– Less than a week after the city and fire union reached impasse
in labor talks, the chief negotiator for Fire Local 2805 is
accusing city officials of conducting an organized campaign to rob
firefighters and police of their strongest bargaining chip.
Gilroy – Less than a week after the city and fire union reached impasse in labor talks, the chief negotiator for Fire Local 2805 is accusing city officials of conducting an organized campaign to rob firefighters and police of their strongest bargaining chip.
“There is no question in my mind that the city has tried to bargain us into a position where they can paint binding arbitration as the devil,” said Ken Heredia, the union’s chief negotiator. “Then they can go to the city and say it’s binding arbitration that forced us there. When the bargaining team comes in and says you can’t have anything more than what we’ve already budgeted for, it’s a setup.”
City Council members invoked the possibility of a ballot measure that could end binding arbitration immediately after the union triggered third-party mediation on Feb. 23.
Mayor Al Pinheiro said the timing is not politically motivated.
“There’s no such thing as an organized campaign at this time – unless something’s going on that I don’t know about,” he said. “We’re trying to take care of business that was brought before us as part of these negotiations.”
For the moment, city leaders are downplaying the ballot measure and warning that the union’s demands would devastate the city’s budget. According to the city’s calculations, union proposals would cost an additional $1.1 million a year at the same time the city is dipping into reserves to avoid layoffs and program cutbacks. The city expects to use more than $3 million in surplus funds in the current fiscal year, according to Finance Director Cindy Murphy. At that rate, the city will exhaust its reserves within five years.
“We can’t afford it,” said Councilman Bob Dillon of the firefighter demands. “It’s very clear that everything they’re looking for is a budget buster. We can’t give everything to firefighters at the expense of all the other citizens of Gilroy.”
In its final proposal to Local 2805, the city offered up a modified version of a retirement package requested by the union. The city’s version, which would allow firefighters to retire at age 55 with 90 percent of their salary, would not kick in until halfway through the union’s three-year contract. In exchange, the city demanded that firefighters accept zero wage increases, contribute a greater share of health-care premiums, and agree to roll back minimum staffing requirements – a measure city officials hope would reduce overtime costs.
“The city wants to paint this picture that the firefighters are asking for millions and millions of dollars,” Heredia said. “The real point is that the city didn’t offer us any money.”
He added that during negotiations, “the city never made the argument that they did not have the ability to pay for our proposals. It was couched more as an unwillingness to pay for our proposals.”
The city and fire union first sat down to negotiate in November, but at that point, neither side had a benefit analysis from California Public Employee Retirement System. City and fire representatives agreed in December to postpone talks, citing the importance of the CalPERS figures in assessing the costs of the opposing retirement proposals.
Negotiations resumed after the CalPERS calculations arrived early in the new year, according to Heredia.
“So we sat down and tried to bargain a contract,” he said. “We put a proposal out, the city put a counter-offer out.”
The quid pro quo included bartering over who would pick up the share of rising health care premiums, according to city and fire officials.
The city requested a cap on contributions, Heredia said, and the union countered with an offer to have members pay 5 percent of the increases.
He reasoned that the city’s last “best offer,” which would require union members to pay 100 percent of health-care premium increases without any corresponding wage hike, amounted to a cut in pay.
“We’re not asking for anything any other city employees don’t have,” Heredia added. “In the old budget, they had enough money to give 2 percent [raises] to everybody else except the firefighters. I think it’s irresponsible of the City Council to ask the firefighters to accept less than everybody else is getting.”
The union has extended that logic to a number of its requests, including a post-retirement cash bonus based on the number of years worked. Under their current contracts, city employees and police receive post-retirement bonuses topping out at $200 per month. The cash benefit for police retirees will increase to a $300 per month ceiling in July.
City officials have argued that police and other city employees, whose contracts took effect in 2001, negotiated such benefits in more robust financial climate.
But Heredia countered that the city has created much of the financial stress it now uses to denounce union requests for equal treatment.
He claimed, for instance, that the city siphoned off pension contributions during the boom years of the late 90s.
“They skimmed all the earnings off and didn’t put it aside for the day when it went back to the 8 and a quarter percent [contribution rate] that CalPERS assumed,” Heredia said. “If you always paid 12 percent, you wouldn’t ever have to worry about when the market is in a trough.”
City Administrator Jay Baksa was not available Monday to provide the city’s history of pension contributions. Human Resources Director LeeAnn McPhillips could not be reached for comment.
Heredia also suggested the city is financing breaks to business at the expense of its workers.
“You can look at some of the economic incentives that are costing the general fund money,” he said. “There are programs such as development-fee waivers that are costing the city money that could be used for firefighters or other employees’ benefits. You can say ‘Well, we need to have jobs,’ but you can’t fund those projects on the backs of your employees.”
In 2004, the city’s fee-waiver program for the downtown area saved developers $250,000, according to city figures.
Heredia suggested that city leaders who cry foul now are being disingenuous, in light of past spending habits.
“That was then. This is now, ” Councilman Dillon responded. “We have to enact the budget in the current climate. It has to reflect the reality of what the future might bring.”
The city and fire department last resorted to binding arbitration in 2000 to settle a two-year debate over minimum staffing levels at fire stations. The arbitrator sided with the fire department on that issue, resulting in the hiring of nine additional firefighters, but rejected the department’s request for fully paid medical benefits and the 3 at 50 program – the retirement package the union now hopes to win through binding arbitration.
The rules of arbitration allow for either side to declare impasse, triggering the creation of an independent panel to judge each item in dispute. Heredia will represent the fire union on that panel, and labor attorney Charles Sakai will represent the city. They are currently waiting for the state to send a list of seven arbitrators to serve as the panel’s “neutral” chair with tie-breaking authority.
The entire arbitration process is expected to last well into the summer.
Although the union triggered the arbitration process, Heredia felt the city intentionally created an “impossible situation.”
“I feel that the short-term goal here is to have an issue to bring binding arbitration to the ballot,” Heredia said. “There’s no other reason to cut the bargaining short like this.”
But for Councilman Dillon and other local leaders, the city has entered a new phase of even tighter control over budgets, especially contributions to retirement benefits.
“I would see it as more of a sea-change in public pensions as a whole,” Dillon said.
He expected the post-retirement cash bonus and similar benefits doled out in the boom years to come under scrutiny as union contracts come up for renewal.
The city employees’ contract expires at the end of June, and the police contract ends at the end of June 2006.