On Tuesday, the Davis City Council did what they had to do, in fact they did what they were elected to do – make tough decisions with regard to the city budget. The process is broken, it took way too long, it cost way too much money.
But there was no mistake this time – the council dotted their “i’s” and crossed their “t’s.” There will be no 11th hour PERB board ruling to turn this back.
This was a tough job to do by the council. This wasn’t an abstract motion where they were pushing numbers around on a board trying to make things work. They had to look their employees in the eyes, they had to listen to personal sob stories, and then they had to make the right decision.
It’s hard to listen to a man who has given the city his best years, with tears in his eyes, tell you that he may end up losing his house because of this vote.
Unlike the firefighters, this is not a corrupt group that has extracted improper benefits and used the electoral process to rig the results. These are just hard working people who receive among the lowest levels of compensation in the city.
I say all of this because I want people to understand that I understand the hardship that this deal will impose. But, at the same time, these people were either misled by their leadership or part of the problem that led to their ultimate demise.
Each councilmember on Tuesday night made comments about how tough this vote was. Rochelle Swanson called it “one of the worst votes” that we have had to take and added, “none of us wants to be here.”
Not to pick on Councilmember Swanson, but while in a way I get that sentiment, in another way it infuriates me.
Let me explain why that is the case. In early December of 2012, the council voted to accept the contract agreements from five of the seven city bargaining units. Those employees took the same deal – and did so willingly and with the spirit of sacrifice and compromise in hand – that the council had to force DCEA to take.
In the meantime, every single active employee in DCEA benefited, in fact were rewarded, for their intransigence. So why, Councilmember, is it worse to impose on this group?
This has been going on since 2010, before Councilmember Swanson was even on council. DCEA was not willing to take even the meager reforms that that council imposed. So, in the Spring of 2010, that council imposed the 2009 MOU on DCEA.
But they were impatient, they failed to complete the process and so, a year and a half later, the impasse was thrown out by PERB. The city was forced to retroactively pay these employees the difference in the compensation.
Rather than come to a deal, these employees watched as nine of their colleagues were laid off in June 2012. Now, the city was criticized for doing this, but DCEA had seven months from November 2011 until June 2012 to come to an agreement.
What this means is that, from 2010 until December 2012, the employees at DCEA were on the MOU that was agreed to during good times prior to the 2009 MOU, while the rest of the city had to take concessions, modest as they were, in 2009. And for the last year, they had been on that same contract as five of the bargaining units were on a second new MOU with far deeper cuts.
Let us just look at the impact on cafeteria cash outs. Prior to the 2009 MOUs, city employees whose spouses had their own health care could cash out up to about $1700 a month. No other community in the state had as generous a cash out.
In the last MOU cycle, the city reduced the maximum to $1500 per month for existing employees and $500 for all new employees. In this cycle, the number was reduced for all employee groups from $1500 per month to $500 – which still larger than most jurisdictions.
For those employees fortunate enough to have a spouse with a health care plan, it was like an additional $1500 to $1700 a month in salary. The impact of losing $1000 to $1200 per month is huge, and should not be made light of.
However, the DCEA employee group had to know this was coming. This was not out of the blue. The employee groups have had several years to plan and the city is giving them more time.
As the factfinder noted, “The City proposes that the current maximum monthly cash out of the cafeteria health benefits be capped at $1,000 per month upon implementation of the Agreement; at $750 per month as of July 1,2014; and at $500 a month as of June 30, 2015, for all current employees. The City proposes an immediate cap of $500 per month for new employees.”
As the panel noted, “The Panel holds that this benefit is ripe for reform. First, it is discriminatory. The cash payout in lieu of health insurance favors those employees who happen to be fortunate enough to have access to health insurance through another source. An employee who is unmarried or does not have a working spouse (or the spouse’s employer does not provide health benefits), must forego the cash and obtain coverage under the City’s plan. Thus, the benefit is inequitable.”
The factfinder panel proposed a “more gradual” process to reach the $500 cap, but the city rejected those findings. The employee groups who already agreed to both contracts have already severely ramped down their contributions.
