It looks like Palo Alto is about to follow in San Jose’s footsteps and is gearing up for a battle that could generate the same kind of acrimony seen last year during the Measures V and W election. The Palo Alto City Council approved a proposal this summer to put a measure on the November ballot that would repeal binding arbitration between the city and its public-safety unions. Currently, when labor negotiations break down between Palo Alto and its fire and police, a third-party panel is brought in to make a final decision. City officials complain this process often burdens the city with future pension debt in return for lower public-safety salaries, while the unions argue arbitration is the only way to force the city to negotiate in good faith. Led by president Tony Spitaleri, the firefighters union responded in August by filing an injunction against the ballot measure with the Public Employee Relations Board (PERB). But the union withdrew its unfair-labor-practices claim after Spitaleri met with City Attorney Molly Stump. Thinking better of it, Spitaleri returned last week with allegations that the city is attempting to hold an “illegal election,” and the union filed a new injunction. The PERB is set to hear both sides in hearings later this month. Palo Alto Mayor Sid Espinosa was the swing vote in the council’s 5-4 majority decision, just a year after he bowed down to union pressure and voted against repealing arbitration from the city’s charter. Call it the difference between being mayor and vice mayor? Depending on how many enemies Espinosa wants to make, though, he might want to take some notes on how San Jose Mayor Chuck Reed managed to get V and W passed. After all, it worked so well in bringing civil discourse to San Jose.
San Jose Inside
San Jose Inside (https://www.sanjoseinside.com)
Just lie to everyone and call it “Fiscal responsibility”as was on the SJ ballot. Seems to me Measure V and W did not do anything other than cause us citizens millions to put it on the ballot. SJ budget has got worse since this election. Save the money and recall your Mayor that is what we should have done!
Seriously Fly? Are you trying to say the V and W package wasn’t such a good idea? or at least the way Reed/Figone and Company at City Hall got what they wanted in the wrong way? Hell, they even corrupted Jose Salcido – a career “union man” into joining forces with them leaving those he fought for (well now it looks like he was only in it for himself) to turn away in disgust!
This is just the type of stuff you “journalista/moscas” thrive on! The creation of acrimony, especially if it undermines the keepers of the “social contract,” is usually considered grade A material!
Must be hard to be a cop in Palo Alto….making all that money for not doing to much…. I feel for the contrasting SJPD
Who in the hell can give the taxpayer an honest answer? The city or the unions? Who is to blame for the taxpayer not getting the most for their money? I read the postings on this web site and all I get out of it is one side berating the other. Is the city that incompetent and evil with some grand plan to rid the unions of their pay and benefits? Are the unions nothing more than a greedy clique sucking the city dry?
I look at my property tax bill with its special assessments and wonder who I should go after! Each of the last seven years, I have paid more but have received less. My street need to be repaved, the park around the corner needs to have its lawn mowed, the school down the street needs more money (another parcel tax!), and the 7-eleven a block over has graffiti all over its walls.
Who can I call and complain to?
You might try complaining to the non profits in San Jose. They seem to be getting money from the city. As recently as a month ago the city once again gave away a million dollars to a non profit. Call them and see what secret they use. All this information is available to you.
Taxpayer,
Don’t trust anyone to get your facts. I thought the same thing until I looked into what other public safety unions in Santa Clara County are getting in terms of pay and benefits. San Jose is not near the top in pay or benefits. Just look and see what Santa Clara and Milpitas make for starters. I believe they want what was promised to them through contracts. From what I read they gave back 10% in pay and the city keeps coming for more. There pensions did not cause the city’s problems. I do not blame them for trying to keep what Mayor Reed and others promised them.
One of the biggest travesties in the attempts at repealing retirement benefits for public safety involved how they got them. For many years San Jose was near the bottom in terms of pay. Every year police and fire would go to the city and tell them they could not compete for the best candidates, nor retain quality employees unless the pay was competitive. The city, not wanting to spend any money, repeatedly agreed to enhance the retirement benefits in lieu of increasing pay. Eventually San Jose had the reputation of having terrible pay but the best benefits. This, combined with a reputation of having nationally recognized public safety agencies, resulted in being able to recruit the cream of the crop.
