Adding a new, controversial element to ongoing talks with city
unions, the Gilroy Chamber of Commerce has asked the city council
to let residents vote to repeal binding arbitration. The
proposal
– which could eliminate the power for Gilroy’s police and fire
unions to call in a third-party arbiter to resolve stalled contract
negotiations – comes as unions recover from recent layoffs and reel
from news that more layoffs could come soon.
CORRECTION: Due to a reporter’s error, the 2000 binding arbitration decision in Fire Local 2805’s favor, mentioned below, added three firefighters, not nine, to the department’s roster. The Dispatch regrets and apologizes for the error.
Adding a new, controversial element to ongoing talks with city unions, the Gilroy Chamber of Commerce has asked the city council to let residents vote to repeal binding arbitration. The proposal – which could eliminate the power for Gilroy’s police and fire unions to call in a third-party arbiter to resolve stalled contract negotiations – comes as unions recover from recent layoffs and reel from news that more layoffs could come soon.
The chamber’s board of directors believes scrapping arbitration would free council members’ hands and cut future personnel costs at an opportune time. Council members have said they are more than willing to place a repeal measure on an upcoming ballot if additional residents register suspicions, but the Gilroy Police Officers’ Association and Fire Local 2805 see the chamber’s campaign as playing on people’s financial fears because there have only been two arbitrations in 21 years, the last one of which was in 2006.
City council members are split on the issue of a third-party arbiter resolving stalled contract negotiations. Mayor Al Pinheiro has criticized the mechanism as giving an outsider control over the city’s leaky budget, but firefighters and police officers, who are prohibited from striking by state law, see arbitration as their only real bargaining chip.
Gilroy residents voted to add an arbitration amendment to the city’s charter in 1988, and rescinding that language would require another vote, which the council will discuss May 18. The previous council backed away from a similar ballot battle in 2005 after the police and fire unions complained about due process and threatened lawsuits and political retribution. This time around, though, the city is facing a $4.7 million deficit.
“The current economic conditions means fundamental changes are necessary in order for the city to be able to continue to provide essential services to its residents,” Chamber of Commerce President and CEO Susan Valenta wrote in an April 28 letter to the council.
During the arbitration process, city and union representatives meet with an arbiter – historically a Palo Alto-based lawyer – who looks at each unresolved contract issue and picks one of two sides’ final offers. Mutual agreements are allowed thereafter, but the final decision is binding. Given the fact that about 60 cents of every tax dollar goes to pay police and fire personnel, the arbiter’s decision can have far-reaching fiscal effects.
While the POA has never used arbitration, the fire union called on it in 2000 – when the arbiter sided with the department to up minimum daily staffing levels from six to eight firefighters, resulting in three new hires at a cost of about $800,000 – and again in 2006 – when the arbiter gave firefighters raises that were more than double what the city had proposed, according to contracts and city officials.
In separate, non-arbitrated deals, the police and fire unions have hammered out retirement plans. The police retirement program – known as the “3 at 50” because it provides 3 percent of the last year’s salary for every year worked and allows retirement at age 50 – took effect in 2001, five years before firefighters’ “3 at 55” deal. Since 2001, Gilroy’s public safety retirement budget has spiked from nearly $900,000 to more than $4.1 million, according to city figures. However, even when arbitration isn’t used, past and present council members have said it still hangs over their heads.
Councilman Perry Woodward said he understood why arbitration has “once again reared its head, but it really isn’t the root of the problem that people make it out to be.” Fire Local 2805 Representative Jim Buessing also cautioned against blurring council-approved deals with arbitrated decisions.
“The (Chamber of Commerce) is putting forth a smear campaign of misinformation,” Buessing said. “We should be focusing on this budget and how to maintain our reserve fund and public safety instead of trying to repeal something that has nothing to do with the current economic conditions and hasn’t for the past 20 years.”
POA President Mitch Madruga agreed.
“This was passed by the voters, and now there’s a small group that wants to get rid of it,” Madruga said. “At this point, we have other things on our plate,” such as responding to the city’s demand to cut $1.4 in police personnel costs or agreeing to laying off 10 of the union’s 58 sworn officers. Madruga also dismissed claims that the POA has avoided arbitration by threatening to invoke it in the past.
Even if Gilroyans repealed arbitration, it is unclear whether a state law would simply kick the dispute-resolution procedure back into place. Senate Bill 440 – enacted in 2003 after the state Supreme Court deemed a similar bill unconstitutional – allows public safety unions to seek arbitration when they are forced to accept a contract. The bill’s author sought to avoid revisiting the state Supreme Court by including language that allows local governments to overturn an arbiter’s decision by a unanimous vote.
Yet, the state’s First District Court of Appeals in San Francisco struck the law down last month when it ruled that “the amended version (of the bill) continues to intrude upon (a local government’s) constitutional authority to establish compensation and terms of employment for its employees.” Executive Director of the County Counsels’ Association of California Jennifer Henning said SB 440 would remain on the books, but the appellate court’s decision applies to all lower courts, which would give Gilroy a better chance if it ever comes to that.
“Elected officials should be the ones making determinations on salaries because they oversee the entire budget as opposed to an arbitrator who doesn’t have to make those other decisions, isn’t elected and can’t really be held accountable,” Henning said. “This has always been the underlying issue, but it’s underscored by this current economic climate.”
Why you should care
Binding arbitration allows a lawyer from outside Gilroy to decide contract disputes often worth millions when the city can’t agree with firefighters or police.
Where do council members stand on arbitration
All council members said they would support a ballot measure if enough residents beyond Chamber members call for it. Here’s what they have to say about arbitration in general.
“It provides a mechanism for resolving an impasse … and isn’t really what got us in this budget mess.” -Perry Woodward
“We’re elected to decide what we can and cannot afford – not a third party.” -Al Pinheiro, Mayor
“We need to see how the public feels about it and how other cities have handled it. Right now, I don’t know.” -Dion Bracco, Councilman
“I have more questions I want to ask, so for right now, I’m undecided.” -Cat Tucker, Councilwoman
“I’m tired of someone from out of town who has no … inside information and who is not affected by these decisions, making those decisions.” -Bob Dillon, Councilman
“It’s a double-edged sword … If the public wants to rescind that, that’s what the power of the democratic vote is.” -Peter Arellano, Councilman