This is a critical reason why there should not be heartbreak by council. First, DCEA benefited (except for the nine employees laid off by holding out). Second, the other bargaining units took the same deal that was imposed on DCEA. Third, DCEA employees should have been prepared for these cuts and started taking steps to save money and cut back on their voluntary expenses.
The bottom line is yes, it is hard to cut salaries and yes it is hard for the employees who salaries are cut, but across the state everyone has had to do it. DCEA, in a way, gamed the system. In fact, because of the city’s screw up, they lived for some time on the pre-2009 MOU. They benefited with higher pay and benefits for four years.
We should be praising the employees who played by the rules, not lamenting having to impose a contract on those who refused to play by the rules and benefited from their unwillingness to bargain.
—David M. Greenwald reporting
so done deal now David? Or ???
and Where are we in the long process with the last group, the FF?
What do you mean they didn’t play by the rules. It was the city who didn’t play by the rules and that is why the city had to pay back pay and it took so long. These guys, who work for the lowest paid bargaining unit in the city structure, were in a no win situation and chose the path of most resistance to get as much as they could as long as they could. You may have no sympathy for them but I do because they took a pay cut. It always sucks to take a pay cut. Just because they didn’t bend over and take it and instead fought back for the welfare of themselves and their own families you want to condemn them when instead you should be mad at the people who screwed it up the first time and had it handed back to them by PERB.
These guys are working class heroes not some never sweat office managers or lawyers. Yeah they had pretty good contracts but you can’t even argue they were part of Romney’s 47%. They go to work and keep our city functioning. Its not their fault that Davis never adjusted its contract on medical benefits until this last round of negotiations. Put the blame for our fiscal situation where it belongs on past councils who refused to make the tough decisions but not on the people who earned their pay by going to work.
You may not feel anything for these people but you didn’t have to face them and make the vote on a situation you didn’t create. Nobody ever likes taking a pay cut its never easy to tell your family you’re going to have to tighten the belt or move to a cheaper place or stop paying for a kids education or whatever. It wasn’t pretty but the City Council did what it had to do and their humbleness, humility and attempts at empathy struck the right tone on behalf of the community.
SODA: Yes, it’s over now for DCEA. The contact is imposed, now they have to negotiate a contract long term, but the rules have changed. The city no longer needs to impose a contract, the contract is in place.
TOAD: Point being, DCEA benefited by not coming to an agreement, the council shouldn’t have heartache over it any more than the other MOU approvals
New contract negotiations start now? Will prior impasse results favor city for new contract? would think so….
and FF?
The contract is only for a year. So they need to get a longer term deal. The difference now however is that instead of being on an employee favorable contract, they will be on the employee favorable contract.
?employer
[quote] The difference now however is that instead of being on an employee favorable contract, they will be on the employee favorable contract. [/quote]A difference w/o a distinction?
That being said, the imposed contract does something else that you failed to note, and which is significant… the other groups agreed to pay the full employee share of PERS, while having it phased, and getting salary increases that offset or slightly exceeded the ‘loss’. Not true for DCEA. A straight 8% hit, with a “maybe” 3% offset IF (and only if) they made concessions on retiree medical that appear to be in excess of modifications other groups accepted. Apples and oranges.
And on the other side of the world, the Swiss are voting on whether or not to cap a CEO’s salary at 1:12 compared with the lowest paid company employee.
Again, my very unpopular opinion that the disparity between what the most affluent and the least affluent workers amongst us make is a disparity for which there is no possible justification. Note I am not saying that the city council members are in any way responsible for, or beneficiaries of this differential, what I am saying is that we, as a society have made the decision to glorify some positions and to degrade the value of others, even though the lesser compensated individual may be doing a task of major greater benefit to society.
We could save ourselves much emotional grief if we were willing to compensate in such a way as to provide a decent living for all before providing a luxurious living for the select few.
Fire away Franks !
Jumpin on the hate band wagon.I hear a lot of punish the DCEA for not taking the hit and falling in line. What I do not hear is anything about how the FACTFINDER found that this city is not in the same condition as other cities, that this city still has reserves because previous city councils did plan ahead. City councils that reached agreement with DCEA.
