DCEA President Owen Lays Out His Bargaining Unit’s Perspective on Layoffs and Budget Cuts

Owen-DavidThe city of Davis acted quickly to fill the hole left by the PERB (Public Employment Relations Board) invalidation of their imposed labor contract on DCEA (Davis City Employees Association) by laying off nine employees and reducing the hours of three more.

The Vanguard spoke with DCEA President Dave Owen on Tuesday afternoon, prior to the city’s release of their contract but after the bargaining unit leader had learned of the PERB ruling.

At that point, Dave Owen did not know where contract negotiations stood between the two sides.

“With the new PERB finding, part of their resolution of this is to go back to fact-finding,” he said. This is in addition to making the union whole, something that the city estimates will cost them $800,000 to $1 million.  “I don’t know what that does to our current negotiation – if we have to go back to fact-finding on the last one.”

“This is a wrench in the mechanism that did not exist yesterday,” he said.

Dave Owen did not want to get into the specifics of an ongoing negotiation and collective bargaining process.  So he outlined his concerns in a series of hypotheticals.

“Let’s say you have an employer and you sit down at the table with employees, and the employer says we have problems and we need your help financially,” he said.  “So the employees ask how much help do you need and the employer answers, ‘I don’t really know, it’s complicated.’ “

“That leaves the employee wondering, what am I doing here, we’re just shooting in the dark,” he said.  “Not a lot of headway gets made.  In that world, what do you do?”

Mr. Owen contends that, while the negotiators for the city have argued that the city needs help, they have not laid out how much help they need, at least not during the negotiating sessions.

“That’s kind of where we’re at,” he said.

In order to understand the place that DCEA finds itself in, it is important to understand that this is not the bargaining group of people making $150,000 in total compensation who got a 36% pay increase in the last decade.

“When you take workers that are making $50,000 to $60,000 and you tell them, ‘we need you to contribute 20 percent towards a benefits package but we also need you to do these other things which could mean a hit of anything from zero percent to upward of 20% for some of your employees on top of that other 20,’ ” he said.

The reference here is to the cafeteria cash-out plan, that currently pays employees as much as $18,000 a year to take a cash-out rather than to receive the city’s health care package.  But it is an uneven benefit, only going to those employees who are covered under their spouse’s health coverage.

The city is looking at this as a way to reduce overall costs by restricting the benefit to $500 per month, which would be $6000 instead of $18,000 over the course of the year.

Given that it is a benefit that perhaps unfairly benefits some employees and not others, it has been targeted for cuts.

But, as Dave Owen explains, it is not that simple from the employees’ perspective.

“That’s just a position that the hypothetical employee cannot fulfill,” he said.  “All employees have a lifestyle that they would like to be able to continue.  Parents like to know that they can send their children to school.  Just simple aspirations to live that, when you start taking huge cuts like that, it’s just not doable.”

“It’s not just something you can say, I can do that,” he said.  “You need the employer to get more realistic about what they need.  As of yet, that’s a problem.”

Some have argued that the employees should take concessions in order to save jobs. For instance, the city has posited that concessions could save the nine laid off DCEA workers their jobs.

However, Dave Owen has a couple of responses to this.

He believes that those jobs will be gone one way or another, whether or not the bargaining unit grants the city concessions or not.

At the same time, in his mind, taking concessions reduces the compensation to the point where employees would question whether the job remains one worth taking.

“We want to know that the jobs that we save are worth having – that you can feed your family and take care of your household on what’s left of what you’re being paid, your compensation,” he said.  “So if you have grown your organization to the point where you can’t sustain it, then you probably do need to shrink your organization.”

“Having said that, you’ve got to keep in mind that this is a pie with many segments,” he said.

He explained that if you look at the DCEA segment, 1% is around $115,000.

“With the nine layoffs that are being accomplished, and by the way there are reductions in hours for three other employees,” he said, noting that two were cut to 75% and one was cut to 50%.  “When you are cutting a job back to 50% you’re pretty much eliminating it.”

“In this, they have actually accomplished over $1 million in savings,” he said.  “That goes quite a ways towards your seven million for just one [bargaining unit] out of seven bargaining units.”

However, the city would argue that was the savings that was supposed to be gleaned from the last bargaining process.

Dave Owen does not see it that way, however,, reminding the Vanguard that these are ongoing and annualized cuts, whereas the $800,000 the city lost was one-time money paid back to the bargaining unit.

“You’re capturing what you imposed, but you’re also capturing that million dollars in the future,” he said.  “So you got $6 million to pick up and other bargaining units to talk to.”

Mr. Owen acknowledged that he now believes that the city has realized their savings with DCEA and should move on to the next bargaining unit to get their share of the pie.

“We have taken a hit,” he said.  “Granted the other bargaining units gave concessions up., so basically we’re all pretty much on a level footing apparently.  So it’s a matter of looking further and getting down to what you really need and presenting that to your employees.”

