As Palo Alto prepares to ask its employees for more concessions, city officials are also pushing for tighter timelines in contract negotiations with labor unions so the city can craft its annual budget with greater certainty.
Labor negotiations have long been sensitive and often tendentious in Palo Alto, but it picked up added urgency last year when residents voted to revise the City Charter and scrap a law that empowered a binding-arbitration committee to settle disputes between the city and its public-safety unions. The repeal of binding arbitration was the latest step in the city's multi-year quest to curb the rapid rise of employee costs.
According to a new report from the Human Resources Department, the average budgeted cost for an employee position in the city has increased by 20 percent since 2009. The benefit portion of the "salary and benefits" has gone up by about 12 percent in the last two years.
The city has responded by passing a series of reforms. Recent changes include requirements that employees chip in for their health care costs and a new tier of pension benefits for new employees. The firefighters union was the latest labor group to adopt these concessions when it agreed to a new three-year contract last September – after 16 months of negotiations, a declared impasse and a lawsuit from the union.
The problem of rising costs isn't likely to go away any time soon. The Human Resources report states that the city projects continued increases for employee salaries and benefits, driven primarily by health and pension costs.
"The fact that on-going revenues have not been able to cover expenditure growth over the past few years and into the projected future years indicates a fundamental structural imbalance that needs long-term solutions to restore balance and provide a sustainable means to deliver services to the community," the report states.
Faced with these rising costs, the City Council is now trying to come up with official guidelines for negotiating with the city's labor unions. The council's Policy and Services Committee had its first look at staff-proposed guidelines Tuesday night and generally agreed with the draft document. Marcie Scott, assistant director of Human Resources, said Palo Alto currently doesn't have an official document that describes the city's goals and priorities on labor negotiations.
"Staff believes there's value to having a written guiding document that comes from a general high-level of what the council would be looking for in terms of labor principles," Scott told the committee.
The document she presented to the committee Tuesday focused on eight areas: city services, city finances, timing of negotiations, total compensation, recruitment and retention, transparency, management of increasing benefit costs and innovation in employment and compensation.
The one topic that council members felt should be emphasized more strongly in the document is timely negotiations. Last June, for example, the council passed a budget that included a $4.3 million "placeholder" for concessions the city was planning to achieve from labor negotiations with police and fire unions. Councilman Larry Klein was particularly adamant Tuesday about the need to get the negotiations completed before the council passes the annual budget in June. The city has not been reaching this goal in recent years, he said.
The proposed guiding document states that the City "should endeavor to reach agreement with recognized employee organizations on matters within the scope of representation prior to adoption of the City's budget for the ensuing fiscal year." Klein said he doesn't believe this statement goes far enough.
"I don't see where the incentive is for the union to reach an agreement by budget time unless we're going to live with a very hard schedule and we say that if we can't reach it we will declare an impasse," Klein said.
Councilman Greg Schmid agreed that the city should strive to reach agreements with labor unions in a more timely fashion and suggested setting a January deadline for contract negotiations.
But while the city's new guidelines will likely stress the importance of timely negotiations, setting hard deadlines could prove tricky. Scott noted that state law requires the city to meet and confer with its unions, which takes time. City Attorney Molly Stump pointed out that contract negotiations typically don't come with timelines.
Councilman Sid Espinosa called the proposed document "a balanced approach" and "the right thing to do." He also recommended adding a section in the beginning emphasizing the city's commitment to honest and straight-forward negotiations with the unions.
"I find it's often an essential component in negotiations – starting off something on common ground and understanding the respect that comes from that," Espinosa said.
Comments
Crescent Park
on Feb 15, 2012 at 3:41 pm
on Feb 15, 2012 at 3:41 pm
Dear elected representatives:
Have the employees of the city increased the value of the services that they deliver to the public by the same 12% that their compensation has increased during the great recession?
Have they delivered so much value to this generation that it is worth weighting down the next generation with out-of-market pension benefits that far outstrip the private sector?
Should the private sector, the value-creating economic backbone of this country, continue to be asked to pay more and more to support a largely-unaccountable unionized workforce that has none of the onus to add value that the private sector does?
When is the last time an underperforming government worker has been fired? Did we not just have to hire more workers to bail our our perpetually underperforming planning department?
Stand your ground and be firm. There is little justification for the level of compensation and benefits that the unions will undoubtedly feel entitled to. Be the voice of the public, stop the giveaway of public money to politically connected union interests, and defend the public who that as been paying more and more to a privileged class of worker that has delivered less and less in return.
Signed, a concerned voter.
Walter Hays School
on Feb 16, 2012 at 11:32 am
on Feb 16, 2012 at 11:32 am
What raises? My friend is an employee of the City of Palo Alto and has not received a raise of any sort in the last five years. She cannot afford to live in this area, she pays for gas, bridge toll to come to work. She has taken on more jobs that other folks have done in the past and has not been compensated for it. However, they have had to pay much more for medical coverage, retirement, have had tution reimbursement removed. Everyone wants more from the regular working folk.
What about taking from the top? Why does the city manager need a car allowance? Why are departments advertising to hire Administrators when there are not as many workers as in previous years. You don't need more chiefs if there aren't as many indians to do the job. If you keep cutting from the indians pretty soon there won't be anyone to do the work.
Community Center
on Feb 16, 2012 at 12:01 pm
on Feb 16, 2012 at 12:01 pm
I appreciate the work done by some of the council members to address the budget problems, but I don't think it is enough. The pension tsunami that is coming is going to overwhelm most local and state governments. I would suggest the following actions be taken:
1.) end all defined benefit pensions and convert to defined contribution
2.) advise the unions that PA is outsourcing all city services that exceed market rates. allow the unions to adjust their negotiation demands to meet market rates. for the one that refuse to bring costs in to line with the market, lay off the employees and outsource the contracts.
3.) for fire union employees the average salary should be $60K and age at which they can receive retirement pay (I don't care when they quit working) should be 65. this is the first group i would like to see outsourced
4.) police should not be outsourced as that type of service is unique (they maintain the social contract) and should be locally managed. but their their budget and benefits should be reduced.
5.) replace politicians who are beholden to the labor unions and value their relationship to the unions above their duty to represent their constitituents. Gail Price is the first one I would like to see removed from office.
Downtown North
on Feb 16, 2012 at 1:59 pm
on Feb 16, 2012 at 1:59 pm
I know it sounds really cool to lower the salaries and benefits for police officers, but here is the reality.
Even at current salaries and benefits, the police department has double digit vancancies and heading higher.
We can't find people who are willing to do this thankless job, get railed on by the public on a daily basis, and get routinely blammed for all the city problems by city hall.
Most of are applicants can't pass the most basic background check, hence the significant openings.
Were not the fire department. We don't get 600 "Qualified Applicants" for each opening.