DCEA never took the stand that they were totally against the needed structural changes, they just dared to ask questions, questions like can you show us where these numbers you are asking for came from?
Yes the DCEA has been imposed on, yes they are now going to feel the pain because they had the nerve to ask questions other groups didn’t, like how much is needed in cuts. Questions like why doesn,t a council member, or all members sit in on negotiations and explain it.
I would not rejoice if I were a citizen of Davis. I would be thinking about the fact of what has transpired in Davis the last several years, cuts in pay, benefits and manpower to Police and Fire, and now your Blue collar work force. These cuts were desperately needed in other cities immediately, but if you look at the Fact Finding, the city would have gotten these cuts from DCEA, just over a couple of more years. Where is the urgency? Didn’t the council just give themselves a HUGE raise? 70% I believe.
DCEA is guilty as charged, of asking for the proof of the urgency. The Fact Finder did not find that fact.
The citizens of Davis had a rather unusual work force at one time, a majority of long term employees. This has changed in recent years with retirements and cuts. I can factually say even today the crews in Public Works have long term experience in their respective fields, Water,Sewer, Transportation, experience in this city, the city of Davis.
Now the playing field is being leveled. The economy is turning around. Cities in which the employees actually live are starting to hire. I do not want the citizens of Davis to misunderstand what I am saying. Had the city and the DCEA gotten to this point with open communication, and that nasty word ‘transparency’ that keeps coming up, I think the employees would not feel the sting nearly as bad.
Read the Words Fact Finder. There was a Fact Finding, by an impartial Fact Finder. This included financial records. The DCEA agreed to go along with the Fact Finders report. The City Council rejected the Fact Finding report and imposed. Nothing could be clearer to the citizens of Davis.
believe the multiplier factor has or is done in Japan….part of the history of the Quality Movement there. I like it…..
but then I wear Birkenstocks, Frankly.
Sorry typo in my post, second one should be “employer” not employee.
Brown: They are not being punished. They have received the same contract as everyone else – I just have no heartache over that imposition.
Thankfully your opinion means nothing to me. I just hope the citizens of Davis who are important to me see through the smoke and mirrors laid down by powers to be.
[quote]They are not being punished. [u][b]They have received the same contract as everyone else[/b][/u][/quote]
[quote]That being said, the imposed contract does something else that you failed to note, and which is significant… the other groups agreed to pay the full employee share of PERS, while having it phased, and getting salary increases that offset or slightly exceeded the ‘loss’. Not true for DCEA. A straight 8% hit, with a “maybe” 3% offset IF (and only if) they made concessions on retiree medical that appear to be in excess of modifications other groups accepted. [/quote]Not true. And you still have not addressed the FF contract. They agreed to pay the full employee contribution to PERS years ago, but got that back in salary and then some (big time). You are either misinformed, David, or have an axe to grind.
PASEA broke off from DCEA years ago, because they did not want to be ‘dragged down’ by not getting a better deal than the field/maintenance folks. Chickens came home to roost, and now I strongly suspect that the CM & HR director are listening to PASEA, Police & Management units who want “payback”, beyond what they agreed to.
BTW is it a coincidence that both the Police member and the general Management member of the fact-finding teams have both received re-class/promotions in the last 3 years?
“Point being, DCEA benefited by not coming to an agreement, the council shouldn’t have heartache over it any more than the other MOU approvals”
What makes you think there wasn’t heartache about the other deals? They just didn’t have a bunch of angry people staring at them on those other votes.
My problem with you is you think its all so easy. Yeah, when you’re a self employed pundit its easy, not so much when you are the person who actually has to take the vote or the pay cut.
[i]Fire away Franks ![/i]
It is so nice to get to reflect on medwoman’s socialist ideas with my morning coffee.
So, let’s take that Swiss idea and put it into practice in the USA… previously the only country where you could become a wealthy CEO without needing neither a pedigree nor any direct favors from friends and family in government.
But let’s not stop with the CEO. We would have to include all those wealthy liberal entertainers also. And professional athletes. We would also need to include cardiologists and stock brokers.
What would the impact of this be?
