At tonight’s city council meeting, the council, following a long and tedious process, will finally hold a public hearing to make the determination as to whether they can impose their last, best and final offer to the Davis City Employees Association.
DCEA has be operating for the last two yeears under an MOU that expired in 2009, since the PERB Board overturned the city’s last imposition of last, best and final offer.
On June 2, 2010, the DCEA filed an unfair practice charge with the Public Employment Relations Board (PERB) claiming that “the City did not bargain with the Union in good faith and, more specifically, that the City violated the MMBA [Meyers-Milias-Brown Act] by failing to exhaust the impasse resolution procedures.” An Administrative Law judge would issue a decision finding that the city had not followed proper procedures for imposing the last, best and final offer.
The city appealed that decision but on June 8, 2012, PERB found that the city committed an unfair practice by failing to exhaust its impasse procedures before imposing its last, best and final offer.
PERB ordered the city to make employees whole for all lost wages and benefits and to complete the fact-finding process in compliance with the city’s local rules. The city complied with PERB’s order. The city paid all employees back pay and benefits.
“Since the beginning of these negotiations, the City communicated its need for long-term structural budget changes in compensation costs, particularly pension and medical costs. The City’s negotiation team conveyed the expected increases in CalPERS retirement contributions and in the City’s retiree medical liability,” the staff report reads.
City Position
In a press release late last week, the city indicated, “The public discussion follows last month’s release of the “Opinion, Findings of Fact, and Recommendations” offered by a Factfinding Panel which was appointed to hear the continuing labor dispute between the City and DCEA. As required by law, the City previously made, and continues to make, the Panel’s recommendations available to the public” on the city’s website.
“Under impasse procedures, the City Council is required to hold public hearing for a legislative determination of the issues presented. Following the public hearing, the Council may, but is not required to, implement its last, best, and final offer presented to DCEA,” writes city staff which is recommending Council impose the last, best, final offer, which was previously provided to DCEA.”
The city and DCEA “have been unable to reach agreement on terms of a successor contract, even though several other bargaining groups – representing a majority of the City’s employees – have.”
According to the city release, “DCEA is one of the two remaining labor groups that have not agreed to much-needed economic concessions, particularly in the area of pension and medical benefit cost sharing provisions. Since the beginning of negotiations, the City communicated its need for long-term structural budget changes in compensation costs. The City’s negotiation team conveyed the expected increases in CalPERS retirement contributions and in the City’s retiree medical liability.
“In addition, the City’s budget deficits have been communicated to DCEA at the bargaining table and through numerous public meetings, reports, and budget documents. In response, DCEA expressed concern that the structural changes were too severe economically.”
DCEA Disagrees
The position of DCEA seems to be that there is no evidence that the city of Davis is in financial trouble, and they have produced an audit that suggests the opposite.
The audit was conducted by the San Francisco firm of Backecki, Crom and Company which, from their own declaration, primarily represent public employee groups.
In a June 19, 2013, letter to DCEA President Dave Owens, they explain that “the purpose of this report and the related exhibits is to identify funds that have accumulated cash and fund balances that might be available for General Fund purposes.”
Their findings are that, “The City’s governmental revenues experienced strong growth in the through 2007 was offset by the actual revenue declines the last five years.”
They find, “The City’s most important tax, property taxes, has a fundamentally strong assessed value base and is showing growth in the median value of the City’s residential property.” They add, “Sales tax revenues are also strengthening, and could continue to grow.”
They conclude, “In our opinion, after declining the first three years covered by our report, the City of Davis financial position has improved over the past three years. The City’s two most important tax revenues, property taxes and sales taxes, are strengthening, and could continue to grow. There may resources in other funds that can be used by the General Fund.”
Factfinding Results
However, the factfinder in this case had access to this information and reached a different conclusion.
The factfinder panel found, “The Panel carefully reviewed all of the financial evidence in the record. The Panel concludes that the City of Davis is in adequate financial health. Stated differently, the City is not in desperate financial straits like many other governmental entities in California. The City has earmarked funds to replace aging assets and to deal with its unfunded liability for future retiree benefits.”