“There’s got to be someone at city hall that can give you an exact figure that they need to accomplish with these bargaining units to get to where they need to be,” he said.

“What I’m afraid of,” he added, “is that you’re never going to get there.”

He pointed out that we have taken the size of city government from 445 to 376 in terms of number of employees.  DCEA correspondingly has dropped from a high of 118 to now 87 with the new layoffs.

“How low do you need to go to get to where you can sustain what you’re doing?” he asked.

The city’s market survey found the DCEA bargaining unit to be about five percent low in terms of compensation.  The unit ranks even lower than that in terms of salary.  However, the benefits package makes it more competitive.

“You get to the point where the employee needs clarification on what does the future look like,” he said.

He said that he has heard the term “unsustainable” floating around the last several years, but there has been little discussion as to what sustainable looks like, “so that the employees know what to look forward to so that the employees can make their own decisions on is this where I want to be, do I need to look elsewhere or does this look like something that, yeah, I can live with.”

“If you’re looking to move forward, that’s where we need to get down to is a honest discussion of what the future looks like for us,” he said.  “As of yet we haven’t had that.”

Mr. Owen last year asked for the council to have a member or two to sit in on the labor negotiations.  He wanted to ensure that the council was accurately informed as to what was being said during negotiations.

The employees back in 2010 claimed that the council was not be accurately informed about what was being said during negotiations, however, the council never took up Mr. Owen’s invitation.

“I saw Councilmember Greenwald make a statement that they have been told not to be involved,” he said.  “That causes a disconnect and I don’t think that it’s helpful.”

Their ultimate goal is a multi-year contract that they can live with.

“To get there we need some honesty and we need some real target, a hard solid target that we can work towards, not just darkness and take shots,” he said.

The other day, City Manager Steve Pinkerton presented his side of the story in the article, “City Reduces Staff to Stabilize Budget.”

—David M. Greenwald reporting

Author

  • David Greenwald

    Greenwald is the founder, editor, and executive director of the Davis Vanguard. He founded the Vanguard in 2006. David Greenwald moved to Davis in 1996 to attend Graduate School at UC Davis in Political Science. He lives in South Davis with his wife Cecilia Escamilla Greenwald and three children.

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80 comments

  1. Some of the statements by Mr. Owens I find very troubling:
    [quote]Some have argued that the employees should take concessions in order to save jobs, for instance, the city has posited that concessions could save the nine laid off DCEA workers their jobs.

    However, Dave Owen has a couple of responses to this.

    He believes that those jobs will be gone one way or another, whether or not the bargaining unit grants the city concessions or not.

    At the same time in his mind, taking concessions reduce the compensation to the point where employees would question whether the job remains one worth taking.

    “We want to know that the jobs that we save are worth having – that you can feed your family and take care of your household on what’s left of what you’re being paid, your compensation,” he said. “So if you have grown your organization to the point where you can’t sustain it, then you probably do need to shrink your organization.”[/quote]

    You want to know if the jobs saved by making concessions are “worth having”? Really? Tell that to the 9 people from DCEA that just got let go, or the myriads of people out of work. In today’s tough economic climate, to have any kind of a job is a wonderful thing.

    [quote]Mr. Owen acknowledged that he now believes that the city has realized their savings with DCEA and should move on to the next bargaining unit to get their share of the pie.

    “We have taken a hit,” he said. “Granted the other bargaining units gave concessions up., so basically we’re all pretty much on a level footing apparently. So it’s a matter of looking further and getting down to what you really need and presenting that to your employees.”[/quote]

    In other words, it sounds as if what is being conceded is that DCEA should have taken the concessions every other bargaining unit took – just to be fair.

    [quote]He said that he has heard the term “unsustainable” floating around the last several years, but there has been little discussion as to what sustainable looks like “so that the employees know what to look forward to so that the employees can make their own decisions on is this where I want to be, do I need to look elsewhere or does this look like something that, yeah I can live with.”[/quote]

    In other words the DCEA should be the one to decide what they think the city should call “sustainable”? It doesn’t work that way. The employer tells the employee what salary it can afford to pay, and the employee decides whether it is enough. If the employee doesn’t think its enough, they can feel free to go elsewhere, but elsewhere there are no jobs…

    [quote]Their ultimate goal is a multi-year contract that they can live with.[/quote]

    The city’s ultimate goal is a multi-year contract that it can afford!

  2. Elaine:

    I’m going to argue Mr. Owen’s perspective here:

    1. He is suggesting that if the group took the concessions, all employees would be unable to live on those salaries and therefore they prefer the layoffs. It would be interesting to ask the employees laid off what their view is concessions versus layoffs. I don’t think we should presume to know their answer as you do.

    2. “In other words, it sounds as if what is being conceded is that DCEA should have taken the concessions every other bargaining unit took – just to be fair. “

    I don’t believe he’s saying that at all. He’s saying that the layoffs puts them even with the other units concessions.

