Jason Green, 02/25/12
The Palo Alto City Council declared an impasse late Friday afternoon in labor talks with the Police Officers Association, setting the stage for a potential showdown in Santa Clara County Superior Court.
The move follows 16 meetings over the past six months to reach a new memorandum of agreement. The previous contract expired June 30, 2011.
“The council’s decision to declare impasse does not come easily,” City Manager James Keene said in a statement. “The city has reached agreements that include employee pay and benefit concessions with all of our other labor groups. We expect the POA to participate fully with our other employees in concessions to help ensure the city’s fiscal sustainability.”
The city is looking for a roughly 4 percent reduction in overall compensation from the 82 employees represented by the police union, said Marcie Scott, assistant director of human resources. The concessions are critical to the city’s plan for addressing an estimated $4.3 million budget shortfall.
“One of the key areas we’ve focused on is pension costs, because they’re continuing to rise,” Scott told The Daily News.
Currently, the city pays the 30 percent employer contribution as well as the 9 percent employee contribution to the California Public Employees’ Retirement System, Scott said. Given the shaky fiscal climate, the city maintains that union members should share the risk.
“For the city to be paying 39 percent toward pensions is unsustainable,” she said, adding that the city also wants to bump the retirement age from 50 to 55 for employees who are hired after a new agreement is adopted.
Similarly, the city wants union members to pick up 10 percent of the cost of their medical premiums — both now and when they are retired.
“We think it’s only fair to ask members of the Police Officers Association to make contributions similar to what other employees have been making, some of them for up to two years now,” Scott said.
But Peter Hoffmann, an attorney for the police union, says it’s the city that isn’t playing fair. He accused the city of bargaining in bad faith and ignoring counter proposals that would have produced the desired savings. The impasse announcement, he added, came as a surprise.
“I have not seen a city engage in conduct like this anywhere,” said Hoffmann, adding that his law firm represents upward of 100 unions. “They’ve turned contract negotiations into hostage negotiations.”
Hoffmann said union proposals, including a change in how officers are scheduled, could save the city as much as $1 million. The union has also offered to switch to a cheaper medical plan to cut costs.
“We’re very sympathetic to the financial concerns,” he said. “Are they overstated? Yes. But the proposals we’ve presented would provide significant savings.”
Scott, however, said the counter offers wouldn’t bring about the structural change that is needed to drive down medical and pension costs.
“The city believes it has been negotiating in good faith,” Scott said. “The package of concessions the city has asked for are consistent with what other bargaining units have agreed to.”
The city’s declaration of an impasse sets the stage for a potential legal showdown. The union could ask a Superior Court judge to consider its claim that the city negotiated in bad faith, Hoffmann said. A ruling in the union’s favor would reset the bargaining process.
One thing that won’t happen is binding interest arbitration. In November, Palo Altans voted overwhelmingly to strip public safety workers of that right. However, under a new state law that took effect in January, the union has 30 days from Friday to ask an independent panel to assess the situation. The council wouldn’t have to follow any of its recommendations and could impose terms.
Hoffmann said the city has other motives than to simply cut costs. Union members, some of whom he claims could see their compensation slashed by $25,000, are being targeted to bank voter support for a potential bond measure. A recent Blue Ribbon Infrastructure Commission report said that five major public facilities need replacement, including the police headquarters.
“This is a very opportunistic city that’s not going to let a good crisis go to waste,” he said. “They’re trying to exploit the public’s economic concerns to garner support for their own political concerns.”
In a letter laying out the reasons for the impasse, city negotiator Darrell Murray noted that the city can’t come up with the estimated $210 million it needs to replace or upgrade the buildings on its own.
“With all of the economic uncertainty that persists,” Murray wrote, “unless the city shows that it has required sacrifice within its walls, the prospects of persuading voters to grant additional bonding or other funding authority to meet such needs seems doubtful at best.”