While it may have seemed smart at the time, it simply kicked the can down the road in terms of immediate costs. It was far easier to promise better retirements to the public safety employees since the cost would be spread over time and of course, not impact the existing politicians would would be long gone before the payments came due. So, previous city administrators signed on the dotted line with legally binding contracts for improved benefits. During the fat times this never seemed to be an issue. The retirement accounts were overflowing and foolish managers ignored historical market trends.
The city could have insured that the retirement funds remained solvent by continuing to contribute to those funds even while the accounts were 100% during the good times. A fiscally responsible city would have over funded the retirement accounts during the fat times knowing that markets always rise and fall. Instead, the city spent money like a drunken sailor in port on entitlements and pet projects.
Now we are faced with paying up on contracts negotiated in good faith by the employees for benefits they have planned their entire careers around. Instead of competitive pay, public sector employees banked on performing decades of service with lower than private sector pay knowing that they would ultimately be rewarded for doing so. Instead Reed and Figone want to default on those promises.
Not only is this downright immoral for the current retirees and pending retirees, it certainly establishes San Jose as a city that cannot be trusted by anyone, especially a potential hiree. If I were job hunting, I would avoid like the plague a city who has established that they have no regard for contractual obligations. This is even more reprehensible as it is being done while Reed and his minions are kissing the ass of every major league sports team and setting aside millions for ball parks instead of taking care of those who work for them.
It is even more pathetic that Reed has hoodwinked a struggling public into believing that the city employees only gained these good retirement benefits through union thuggery, greed and strong arm tactics. This could not be further from the truth. Most of the benefits and working conditions that the city employees now enjoy were readily agreed upon by the city during contract negotiations. Many of the very benefits that the city now whines about were actually proposed by the city at the time to the unions such as the sick leave buyout. This was another city tactic to avoid hiring enough employees to cover sick, vacation, and other absences by workers. Instead, they figured if they offered an incentive to come to work sick, they didn’t have to hire backup employees as people would drag themselves to work thereby negating the need for larger staffing.
The chickens have come home to roost but Reed and Figone have closed the hen house and are pointing those chickens towards the citizens homes. Good luck San Jose, you will be sitting at the same table as Oakland and Richmond soon debating over who has the worst living conditions in the bay area. And of course public safety in San Jose is now a joke. Whereas previously San Jose was held up as a model of how to run public safety and routinely asked to teach others, San Jose is just a has been that invites a chuckle and a shake of the head when mentioned in public safety circles.
yep – you got it all right. on a note about sick leave that everyone is so upset about. for public safety, if someone calls in sick, the city must fill the position—unlike other office jobs. Thus, to allow public safety to accrue sick leave saves the city money by not having to pay overtime. If the city were smart, it would invest a small portion of the money it saves by not paying so much overtime to create a fund for sick leave payout. this would be a win-win; the city would save now on overtime, the employee would get a sick leave payout, and the city would have the money to pay it. This is not rocket science. It makes no financial sense for the city to want to remove the sick leave payout incentive.
Reed and the council sell the city their sick and vacation time each year. They have executive leave they use that prevents the need to use sick or vacation time. So on top of their salary they often get as much as 40k in sick and vacation buy back just another scam to hide their salary from the public. Explain to me how figone is worth well over 10 k a month.
Binding arbitration means that regardless of your ability to pay and arbitrator can award wages and benefits in “parity” with the highest paid jurisdiction in a labor market. Santa Clara and Milpitas do indeed have higher wages and they do this on purpose and actually had a policy to maintain parity plus 10% with SJ so they could recruit and retain good staff.
In the past, many started careers in smaller towns like Palo Alto and then transfered to the larger, more challenging, and more selective department in San Jose to finish their career.
With the changing circumstances, things have reversed course and you can now expect folks to start at the larger SJ depts then transfer to the small jurisdictions to finish their careers, which is the model you see in New York City which starts with lower wages and requires longer to move up with salary steps and benefits vesting. This causes them to lose a significant number of mid-career officers to suburban communities in the area where seasoned officers are welcomed with easier work, higher wages, etc.