    3. “In other words the DCEA should be the one to decide what they think the city should call “sustainable”?”

    I don’t think he was saying that, but he did say he’d like to know what the city considers sustainable.

    4. “The employer tells the employee what salary it can afford to pay, and the employee decides whether it is enough. If the employee doesn’t think its enough, they can feel free to go elsewhere, but elsewhere there are no jobs… “

    That is actually what I believe Mr. Owen was at least hinting at.

  3. [quote]… to have any kind of a job is a wonderful thing.
    [/quote]Yes, but if the contribution made by the position has little value, particularly compared to others, isn’t that “welfare”?

  4. To dmg: And what I am telling Mr. Owen (and your attempts to present his side) is that his arguments are not particularly compelling…

    1) Do you honestly think the laid off employees prefer to be laid off than for DCEA to have made concessions so that all could have stayed employed? Really?
    2) If layoffs puts DCEA “even” w the other units concessions, then that IMO concedes it was the fair thing to have done for DCEA to have made concessions like all the other bargaining units did…
    3) The city I assume has made quite clear what it considers “sustainable” by asking the DCEA to make certain concessions or else 9 of your members will have to be laid off…
    4) It sounded to me as if Mr. Owen does not fully understand that DCEA is not in a good bargaining position in the current abysmal economic climate…

  5. Hpierce: I’ll take that as a compliment.

    Elaine: I am not weighing in on his arguments – at least at this time. I do feel compelled to insure that his viewpoint is accurately represented here.

    1. Elaine, I don’t know. Let’s say you are getting $50,000 but also the full $18,000 cafeteria cash out, would it be worth it to keep your job if you have to go down to say $45,000 for base salary and $6000 for the cash out (a loss of $17,000 in take home income), then you have to pay more into PERS on top of that. I am not weighing in on whether I would personally do that, but it seems to me it’s at least a tough call to make versus trying to find another position in this economy.

    2. I don’t think he’s conceding that point.

    3. I don’t know if I have ever seen sustainable plainly articulated.

    4. I think he understands that they are between a rock and a hard place. We spoke at great length afterwards and he’s very down.

    He feels like the bargaining unit has done what was asked of them over the last decade plus and were basically lied to and let down by city leadership who failed to mind the store.

    In my opinion, DCEA and PASEA are really mainly innocent victims to the fiscal mismanagement of the city in the last 12 to 15 years.

  6. [i]”4. “The employer tells the employee what salary it can afford to pay, and the employee decides whether it is enough. If the employee doesn’t think its enough, they can feel free to go elsewhere, but elsewhere there are no jobs… ” [/i]

    It is not that there are no jobs, it is that there are no jobs that would pay these employees, given their job skills and experience in their role, anything close to what they are making today. Which is illustrative of the problem and evidence that they are over-compensated for what they do.

    What does an arborist tree trimmer make in the private sector?

  7. [i]Yes, but if the contribution made by the position has little value, particularly compared to others, isn’t that “welfare”?[/i]

    Good question hpierce. There are many things the government spends money on that I think qualifies as welfare. Farm subsidies come to mind.

    With respect to public-sector employees, I think over-compensation (paying more than market rates) and overstaffing (supporting services not valued by the public, or having more employees than required for the current best-practice efficiency), I can see that as a form of welfare also.

    However, the bigger problem I see is the political connection and the corruption it causes the democratic process. Public employee unions directly sit at the public negotiating table to determine spending priorities. Union employees ARE government, and hence government is sitting on both sides of the negotiating table. Non-union citizens do not have a seat at the table… and hence do not have direct influence. Neither do farmers… they most lobby to indirectly influence and hope for a favored decision on the legislative floor.

    So, not only is this, public employee unions, a potential form of welfare (over-paying and over-hiring), it is a form of political corruption.

  8. David, why does it fall to you to argue the case about what Dave Owen REALLY means? If he wants to talk in riddles, don’t try to favorably translate when Elaine responds with logical and legitimate comments and questions. You reported what he said; you should let us decide (unless you realize you didn’t accurately and completely report).

    Obviously, both Pinkerton and Owen are using the Vanguard to help play out their negotiating positions. Both of them can sign up and respond to Vanguard readers’ comments, and it would be great if they would.

    We should be able to evaluate their positions based on their words as you accurately report them. We should not have to keep analyzing whether the words you put in their mouths more accurately reflect their positions than the words that come out of their mouths.

  9. “David, why does it fall to you to argue the case about what Dave Owen REALLY means? “

    I don’t think it’s what he “really means” but rather I think Elaine mischaracterized what he said.

  10. The Davis Teachers voted against concessions as layoffs wouldn’t have a direct impact on the large majority of the employees. The majority will always vote in their own personal interests. The difference here is that the recent City layoffs did not allow bumping – the action of employees facing layoff taking the jobs from more recent hires. Not allowing bumping means that anyone could lose their job and might make an agreement for concessions the safer of the two options for individual employees.