First, we would have to consider the hit to the Treasury.
Using the liberal entertainer for example, today that $25 million payday for their leading role in a movie production would net the federal and state government (assuming they live in California where most of them do live) about 50% (that would be their marginal tax rate… US rate of 39.6% for all income over $400,000 plus CA rate of 10.3% for anything over $1 million) or $12,500,000 in tax revenue. But given the 12:1 rule they would be paid $720,000 (assuming a $60,000 salary for the lowest-paid professional film crew job). And the marginal tax rate for that amount would probably drop to about 40%. So the government takes an immediate tax revenue haircut of $12,212,000.
The company retains another $24,280,000 in salary reduction which after they take advantage of the byzantine tax codes to reduce their tax liability and get hit with an effective corporate tax rate of 12.1% (liberals might want to reconsider their opposition to flat tax rates). And so the government gets a whopping $2,937,880 out of that previous $12,500,000.
So, by implementing meds’ Swiss idea, the wealthy make a lot less, the low paid worker does not get anything other than some tonic for his wage envy, and the government takes a huge tax revenue haircut.
But of course meds has another idea to add to the Swiss idea. Instead of keeping that low-paid worker at $60,000, she would take that $25 million pay going to the liberal entertainer, and distribute it among all those lower-paid workers. So, instead of $60,000 for a film crew position requiring a high school diploma and five years of experience, the studio now pays $175,000 (hypothetical… may be more or may be less).
Here is where meds’ socialism dreams start to really break down. Since a lowly film crew position pays $175,000, we see an overwhelming supply of people competing for the job. Other higher-skilled, higher-responsibility, higher-stress jobs cannot be filled because they do not pay enough of a differential to motivate people to pursue them. $175,000 is good enough. Due to the lack of adequate skilled and talented people at these higher-end, higher-skilled roles, the quality of movie production falls and consumers stop spending as much money on their products. The fall in revenue requires the studios to first reduce pay, and then start laying off people. The entire industry shrinks. Eventually another country starts producing higher quality entertainment, and US consumers start purchasing those products.
In the end, the US loses jobs for its people and the tax revenue derived from once was a thriving entertainment industry.
Ever wonder why we don’t get much high quality entertainment from collectivist states?
Such and contrast in the Council meeting with all the empathy pouring out for the DCEA employees, and then the Council votes to give away a potential $100 million dollar city asset.
Too bad the DCEA employee are not informed enough to probably even recognize the connection and the irony in these two Council actions.
I’m hoping this marks an end to the publisher’s claims of being pro-labour. It is clear that the DCEA has played by the rules, to their benefit or otherwise and the city council did not. David’s intentionally deceptive,”We should be praising the employees who played by the rules, not lamenting having to impose a contract on those who refused to play by the rules and benefited from their unwillingness to bargain.” would paint them with a tarred brush.
Biddlin ;>)/
[quote]And for the last year, they had been on that same contract as five of the bargaining units were on a second new MOU with far deeper cuts.[/quote]
I’m assuming that this did not set well the with 5 other bargaining units?
[quote]Prior to the 2009 MOUs, city employees whose spouses had their own health care could cash out up to about $1700 a month. [/quote]
I’m not begrudging anyone it, I but I’ll admit to being very surprised by how high this number is.
[quote]The cash payout in lieu of health insurance favors those employees who happen to be fortunate enough to have access to health insurance through another source. An employee who is unmarried or does not have a working spouse (or the spouse’s employer does not provide health benefits), must forego the cash and obtain coverage under the City’s plan. Thus, the benefit is inequitable.”[/quote]
This is a tough one. I’m assuming this saved that city money? That providing health care for an employee was more expensive then the $1700 buy out.
[quote]This is a critical reason why there should not be heartbreak by council.[/quote]
I’m assuming the heartbreak they speak of apply’s to all the city employees.
[quote]Such and contrast in the Council meeting with all the empathy pouring out for the DCEA employees, and then the Council votes to give away a potential $100 million dollar city asset.
Too bad the DCEA employee are not informed enough to probably even recognize the connection and the irony in these two Council actions.[/quote]
Oh sure Frankly, like you would have seen any of this money go toward employee benefit plans.
