

The informal issues expected to be discussed could be reorganization and the Accounts Receivable Clerks. Management wanted to put the Accounts Receivable Clerks on a commission basis. Because this stood outside of the El Rio's experience, the employees wanted to explore the implication of such a change. Still, because few of those clerks in that department had joined the union, the membership felt less sympathetic toward opposing changes that might be made.

The issues expected to be among management's proposals dealt with the suspension of the pension plan and the contracting out of maintenance service. The concept of "contracting out" had been growing nationwide in recent years and this was especially true for maintenance workers. It had the effect of reducing the income and benefits of employees involved and at the same time, often reducing the services they provided.

The union had strong support from the maintenance employees and opposed the concept of contracting out. Larsen, understanding the severe deleterious effect that contracting out had on El Rio employees, also vigorously opposed the concept. The union team knew that this might be a hotly contested issue.

In response to Gomez' letter of December 9, the union pointed out that any negotiated Interim Agreement would require the approval of the membership. Still, the union agreed with management's position that this meeting be considered the quarterly meeting between labor and management for the fourth quarter of 1985.

The union expressed serious concerns about the portions of the reorganization plan which involved Medical Unit Chief as supervisors.

On the painful question of layoffs, labor agreed with management's proposal for

". . .a mutually agreeable framework, in terms of procedures, for implementing this reduction in force in a manner which will minimize any negative impact to both the Center and those employees affected."

The union also agreed to try to minimize confusion when dealing with bumping rights and seniority issues.

In these negotiations, in addition to trying to prevent unnecessary changes in the contract, the union planned to ask for a cap on overtime and for giving the longevity bonus for anyone who qualified but was being laid off.

Most of the ground rules discussed where used previously and did not present any new problems.

December 16, 1985

2nd Interim Negotiations Begins

The issues on the table were contracting out of maintenance services, temporary suspension of the pension plan, limiting overtime, providing a longevity bonus for eligible terminated employees, revised job descriptions and A/R commission.

The issue of contracting out became hotly contested as expected. At risk were the jobs of the five maintenance employees and the prospect of future attempts at contracting out.

In a Memo from the new Assistant Controller ,Christi Heyer, to the Personnel Manager, David Kohn, regarding maintenance costs, the following argument for contracting out was put forth:

"The following costs are related to our in-house maintenance crew:

Annual Salaries (5 people) 59,299

Average Benefits @ 13% x 1.13

Total Salary Expense 67,008

Plus Supplies 26,784

$93,792

Estimated Annual HA employee premiums 6,023

Total Annual Expenditures for in-house

maintenance crew. 99,815

2. The approximate amount these employees have vested in the pension

fund is $10,820. (Actual amount was used through 5/31/84.

1985 was, estimated, based on 1984 contribution.)

3. The proposed cost of a contracted maintenance service is 3,200

per month x 12

Annual cost of contracted maintenance service $38,400

With this memo was a proposal from a professional cleaning service indicating that they charged only $3,200. per month. Not shown but understood was that the maintenance people under this contracted arrangement made much less money and had far fewer if any benefits.

Larsen had studied the issue of contracting out in one of her university graduate classes in Public Administration. She put together reasons for not contracting out and these were successfully used during the negotiations.

Here then were some of the arguments made against contracting out:

(1) Because of high turnover of personnel in the contracting out situation, the workers lack a familiarity with El Rio in terms of historical background and the areas of their work. The personnel had no incentive to promote the welfare of El Rio. Management would lose control and accountability over the services and the possible future costs.

(2) An unsuccessful example of contracting out that made national news involved a chartered plane that crashed. Who was responsible? The government did not have control over safety factors nor over employees' skills.

(3) How would the impact of contracting out be on the other employees. Who would be next? Data processing? Accounts receivable? Home health? In a South San Francisco situation, the work of engineers was contracted out affecting six employees. The morale of the other employees fell and the attrition rate more than doubled that year from 15 to 39. Low morale continued until they dropped the contract nine months later.

(4) Contracting out could open the ugly door of patronage? How were contracts awarded? In the South San Francisco situation presented a clear problem.

(5) Contracting out established a two tier system of employment at El Rio. Those employees working directly for El Rio enjoyed and were protected by the El Rio benefit package. Those people employed by a private firm should expect minimal salaries and little or no benefits.

(6) The attempt to contract out had been unsuccessful at El Rio. The security guards were originally contracted out positions but are currently El Rio salaried positions. Some physicians were contracted out under an IPA arrangement but this arrangement was less than successful. The contracted maintenance at the North Stone office remained less than satisfactory in terms of quality care. If the contracted out service is less than effective, where could the burden fall--would it fall on Central Supplies personnel? The Health and Safety Committee had concerns that routing maintenance might be unsatisfactory in terms of employees health needs.

(7) El Rio's previous experience with contracting out maintenance service had not been successful. During that time, supplies were stolen, carpeting torn, baskets were not emptied, toilet bowls inadequately cleaned and trash left behind. The turnover was large and it was claimed that you never saw the same people twice in contrast to employed staff who had virtually no turnover and very few absences. The health needs were not met and many believed that an increase in infections would result in increase in costs. If there had been a serious infection, who could be held responsible, El Rio or the firm that had been contracted.