One interesting thing I noted from watching the PA council on cable access discuss this was that the whole binding arbitration business was launched by labor statewide but only got adopted by certain progressive communities, which means its not a universal policy. The old notion remains in force that public agencies with their elected representatives running the shop are more inclined to be modeled employers than some private enterprise where stock market manipulations, pension fund raids and exploiting imported and local labor for profit are the norm. I actually concur and would be in favor of repealing binding arbitration in most jurisdiction.
There is, however, a fairness issue in that public safety unions can’t strike by law. While this is troubling, the outcomes of the current rigged system that helped push public safety pensions to totally unsustainable levels require decisive action to correct. In 1999, former Gov. Davis repayed unions (CHP and Prison Guards) with a new tier of benefits that became the highest in the country, which created huge pressure on every jurisdiction to match (since this affected all CA communities as arbitrators could consider this in their labor market.) The arbitrators and system was designed to serve the interests of labor over all others and led to poor outcomes that are now impacting bottom line budget decisions in every community in the state.
I’m also interested in how we can achieve better efficiencies in terms of public safety as we look at reworking all this. Perhaps the Sunnyvale example of cross training police and fire is a better way to go rather than emphasizing medical first responder training (don’t we have a county wide ambulance service that shows up and bills for this stuff.)
Anyway….The list of CA communities with binding arbitration in in single digits, so this isn’t as shocking and weird as you might think. SJ and Palo Alto were outliers in being binding arbitration shops in the first place. But they’ve both always been “special” so ce la vie.
First, just because you continue to repeat a lie does not necessarily make it true. You have clearly been drinking the Reed/Figone Kool-Aid as evidenced by the comment that pensions are “unsustainable.” San Jose’s pension system would not be in nearly as bad of shape had the city been fiscally responsible. There are many cities who continue to offer the same retirement benefits as SJPD and SJFD members have with equal or better pay. They are “sustainable” due to good financial management by those cities. The unsustainable retirement red herring is slowing being debunked. San Jose repeatedly cries wolf on the retirement issue and will continue to do so as long as gullible citizens swallow the lie.
Second, if you support removing binding arbitration you must support the ability for public safety workers to strike. You can’t have one without the other. City leaders have proven repeatedly that they will take advantage of their workers with callous disregard for their well being. Binding arbitration provides balance between the two groups. Removing it takes away any ability for workers to negotiate and thereby renders them susceptible to abuse.
Total Recall also has it right that binding arbitration has rarely been invoked and has always been a last resort. Removing binding arbitration is like the city forcing a homeowner to remove their locks on their doors and then telling them to just trust that nobody will ever steal their belongings. The system isn’t “rigged” as no union has enough power to hold a gun to the city’s head and force them to sign contracts. The city has always had the right to invoke binding arbitration as well. They have chosen not to and willingly signed on the dotted line on every contract.
Had to go back to re-read my post to see what got you so fired up.
So its the unsustainable comment? So a defined benefit is a promised monthly payout for life. Early pensions were started in part to give folks an incentive to leave and make room for folks returning from world war 2. Prior to Social Security and pension it was the norm to work until you physically couldn’t.
I like pensions, I like enjoying retirement while I’m still young enough to enjoy it, I like having financial security and never having to worry about stock market risks and all the other folley’s of our free market retirement junk like 401k type stuff.
The problem is the defined benefit structure. It was built with actuary tables where folks were expected to live until their early 70’s. Retire at 55 or so and draw for 15-20 years and its not that big of a bill. I just helped my Dad celebrate his 80th birthday party and he’s still vital and active. I know another friend who’s a WW2 vet who still goes to work 5 days a week at his jewlery store in his late 80’s. Retire at 55 with 20-30 years in and draw for 20-30 years is a whole different equation.
Also, a lot of these investment funds are kind of shaky in that they aren’t really earning the returns neccessary to provide the payouts for current, let alone future retirees. I think CalPERS is doing okay thanks to really diverse investments, but I’ve heard some rumblings that even the mighty CalPERS might have a huge surprise for State Legislators in about 5-10 years. The promised payouts are a promise that is backing by the taxing power of the state or municipal agency. If there’s not enough in the investment pool, general revenue must go to pay the difference.
