When the city of Davis originally entered into a contract with their professional labor negotiator on December 6, 2011, the contract with Renne Sloan Holtzman Sakai, LLP, authorizes negotiator Tim Yeung to serve as chief labor negotiator to provide labor negotiation services for the labor negotiations with all the employee groups. It was originally set at $50,000.
It seemed a small price to pay for a professional negotiator in what figured to be a challenging round of negotiations, as the city would be looking to make major reforms to things like pensions, retiree health care, and cafeteria cash outs.
By May 15, 2012, just six weeks before the contracts were to expire, the city asked for an additional $75,000 for the contract. June 30, 2012 came and went without a contract, but by the end of 2012, five of the seven bargaining units had reached agreement with sweeping changes to employee benefits along a range of different components.
There would be two critical hold outs – DCEA (Davis City Employees Association), who had impasse imposed in the last round of MOUs only to have an administrative law judge and PERB (Public Employee Relations Board) overturn it, and the firefighters. The city has already reached agreement with the City’s Management Group, Davis Police Officer’s Association, Professional and Support Employees Association, and Police Management employees
Staff now reports that the “consultant costs have now almost reached the $75,000 maximum amount, and negotiations have reached the fact finding stage with two of the bargaining groups.”
This is the first official word that the city is officially moving toward impasse with the two bargaining units.
On October 9, 2011, California Governor Jerry Brown signed AB 646, which amends the Meyers-Milias-Brown Act (MMBA) “to require certain public sector employers to submit their differences with a labor organization representing their employees to a ‘fact-finding panel’ for impasse resolution.”
Under the new law, the employer covered by the MMBA is able to implement its “last, best, and final offer” after the parties’ respective positions over wages, benefits and other terms and conditions of employment have been presented to the panel, the panel’s findings and recommendations have been made public and a public hearing has been held on the impasse.
According to one analysis, “AB 646 is a significant change to what historically has been considered an informal and undefined process under the MMBA for breaking an impasse between the parties. Indeed, the new law amends the MMBA to impose additional requirements on counties, cities and special districts if voluntary mediation is unable to effectively settle the parties’ dispute.”
The analysis explains, “If the mediator is unable to settle the dispute within 30 days of his or her appointment, the labor organization, but not the employer, may request that the dispute be submitted to a ‘factfinding panel.’ The panel must consist of one member selected by each party, as well as a chairperson selected by PERB or by agreement of the parties. The new law authorizes this factfinding panel to conduct an investigation, hold a hearing, issue subpoenas to require witnesses to appear and testify, and subpoena the production of evidence.”
The analysis continues, “If the dispute still is not settled within 30 days after appointment of the panel, or longer if the parties agree to an extension, the new law authorizes the panel to make findings of fact and recommend terms of settlement, which shall be ‘advisory only.’ “
The analysis continues, “It is questionable whether this new law actually fulfills the bill sponsor’s apparent intent of requiring an employer to submit to factfinding before implementing its last, best and final offer in all cases where the union has requested factfinding. The bill sponsor’s comments regarding AB 646 reference ‘the creation of mandatory impasse procedures,’ giving the impression of an intent to require these impasse procedures (e.g., factfinding and a public hearing) in all cases where a union requests them.”
They add, “the law, as written, arguably does not achieve this goal.” Rather they argue, AB 646 specifically states that “[i]f the mediator is unable to effect settlement of the controversy within 30 days after his or her appointment, the employee organization may request . . . factfinding . . . .”
Because mediation is not required under the current version of the MMBA and, importantly, AB 646 did not change the voluntariness of mediation under the statute, it appears the union may not be able to insist on factfinding in the absence of a failed attempt at settling the dispute before a mediator.
In any event, the cost to the city is going up. The agenda item asks for an additional $100,000 and the city manager writes, “It is anticipated that the negotiations can be completed with this amount of money.”
Impasse can be tricky – even in the days before AB 646. Less than a month after the law was passed, but not bound by the law, the Public Employment Relations Board ruled that the city improperly canceled fact-finding and imposed the last, best and final offer on DCEA.
PERB ruled: “It has been found that the City violated MMBA sections 3503, 3505, 3506, and 3509(b) and PERB Regulation 32603(a), (b), (c), and (g) when it passed Resolution 10-070 on May 25, 2010, before exhausting the fact-finding process set forth in its local rules.
They continued: “It is therefore appropriate to order the City to cease and desist from such activities in the future. Additionally, if the City wants to proceed through its impasse procedures, it must provide adequate time to complete the fact-finding process as set forth in its local rules.”
The city would be forced, after losing an appeal, to back pay the employees of DCEA, plus an additional seven percent The cost was not trivia, estimated to be roughly $800,000 over a twelve-month period.
To offset those costs, last June the city laid off nine employees in the DCEA bargaining unit.
The city will be taking extra care, particularly in light of new laws, to ensure that all processes are followed for imposing the last, best, and final offer on the two bargaining units.
In the meantime, the costs of the failure to reach terms continue to climb. In addition to the $100,000 that will be allocated today, the city estimated a few months ago a heavy cost of more than $50,000 per month in additional benefits to the employees of the two bargaining units.
As the city struggles to deal with increasing structural deficits and to pay for critical infrastructure, the failure of these bargaining units to reach terms will make these endeavors more difficult.
—David M. Greenwald reporting
What a mess. This is government and public sector labor insanity at its’ best.
Private-sector: looks for costly complexity in business decision-making to eliminate it so the company stays nimble, creative and responsive.
Public sector: keeps layering on rules and procedures so that everything is fair.
We elect political leaders to lead. The politicians hire managers to manage. The managers hire workers to work. The politicians work with management to set strategy and implement a plan. The workers have input, but should not be giving decision authority to subvert the plan. In the case of public sector business – especially those with unionized labor – we have completely screwed up letting the inmates run the asylum (sorry for disrespecting inmates and asylums out there).
It is time to eliminate all this screwed up labor management practice and get back to the simple and effective practice of individual employment agreement. These cover the simple concept of an employee providing some value to the employer and the employer paying a market rate for that value provided. Provide more value and get paid more. Provide less value be paid less. Pay rates of pay should be based on a market assessment for the role and the experience of the employee or candidate employee.
Until we rework our mess of public sector compensation practice to be much more like the best practices of the private sector, we will be wasting a lot of money and services like waterworks and road maintenance will increasingly require increased taxation.
Yes, I greatly look forward to a City run like WalMart…especially the police and fire….
City run like Walmart? No. Maybe Target.