  11. “What does an arborist tree trimmer make in the private sector?”

    “The top paid arborists (likely those certified versus uncertified) earned a wage of $23.01 or more per hour, or about $47,870 per year….The prevailing wage for certified arborists can also vary based on whom the arborist works for. According to the BLS, the highest number of arborists worked for companies that provided services for buildings and dwellings. The average wage of those working in this field was $14.85 per hour. The second largest group worked for state government agencies and earned an average of $20.24 per hour….According to the BLS, the largest number of arborists worked in the state of California and earned an average hourly wage of $15.94, as of 2010.”

    One can conclude that eliminating the $30,000 cafeteria payout bonus would put our Urban Forest Section tree trimmers right about where certified government arborists fit in the average pay scales.

    Given the retirement and other benefits that probably make the city jobs more attractive than work at private companies, I’d guess our folks would be pleased to give up cafeteria payouts rather than giving up the jobs themselves.

    On the other hand, will those not targeted for elimination even consider accepting less to allow the city to keep more people on the job–at reduced salaries? Or, will current employees hold firm while watching their colleagues keep dropping out of the city workforce in order to continue premium salary and benefits packages for those who get to stay?

    Finally, if the city keeps just struggling along, continuing to live on the edge, what about the lost opportunities for those we might have hired when we got back to a healthy, “sustainable” municipal economy?

  12. JustSaying,

    Thanks for the information.

    Points of clarification…

    If the DCEA arborist tree/trimmer makes $50,000 per year, that is $24.04 per hour, correct ($50,000 / 2080)?

    Then we would need to include the value of all benefits including healthcare, pension, paid days off, etc. I thought the value of the benefits less the value of the paid days off was about $50,000 per year.

    The paid days off are a big deal also, because city workers get 14 paid holiday days compared to the private-sector average of 6 paid days. Also, the vacation and sick days provided are much greater than the private sector.

    So, we are really talking about total compensation in the $50-60 per hour range, right?

  13. [i]”The reference here is to the cafeteria cash-out plan, that currently pays employees as much as $18,000 a year to take a cash-out rather than to receive the city’s health care package. But [b]it is an uneven benefit, only going to those employees who are covered under their spouse’s health coverage[/b].”[/i]

    That is incorrect, David. Almost all City of Davis employees get a cafeteria cash-out.

    Only those who take no health coverage from the City–because they get covered by a spouse or by another job–get the full $18,000 cash-out (which is 90% of the $20,000 basis*.) However, everyone whose policy costs less than $20,000, which again is most City employees, gets some cash-out.

    (*Yesterday, CalPERS announced that it is raising the cost of medical premiums by another 9.6% ([url]http://www.latimes.com/business/la-fi-calpers-health-20120614,0,2259255.story[/url]). That will increase the basis to about $22,000 on January 1, 2013.)

    Take almost any unmarried employee with no children. His coverage will cost around $6,000 this year. His cash-out basis is thus $14,000, and his cash-out is 90% of that or $12,600. Another person, say she gets coverage for herself and her domestic partner, and it costs $12,000, then her cash-out would be $5,400 (90% x $6,000).

  14. I made a mistake above. Here is a correction:

    [i]”… she gets coverage for herself and her domestic partner, and it costs $12,000, then her cash-out would be”[/i] … [s]$5,400 (90% x $6,000)[/s] [b]$7,200.[/b]

    $20,000 – $12,000 = $8,000; 90% x $8,000 = $7,200.

  15. [i]”So, we are really talking about total compensation in the $50-60 per hour range, right?”[/i]

    I would guess it is probably closer to $45/hour worked. However, I would also guess that a tree trimmer who owns his own business and sells his service to private parties is a lot more productive per hour. And that is not due to experience or skills. It is due to incentives.

    Many, many years ago, when I was working at 3 AM in a fish factory in Petersburg, Alaska, after having started that shift at 6 AM the previous day, I heard a great line by a guy who was working extremely slowly (gutting and trimming lingcods), despite the fact that the rest of us were going as fast as possible, in an effort to catch a few hours of sleep before we had to start work again. When the supervisor told him to speed up, he said (in a thick Southern drawl): “You payin’ me by the hour? Or you payin’ me by the fish?”

    In effect, the public employee tree trimmer is being paid by the hour, and he gets more hours by going slowly. The self-employed tree trimmer is being paid by the branch, and he gets more money by going fast.

  16. [i]”In effect, the public employee tree trimmer is being paid by the hour, and he gets more hours by going slowly. The self-employed tree trimmer is being paid by the branch, and he gets more money by going fast”[/i]

    Ah yes, the “what gets measured gets done” principle.