Anyway…SJ is not special, most every city/county/state did the “kick the can down the road” trick with pensions starting around 1984 and traded pension enhancements at the bargaining table in lieu of pay increases. This became a public sector best practice (outside of the feds, who went the opposite direction in 1984 with 2nd tier pensions rolled out nationally for all new hires.)
In terms of sustainability, if you hand out enhanced benefits without setting aside enhanced revenue to invest towards paying it, your creating a huge liability. In terms of drinking the cool-aid, its a national problem and SJ is just facing it early because their independent pension system compounds the liability that for others is more diffused (but still there.)
Palo Alto rolled out 2nd Tier pensions about 3 years ago and has already been paying supplemental CalPERS contributions to cover increased life spans and enhanced benefits for current employees. They have not done anything with public safety, however, so this arbitration issue is a step in that direction.
If a public safety officers lifetime earnings were added up looking both at years on the job and years drawing a pension in retirement, you’d come up with a huge number. Then divide that by the number of years worked and you’d come up with something like the real cost of a public safety worker. There’s obviously a big difference between future and present cash in terms of investments in the pension fund, but with 5-7% annual returns, the outputs and inputs still seem kind of problematic.
I suspect we’re actually on the edge of a steep cliff as a nation with ALL these financial problems and there’s a lot of betting going on that inflation will save us but we’re also looking at devaluation of our currency and shrinkage of our economy that threatens to give our children something unpleasant to thank us for.
From what Ive been told ,for binding arbitration to take place, a series of things have to occur including many failed attempts at actual negotiations. binding arbitration is at the end o f the process.in order for binding arbitration to take place : 1)you have to prove/disprove that the city has the monies.2) you have to prove that the city has the ability to pay. it is basically a game of catch me if you can between the city and the unions.the city will cleverly try to hide funds,the unions have to find it and then prove that the city has ability to pay.both side hire their accountants to hide and locate funds
when both sides meet with the Independent arbitor( that they jointly select) they both present their final offers.The aritor has no choice but to select 1 side or the other.they cannot pick some of this or some that, it is all or none. the unions have historically prevailed because ,what they are asking for is in line with what other agencies(P.D. & F.D.) already have. the city loses beacause their requests are so extreme,that its not a viable alternative.
..I am not an expert , just a concerned citizen. it bothers me that Reed has Demonized the unions the way that he has, the unions didnt steal anything……..it was given to them more than likely By Reed(who definetly had a say) , who has sat on council for at least 12 yrs.I dont believe that the unions are without fault, but they certainly dont deserve to be Demonized for what was Given in leiu of raises.
the dual roles in sunnyvale works because it is a much smaller city. I am positive that neither their P.D. or F.D. jointly run the amount of calls that our P.D. & F.D. do , nor would they be able to.seems to me that in a city this size you would have to hire more P.D. & F.D just to keep up with that model.I also learned that when it comes to pay and benefits, it would be a huge bump up for our own public safety. its apples and oranges , sunnyvale is a small city , san jose is a big city……………run like a small town
You hit the nail on the head. The few times arbitration has been required, the city has won some issues and the unions others. The most fair, reasonable proposal is the one that is selected. Thus, the city must have been completely unreasonable or the unions more reasonable to have prevailed.
Also, the Fire Chief at the recent city council meeting, informed the city council that Station 2 in SJ runs more calls than the entire city of Mountain View which has six stations (I think that’s the number). If SJ were to compete with that level of response it would have to hire hundreds of more FFs and open many more stations. How can other cities figure this out but SJ cannot.—Maybe its the rhetoric and its not as bad as Reed, who is staking his political career on this issue, is making it out.
Reed should worry about staying out of jail when everything comes out in court.
When the vote is done the lawyer will descend. The city will spend lots of money trying to hide records. Reed and figone will never let you see the truth even with a court order they will simple say oh the records are lost.
Hopefully someone goes to jail. San Jose could and should be the place where a new government begins.