(8) Finally, the Labor/Management Contract required that each provider be assigned "a CLEAN and SAFE" environment. Contracting out might lead to increased grievances if that provision in the contract was not met.

The negotiations took a short time. In the end, management agreed not to contract out the work of the Maintenance Department but did gain a temporary suspension of the pension plan and was able to revise job descriptions in concert with the union.

The union and management agreed to try using commission for the accounts receivable positions. The union did not know how that would impact the employees in that area but since those employees had not joined the union and had not expressed any compelling arguments against using commissions, no rational reason existed to contest the change.

December 24, 1985

Letter from the Law Offices of Stompoly & Even, to David Kohn, Personnel Director, Regarding Waiver of Minimum Funding Standard of the Money Purchase Pension Plan

Kohn had wanted a legal opinion on whether or not El Rio could suspend for the period of January 1, 1986 through May 31, 1987, contributions to the employees pension fund. The law office letter responsed to Kohn's inquiry. The response from some attorney pointed out that the "Money Purchase Pension Plan" had been in effect for about 10 years. In the past, El Rio had contributed 5% of the amount of the employees' wages to this plan. Employees, if they wished, could also contribute monies to the plan.

The legal advice directed El Rio to apply to the Internal Revenue Service for a waiver of part or all of the minimum amount that might be due.

December 30, 1985

Union Newsletter

This edition dealt primarily with the layoffs. It began by pointing out that between 40 to 50 employees were expected to be laid off. It then wrote about unemployment insurance, the negotiations and the implications of "Temporary Suspension" especially as it related to the pension plan.

"LAYOFFS

Although all El Rio employees will be affected in some way by the impending lay-offs, between 40 to 50 employees are expected to receive their lay-off notices on Friday, January 3rd. This means that one fourth of our co-workers will be directly affected and will feel the sting and shock of losing their jobs. For some employees, this situation may lead to new opportunities.

If you are laid off and have bumping rights, your decision whether or not to take advantage of these rights should be made by Monday, January 6th.

Our union will be working with management to minimize the effects of those lay offs by providing information and resources that will enhance employees' abilities to get new jobs. People representing the Job Training & Placement Act (JTPA) and the Department of Economic Security (DES) will come to El Rio to assist displaced workers. Another Job Fair may be developed. In addition, the union will gather resumes of laid off employees and these, in cooperation with management, will be sent to employers in the Tucson area. If you need help in developing a resume or want information about Unemployment Insurance you should call the union Office at . . .

UNEMPLOYMENT INSURANCE

Weekly unemployment insurance benefits are determined by computing 4% of the wages paid to you in the quarter in which your earnings are the highest. However, this compensation cannot be greater than $125.00 per week. For example . . .

Since unemployment insurance payments are made for weeks of unemployment occurring after a claim is initiated, you should initiate a claim for benefits as soon as you become unemployed.

If you are receiving your pension funds then you many not be eligible for unemployment insurance benefits. Additionally, unemployment insurance benefits begin only after you vacation benefits are used.

For more information, our Union Office will make available the pamphlet "What You Should Know About Unemployment Insurance in Arizona."

NEGOTIATIONS

Although the Interim Negotiations are still in process, there appears to be basic agreements governing limitations on mandatory overtime, longevity bonuses for eligible employees who are laid off, establishment of co-payments on dental visits and charges for some dental services. The major issue on the table involves the temporary (17 months) suspension of the employees' Pension Plan. Any agreement will include reporting requirements with stiff penalties for not getting reports out on a timely basis. Although there has been agreement on some of the basic issues, both management's and AFSCME's attorneys are involved to insure that our Pension Plan is protected under the Employee Retirement Income Security Act of 1974 (ERISA) and the Internal Revenue Service.

The issues of re-organization, especially as it relates to Medical Unit Chief(s) and Accounts Receivable Collections Clerks will be discussed outside of the Negotiations process.

As soon as negotiations are completed, a Special Membership Meeting will be announced to discuss provisions in the Interim Agreement and a Ratification Election will be held. Any member wishing to discuss the process, the issues or having questions prior to the completion of Negotiations should contact any of the following members of the negotiating team:...

IMPLICATIONS OF TEMPORARY SUSPENSION

Currently, 5% of all gross wages must be put into the Pension Plan by May 31st of each year. A suspension of contributions will have the effect of reducing future benefits but will not affect employees' present pay checks. Without touching funds already in the Pension Plan, this temporary suspension will mean that El Rio will have more funds with which to make arrangements to pay back El Rio's creditors. Our clinic's survival and ultimately the jobs of the remaining employees depend on El Rio's ability to make long term, non-interest, discounted payment arrangements with El Rio creditors. To some degree, the survival of our Clinic is in our hands, the hands of the employees."

About End of 1985

The union continued preparations for the layoffs. Through the Job Training and Partnership Act, a program which ran workshops for the employees of businesses in distress, most of the laid off employees were able to find new jobs.

December 31, 1985

Letter from the Auditors to the El Rio Board of Directors

The letter indicated that the liability for the six month period ending December 31, 1985 was greater than the assets by $5,099,872. The auditors finally came to the conclusion that El Rio might not be able ". . . to continue as a going concern."