[i]Oh sure Frankly, like you would have seen any of this money go toward employee benefit plans[/i]
I’m just making the point that the DCEA and the FF and the police and other city employees are losing in part because the city has the justified position of heading toward severe budget deficits… and these looming deficits are in large part because we do not take in enough revenue.
You would think these employees would have been the first at the podium making the case that the city should stop its expensive mission to collect open space and build a farmland moat around the city, and instead put priority on land-use planning that results in more revenue for the city so it can pay its bills.
The problem with city employee compensation reductions is not really connected with the fairness and reasonableness argument. City employees will lose that argument every time. Even teachers will have a hard time given their relative hourly rate and benefits packages compared to comparable private-sector workers.
The problem is the pain of having to go backwards.
Humans are not wired to go backwards. They naturally pursue their hierarchy of needs… essentially climbing the ladder toward self-actualization. What we do when we start taking pay and benefits away from them is to essentially push them down the ladder that they have been working to climb. That really sucks… even if it is justified.
In reality, they had been standing on false rungs of the ladder. They had been propped up by politics and unionization. But nevertheless, it still sucks being told that you had not really earned your level of needs achievement, and that now you need to go back to worrying about those lower level needs you thought you had conquered.
And your attitude about work is tarnished.
In the private sector we rarely reduce pay and benefits. We will require greater benefits cost sharing as the costs rise, but very few companies will go to their employees and make them take a haircut because the company decides the employees are overpaid, or that the budget requires it. The reason no company would do that is that the moral of their employees would suffer and worker resentment would fester and those employees would be less productive and would in-fact damage the company further. What private companies would do is lay workers off (based on an assessment of need and merit)and require the remaining workers to take on more work and have the opportunity to earn greater incentive pay.
That sucks too. But it the better of two choices for a number of reasons.
But we don’t get to do that with unions in the way. These workers have their job security wrapped up in a legal bow.
But again, they don’t see it or care about it because they are human and humans don’t like to be pushed back down no matter how they achieved their level.
My point here though was that it is just ironic that so many city employees are also willing and able to let that expensive farmland moat continue while the city tells them we don’t have enough money to keep up their level of pay and benefits.
Frankly
To be frank, private sector lays off employees much more than public sector. Lose a contract, lay offs. Expenses high, lay offs. That is a big difference I see. Not good in any sector but I think public employees are protected in this area. Comments?
[quote]These workers have their job security wrapped up in a legal bow. [/quote]
I don’t think that this is inherently a bad thing. The idea that union workers aren’t motivated to excel in there job because they there is no incentive too, assumes that people are only motivated by extrinsic factors, (getting promoted and making more money). I believe that many people are motivated to work hard by intrinsic factors, like a sense of personal responsibility or pride in their work.
Take teachers as an example, many teachers work many additional hours then they are contracted to. These extra hours do not get them overtime pay, a chance at a raise or promotion or an increase in job security. What then motivates them to put in these extra hours? My guess, they are inspired by as intrinsic motivation to do a good job. You could argue that because teachers have limited extrinsic reasons to do a good job, it attracts people who are intrinsically motivated, and I prefer these people to teach my kids. I think the same could be argued for any unionized job.
“Oh sure Frankly, like you would have seen any of this money go toward employee benefit plans.”
That money would have gone somewhere.
[quote]That money would have gone somewhere.[/quote]
I know, just trying reach my daily Frankly jab quota.
Intrinsic factors will motivate new employees and a small minority of long-term employees. But on average after about 7-8 years most people gravitate to “it’s just a job”. Unless their job is ever changing and challenging with newness like meds’s. job.
[quote]The company retains another $24,280,000 in salary reduction which after they take advantage of the byzantine tax codes to reduce their tax liability and get hit with an effective corporate tax rate of 12.1% (liberals might want to reconsider their opposition to flat tax rates). And so the government gets a whopping $2,937,880 out of that previous $12,500,000. [/quote]
You started off fine, but didn’t follow through.