However, “There is not much margin for error” and “the DCEA failed to identify a source of money to fund generous pay raises or to retain lucrative benefits such as the PERS [Public Employees’ Retirement System] pick up and no employee contribution to health insurance premiums. Reilly conceded that although the general fund is not broke, the City can reasonably target an unreserved general fund balance at 15%. Also, while he characterized the enterprise funds as healthy, he never opined that they contain excessive amounts of money. Finally, Reilly’s analysis did not consider the water, deferred maintenance and community service challenges confronting the City.”
The panel found, “Therefore, as will be discussed later in our recommendations, the City rightly needs structural changes to the benefits afforded to employees, but it also has sufficient money to provide modest wage increases which are needed to partially cushion the financial sacrifices that the DCEA employees must make.”
City Staff Recommendations
“Unfortunately, the City’s and DCEA’s positions are fundamentally different,” the city writes. “The factfinding panel’s recommendations acknowledge many of the structural changes the City bargain team believes are needed and, although the recommendations urge a more gradual path to accomplishing them, along with additional pay increases to offset benefit reductions.”
Staff recommends the city adopt the following:
- The City shall have the right to assign employees to a 9/80 schedule.
- DCEA shall conform to FLSA overtime provisions: only hours actually worked shall count as hours worked by the employee for overtime purposes.
- Cap at $500 the amount of benefit contribution employees may take as cash in lieu of taking medical benefits with a gradual phase-in, in three increments, for current employees.
- Apply a cost-sharing model for health benefits contribution (City pay first 3% of increases, employee next 3%, 50/50 split when above 6%).
- Employees to pay full employee portion (8%) of CalPERS pension cost.
The city adds, “If Council imposes its last, best, and final offer, City staff will then begin new negotiations with DCEA to try to reach agreement on a new Memorandum of Understanding for the following year or years.”
—David M. Greenwald reporting
Sorry David I was with you til the end!
If the city council adopts the 5 bullets at the end of your article, the union must abide by that? If so, what is the last sentence mean? For the next MOU, there would be an immediate negotiation on the ‘following year or years’ or does that sentence refer to this impasse situation?
Any thoughts on whether the CC will adopt the bullets?
Imposing last, best, final is not the end of the game. That just creates a one year MOU. Then they have to still negotiate a new MOU for three or four years. But the game gets changes because once the new MOU is imposed, the bargaining unit no longer has the incentive to run the clock. The members benefited by dragging this process out as long as they could, that ends with the imposed contract.
“Any thoughts on whether the CC will adopt the bullets? “
4-1 or 5-0 vote
All of the final terms make sense, except for the 9/80 schedule. How does this save money?
the city is being reasonable, how the dcea or firefighters believe there is money to sustain the benefits and pensions is beyond me.
DP
[quote]the city is being reasonable, how the dcea or firefighters believe there is money to sustain the benefits and pensions is beyond me.[/quote]
I have an idea about one aspect of our society that may be contributing. That is a generalized lack of trust.
You have to read no further than these threads to come to the conclusion that there is a well represented group in our community who are inherently distrustful of anyone they perceive as having ( or claiming to have) any kind of authority. This extends not only to governmental officials, but essentially to all “experts” or people who actually have more access to specialized information. Instead of actually considering the concepts and facts, it has become kind of a “blood sport” in our society to dismiss any idea generated by someone whose entire philosophy we do not adhere to. I think this is especially true when one’s own material benefit is at stake.
Is Lucas going to have running water tomorrow?
Did I understand correctly that city employees who opted out of health benefits through the city received an additional $1900/month?
To answer the question to how we (The DCEA) expects the City to have money to pay for our benefits. Quite simply they have haven’t produced any information or evidence that our benefits have or will cause financial issues. It seems the the media in Davis is comfortable with the idea that the absence of evidence isn’t the evidence of absence. Personally, before agreeing to make my Family suffer to avoid the City’s financial collapse, I would like evidence that said collapse is going to happen. It should also be pointed out that what City officials have testified to under oath and what they’ve told the public are not exactly the same.