    The way to offset that natural motivation of the hourly employee to be less efficient, and/or less productive, is to say “you get to keep your job if you gut and trim enough fish, or trim enough branches, and you get a bonus if you exceed the base performance exectations.” Can’t really deliver that message to a union employee.

    Rich: Do you include the value of paid time off in the $45 per hour estimate?

  17. “In effect, the public employee tree trimmer is being paid by the hour, and he gets more hours by going slowly.”

    This is actually not true. In fact, he gets paid the same no matter how he quickly he works. However, he indicated that he has actually volunteered time to handle emergency situations. Do you have evidence that he worked in an inefficient manner? And if you do, that’s a supervisory and oversight problem.

  18. Rich, are you saying that the city essentially gives every employee $20,000 above his or her salary, labeling it a “health insurance benefit”? And, that almost no city employee pays out the majority of this payment for health insurance? If so, why would the “basis” be so high?

    And, if so, I guess I’ve never really understood the health insurance concept as it ties into CalPERS employment. If California wants to encourage its employees to be covered by quality health programs, giving them more money if they choose low-end coverage seems counter productive. Why not just call the money “salary” and let employees track down their own coverage if they want any?

  19. [i]”Do you have evidence that he worked in an inefficient manner? And if you do, that’s a supervisory and oversight problem”[/i]

    One of the common tricks in a union shop is to make sure the newbies get adequately indoctrinated into the status quo level of worker productivity. Since management tends to have come up through the ranks, some of them do not know any better. Once an organization of workers develops a standard level of performance mediocrity, it becomes endemic to the work culture and it is difficult to change. Workers actually feel like they are working as hard as they can. They develop a “can’t do attitude” with respect to taking on greater responsibility or increased productivity. This is one of the most challenging jobs for management… organizational change that requires a shift it work culture norms to do more with less. But for most companies in the private sector, it has HAD to be done. You can tell the companies that failed to get it done because most of them no longer exist.

    Throw in the power of unions to disrupt and block that change, and it becomes almost impossible. In that case the organization will fail unless it is a protected public-sector business, or is bailed out before it fails.

  20. I don’t have a problem with a cash-out cafeteria benefit as long as:
    1.The base covered is close to the median for all coverage options.
    2.The cash-out is 50-60% of the premium savings.

    The lower percentage cash-out reduces the incentive for employees to skimp on coverage and have it impact their care… while still allowing the option for more premium coverage. Basing the full amount on the median for all coverage options means that some employees will pay out of pocket to get the premium coverage.

    [i]Except he’s not in a union.[/i]

    Now I’m confused. I thought the Davis city tree trimmers were covered under collective bargaining?

  21. Jeff: DCEA is not a union, it doesn’t have a formal structure. It is a bargaining unit much as most of the city units are arranged.

  22. David: Ok, thanks for explaining that.

    I think “a bargaining unit” comes close enough to union to make the point. I assume the agreement includes most or all of the same job protections that unions collectively bargain for.

    It is interesting to me, because I’m sure people working for a union cannot comprehend a working life without a union. I have never worked for a union (except a few months working for Court Galvanizing when I was 18), and I cannot fathom why people are confused about this when 90% of the rest of the working US is non-union.

  23. Ok… some facts… the basic Kaiser (nominally lowest cost health plan) is $1590/mo. (~ $19,100/yr) for an employee + 2 or more dependents. Mr Boone’s idea of making the basis the median coverage would up that significantly. His idea of having the cash-out be 50-60% of the avoided cost of the premium, would increase the amount currently available to those hired since 2010.

  24. $19,100/yr for a Kaiser plan?!!! What is that a zero-deductible plan?

    Based on this, then I would add to my list of options to decrease the level of plans offered. Geeze…

    50-60% cash out for all employees… so the newbies get a better deal, and the existing employees have to pitch in more.

    But first, drop the high cost plans. $19,100 per year for a Kaiser plan is ridiculous. I have a Blue Shield PPO, HSA plan for my 17 employees. I pay 100% of premiums make an annual contribution in their personal HSA account every year to help cover their deductible and out of pocket, and give them a $250 per month wellness benefit… and I spend a bit more than half of what this Kaiser plan costs. The Kaiser HSA plan would have saved me even more money, but I have a few employees still afraid of Kaiser.

    Who the hell is negotiating these plans… the union (or the bargaining group that flies under the union label radar)?

  25. Calpers sets the prices of the health plans. And DCEA is not even close to a union if they were the 9 jobs would have been able to have been saved. In speaking with some of the DCEA employees they feel as if they are ‘at will’ employees. Since the city can just do whatever they want with them. There is no protection for them.

    Regarding the PERB hearings the city did wrong and they punish the employees for it. I am still unclear how and why that is. Who is responsible?? DCEA didn’t do anything wrong.

    Some of the 9 if not all of them I am sure would have rather given some concessions rather than being layed off.