First: that $25M “salary” for Tom Hanks isn’t a salary, but a contract. Although Tom Hanks probably isn’t working as Tom Hanks Sole Proprietor, the staff at Tom Hanks Inc. can probably be pared down to 1 employee (known affectionately as “Mr. Hanks”), with a bunch of subcontractors to handle the details of Tom’s busy life (accountant, attorney, agent, business manager, etc.). So Tom doesn’t have much to fear from a 1:12 cap.
Second: I don’t know the details of the Swiss initiative, but if implemented in the U.S. (highly unlikely, give the political realities that pertain) it would probably apply only to publicly-traded corporations. Again, Mr. Hanks is in the clear.
Third: The $24M salary reduction realized by the company isn’t going to sit in the bank forever. Apple, Inc. not withstanding, most public companies are going to distribute that money to shareholders at some point, and those individuals will have to pay taxes on it. Even when you account for pension plan stockholders, that money is going to work its way down to taxable income somehow. So the net loss to the Treasury is going to be much lower than quoted above, if not entirely a wash.
At any given point in time it’s a closed system, and squeezing the balloon in one place is going to expand it in another place. The tax man watches the balloon very carefully — though he’s paid off to turn a blind eye to certain spots — and is always ready to collect his share.
[quote]In the private sector we rarely reduce pay and benefits. We will require greater benefits cost sharing as the costs rise, but very few companies will go to their employees and make them take a haircut because the company decides the employees are overpaid, or that the budget requires it. The reason no company would do that is that the moral of their employees would suffer and worker resentment would fester and those employees would be less productive and would in-fact damage the company further. What private companies would do is lay workers off (based on an assessment of need and merit)and require the remaining workers to take on more work and have the opportunity to earn greater incentive pay[/quote].
FYI, the family owned company my husband work which has finicially stuggled with retirement fund costs (used to pensions) and increases in health care costs, has not laid off a single employee in time he has worked there (almost 15 years). They could probably handle the amount of work they have with fewer employee’s, resulting in more profit, meaning a larger paycheck and yearly bonus for my husband. He could probably find a job at a different company that is more profit driven and where his paycheck would be larger. But the reasons why his company has chosen not to lay off employee’s, because they care about these people, they care about their families, are the same reasons my husband enjoys working for this company, they care about him and they care about his family, and that is worth more to him, and us, then a larger paycheck.
[quote]Intrinsic factors will motivate new employees and a small minority of long-term employees. But on average after about 7-8 years most people gravitate to “it’s just a job”. Unless their job is ever changing and challenging with newness like meds’s. job.[/quote]
I can see where this would be true in cases were jobs are not mentally challenging or monotonous. (I don’t think it applies to teachers though.)
frankly
[quote]In reality, they had been standing on false rungs of the ladder.[/quote]
I agree with your statement, but define the ladder with false rungs differently than you do. If we as a society provided for the basics for all our citizens, then no one would have to struggle to achieve life’s basic needs as long as they were contributing in some fashion to the well being of the society. If we were compensated equally for our time, people would doubtless have more ability to explore and discover what is truly exciting for them thus having a greater chance of not having their work become routine thus promoting mediocrity. I can easily see working as an ob/gyn four days a week and teaching reading or English as a second language ( yes, I have done both) on the fifth day. We could build a ladder based on contribution of time as opposed to our artificially constructed value based “ladder” that puts jobs such as doctor above the equally necessary and probably less pleasant job of garbage collector when both are clearly needed by society.
We could redefine our values and restructure our society. We have done it before when we ended slavery. But it would be necessary to stop saying it isn’t possible.
Frankly
[quote]But it the better of two choices for a number of reasons.
[/quote]
The question here is “better for whom” ? Certainly not for the individual who loses their job. Particularly if the individual who loses their job is an older employee who has limited future job options. You may feel it is better because you actually believe in that saying “creative destruction”. To me this phrase makes a mockery of the fact that there is no “creative” but only destruction for the person whose life is ruined.
Most of the people I know that have laid off end up in a better situation.
Frankly
[quote]Most of the people I know that have laid off end up in a better situation.[/quote]
I am sure that is a comforting thought, but unless you have numbers to back it up, it remains nothing but a reassuring personal anecdote.