  26. Rifkin: [i]”In effect, the public employee tree trimmer is being paid by the hour, and he gets more hours by going slowly.” [/i]

    Greenwald: [i]”This is actually not true. In fact, he gets paid the same no matter how he quickly he works.”[/i]

    I need to explain why it is true [i]in effect.[/i] Regardless of the person’s productivity, he gets the same wages and the same benefits and other considerations. So his incentive, as long as no one fires him, is to go slow, to take it easy.

    And what is the result of his going slowly? It means the City (or rather, the taxpayers) need to pay for more hours to get those trees trimmed.

    So when I say, “he gets more hours by going slowly,” I mean that if the trees are going to be trimmed, this one tree trimmer will either get overtime to get the job done or someone else (maybe full-time, maybe part-time) will get those extra hours that are the result of the incentive structure in place.

  27. JUST: [i]”Rich, are you saying that the city essentially gives every employee $20,000 above his or her salary, labeling it a ‘health insurance benefit?'”[/i]

    Yes. But it is not $20,000. It is 90% of that (for most) in the current contracts. For fire, it is 80%. However, fire has a substantially higher basis for their medical plans. So they actually do the best with the cafeteria cash-out program.

    The exception to the rule are people hired since February, 2010 (which currently applies to next to no one). They effectively have a $6,000 basis for cash-outs, but they too can get a benefit of up to $20,000. Note also, that an employee can get a medical benefit of much more than $20,000, but has to pay out of pocket for the amount over $20,000 this year.

  28. [i]”Why not just call the money “salary” and let employees track down their own coverage if they want any?”[/i]

    Compared with what an individual can buy in the health insurance market, the plans sold by CalPERS are very cheap. In other words, they are a very good deal for what you get. If you or I wanted to buy what CalPERS now sells for $6,000/year as individuals, we would have to pay at least $15,000 per year, probably more.

  29. Greenwald: [i]”With the new PERB finding, part of their resolution of this is to go back to fact-finding,” he said. This is in addition to making [b]the union whole[/b] …”[/i]

    BOONE: [i]”One of the common tricks in [b]a union shop[/b] is to make sure the newbies get adequately indoctrinated into the status quo level of worker productivity.”[/i]

    GREENWALD: [i]”[b]DCEA is not a union[/b];”[/i]

    David, I think you called it a union in your original argument. But the apt terminology does not really change Jeff Boone’s point (right or wrong). The DCEA has its own culture.

  30. GREENWALD: [I]”DCEA doesn’t have a formal structure. It is a bargaining unit much as most of the city units are arranged.”[/i]

    Nope. DCEA is an “association,” and it has a formal structure, just the same as the DPOA and PASEA, but it is not the same as the ‘bargainging groups,’ like the management group, the department heads, the police lieutenants, etc.

    Also, unlike DPOA and PASEA, the DCEA is the only labor association in Davis (beside the Firefifghters Union) to get union bank hours: [quote]Upon request of the ASSOCIATION of not less than two working days, the CITY agrees to establish [b]a bank of hours to be utilized by DCEA officials and members for DCEA business and/or training.[/b] Utilization of this bank will be at the rate of no more than ten (10) hours per month. [b]Time may be granted, with approval, to attend conference or training.[/b] This bank will consist of 120 hours per calendar year and does not carry over to future years. The CITY will contribute seventy (70) hours annually to this bank, and the membership using the bank will contribute one-half (1/2) hour of vacation annually. Such leave will not result in loss of compensation or benefits, including credit for vacation, holiday, and sick leave. Such leave will not constitute a break in the employee’s continuous service for the purposes of salary adjustments, sick leave, vacation or seniority.[/quote]

  31. There’s got to be someone at city hall that can give you an exact figure that they need to accomplish with these bargaining units to get to where they need to be,” he said.

    This appears to be a reasonable expectation. From what I can glean from the interview, DCEA is willing to accept concessions in order to help the city achieve solvency, but they don’t wish to contribute more than there share (seems reasonable to me). Also, rather than demonize this group for prevailing with the PERB appeal, where is the outrage with the fact that our substandard legal team cost us $800,000. Mr. Owen may be correct in his assertion that the city was going to layoff those 9 employees either way. I just looked over the budget on the city’s webpage. Looks like another 18 or so positions were cut from what looks like white collar jobs. My guess is that these are not DCEA represented employees. It doesn’t look like accepting concessions saved them.
    Finally, I think we can agree that cashing out the full medical benefit is flawed on almost every level. This needs to end NOW.

  32. [i]”From the standpoint of quality and safety, you don’t necessarily want to incentivize tree pruners to go faster.”[/i]

    True.

    However, I would imagine that if the City simply put the tree trimming out to bid to all private contractors (and had no restrictions based on how much employees were paid or what other benefits they were given), and the City stipulated that the contractor had to meet a set standard of quality or would not be paid, we would get these results (at least in the short run*):

    1. The total cost would be half or less for each tree trimmed;
    2. The quality of the work would be no worse than what is now being done; and
    3. The number of hours it took the winning bidder to trim a given number of trees would be less than the hours now being consumed by City employees.

    *Why short term? My observation of “private” contractors who take on various public services of this sort is that over time, they become just like the public employees, if not worse. They start giving large campaign donations to elected officials. They become institutionalized. They rig it so the bidding process becomes less and less competitive. They get the laws changed so that they in effect become the only qualified shop in town. And once they have a monopoly, they no longer have the need to keep costs down, to push workers to be as productive as possible, and so on.

    If you want an example of this, look at Davis Waste Removal. Most people I know in Davis mistakenly think it is owned by the City of Davis. It’s not. It is a private company and always has been. I think DWR does quality work. I have no complaints about my garbage service. However, there is no real price competition for trash services in Davis. DWR prices like a monopolist (with the consent of the City Council). And I imagine that DWR employees make a total wage that is close to what public employees make.

    As such, it is hard to argue that such “private” contractors really create much savings. The key, ultimately, is to incentivize competition, and to not pay contractors for shoddy work.

    As far as job safety goes, I would think that the workers’ comp insurance company would likely make sure that safety is not completely ignored. But I still think your point probably holds. If you go faster, 20 to 50 feet above ground, holding a motorized chain saw, the chances of an accident would have to be greater.

  33. [quote]$19,100/yr for a Kaiser plan?!!! What is that a zero-deductible plan? [/quote]

    Not likely. I’m self-employed, and have Kaiser coverage for myself, wife and son. I’m currently paying $18,778.56 per year, with deductibles aplenty. Still, we’re content with the breadth and quality of the service. (I’d prefer a single-payer system, but that’s another discussion.)

    If Kaiser were to close the Davis facility I’d probably go to some sort of HSA (if Congress doesn’t ax them), but that doesn’t appear to be a choice I’ll have to make anytime soon.

    .

  34. [i]”where is the outrage with the fact that our substandard legal team cost us $800,000.”[/i]

    No one has been more explicit in criticizing Harriet Steiner for her bad legal advice in the impasse process than I have been. I understood the mistakes were her fault the second I saw Judge Cloughesy’s findings, which I thought were well supported by the facts.

    That said, the $800,000 would not have to be paid, if the DCEA would drop its case. I think the DCEA should go to Pinkerton and the public and say, “If you will guarantee all of our DCEA jobs for the period of our next contract and not lay off any of the 9 people you have said you will lay off this month, we will drop the PERB case and you will not have to pay us the $800,000 penalty.” If Pinkerton said “no deal,” then the remaining DCEA would get $800,000 and the public would know that Pinkerton was not being fair to the DCEA.

  35. That said, the $800,000 would not have to be paid, if the DCEA would drop its case. I think the DCEA should go to Pinkerton and the public and say, “If you will guarantee all of our DCEA jobs for the period of our next contract and not lay off any of the 9 people you have said you will lay off this month, we will drop the PERB case and you will not have to pay us the $800,000 penalty.” If Pinkerton said “no deal,” then the remaining DCEA would get $800,000 and the public would know that Pinkerton was not being fair to the DCEA.

    Now that is a fair compromise. As long as its more than a single year contract, DCEA should take that deal!

  36. DCEA did not bargain for the cafeteria plan. The city came up with this in 1996 as a way to remove spouses from retiree medical and add to the total comp number. This way they can keep employees within the industry averages for compensation, but get a large reduction in retiree pay, as that is only based on wages. CITY IDEA, Check – CITY SCREW UP, Check – EMPLOYEES TAKE THE BLAME, Check.

    PERB Hearing – The city violated IT’S OWN rules and got called on it. CITY IDEA, Check – CITY SCREW UP, Check – EMPLOYEES TAKE THE BLAME, Check.

    Why doesn’t the city just offer the employees a salary of around 85% ( or whatever the % is minus workers comp and other things mandated by law ) of their total comp. Stop paying for medical, stop paying PERS contributions. The employees could pay their own medical, and invest for their own retirement. This would greatly reduce the future liability of the city and the workers will be happy with increased take home wages.

  37. Hmm… 9 employees @ $100k each = $900k… but that is every year.

    Maybe Pinkerton is slow at math, but I doubt it.

    Paying the $800k settlement will likely just lead to accelerated layoffs of other DCEA employees, don’t we think?

  38. Jim Frame: [i]”I’m self-employed, and have Kaiser coverage for myself, wife and son. I’m currently paying $18,778.56 per year, with deductibles aplenty”[/i]

    That is a high premium for a high deductible Kaiser insurance plan… individual or not. Remember though we are talking about group rates negotiated by CalPers, not individual policies. The group rates should be significantly less unless they are Rolls Royce plans.

    My company group has the highest RAF, and for family coverage the Kaiser HMO/HSA plan with a $4,000 deductible/ $7,000 max out of pocket was quoted $681 per month ($2000/$3500 and $347 for singles). The company pays the full premiums and then contributes $4,000 to the employee’s HSA account… and the total is $12,172 per year. That leaves the employee with a $1,500 max out of pocket risk and no deductible risk… which if they save money from low-utilization years they can use their HSA balance to cover the cost of a high utilization out-of-pocket expense. This plan does charge $100 for emergency room visits, and $300 per day for in-patient hospital and maternity. But again, employees can use their banked HSA money for those costs if and when they hit. They can also bank their HSA money from low-utiliztion years for elective non-covered procedures if they choose. Or they can do what I recommend and save it for their retirement since they do not have a pension or healthcare coverage for life like their public-sector friends and neighbors.

    I know this is a high-deductible HSA plan and not the straight Kaiser HMO, but it is illustrative of how I can cover all of the premium costs, all the deductible, and leave very little out of pocket cost risk to my employees, for a lot less. And I am a much smaller group with a lot of older employees. What the heck is going on with the city’s healthcare costs that they are so much higher?

    Oh yeah… California taxes the HSA contribution but not the fed. Just another reason to vote NO on any new tax increase from Brown.

  39. [quote]That said, the $800,000 would not have to be paid, if the DCEA would drop its case. I think the DCEA should go to Pinkerton and the public and say, “If you will guarantee all of our DCEA jobs for the period of our next contract and not lay off any of the 9 people you have said you will lay off this month, we will drop the PERB case and you will not have to pay us the $800,000 penalty.” If Pinkerton said “no deal,” then the remaining DCEA would get $800,000 and the public would know that Pinkerton was not being fair to the DCEA.[/quote]

    Here are the problems with that idea. There is no way the city would agree to that without DCEA taking other concessions. DCEA doesn’t want to take the concessions put forth by the city without fact finding first. City doesn’t want us to find the facts. DCEA won’t agree to this because of the possibility of the city laying off the workers after the contract expired. The city won’t agree to this, because if further layoffs are required, it could decimate another functional group.

    The city should have found new legal council, and sued the old one to pay for the damages caused by their poor legal advice.

    Instead of paying professional negotiators, the city & bargaining units should hire an arbiter.

  40. [quote]However, there is no real price competition for trash services in Davis. DWR prices like a monopolist (with the consent of the City Council). [/quote]

    It’s been awhile since I’ve followed the garbage contract, but I recall over the years seeing it put out to bid occasionally, with some of the big players responding to the RFP. DWR has always come out on top, not necessarily with the lowest cost, but in the ballpark and with a known high level of service.

    P.S. I earlier misspoke when I wrote that my Kaiser plan has deductibles. There’s no deductible, but there are an assortment of co-pays ranging from $25 to $100 depending upon the particular service or procedure.

    .

  41. [i]”Why doesn’t the city just offer the employees a salary of around 85% (or whatever the % is minus workers comp and other things mandated by law) of their total comp. Stop paying for medical, stop paying PERS contributions. The employees could pay their own medical, and invest for their own retirement. This would greatly reduce the future liability of the city [b]and the workers will be happy with increased take home wages[/b].”[/i]

    I don’t think the workers will be as happy as you suggest.

    For example purposes, take a non-safety employee whose base salary is $60,000 per year. In addition to that, he gets a cafeteria benefit worth $20,000, which he cashes out for $18,000. It also costs $18,720 per year to fund his pension (using the CalPERS rate that starts in 2013).

    Let’s say this employee pays the full 8% employee share ($4,800), so the employer cost is $13,920 ($60k x 23.2%). That brings his compensation cost to $91,920 ($60,000 + $18,000 + $13,920).

    In addition to that, the employee will get a lifetime medical benefit upon retirement. The annual present value of this (for the average employee who is fully vested) is roughly equal to 90% of the cost of the current cafeteria benefit (though it may be less if medical inflation ever flattens out). So that is another $18,000 (90% x $20k).

    Counting nothing for workers comp, life insurance, long-term disability, Medicare, etc., we get a total comp of $109,920 for this “$60,000 employee.”

    Of his total comp, he must pay taxes on his $60,000 salary and his $18,000 cash-out (say 20% x $78k = $15,600), bringing his take home pay down to $62,400. He also loses the amount he pays for his pension funding, $4,800. So his take home pay falls to $57,600.

    He is much worse off in your suggested system (if I understand your proposal correctly). You say he should get 85% of $109,920 = $93,432. All of that income would be taxable (and he would be in a higher bracket for all the marginal income). So say his tax bill is $23,432 (24.079% x $93,432). That would bring his post-tax take home pay to $70,000.

    Let’s say his medical premiums were received from his wife’s job, so that cost him nothing.

    He now has $12,400 ($70,000 – $57,600) to invest for his retirement* and to invest in order to pay for his post-employment medical costs and any such costs for his wife and kid.

    That $12,400 hardly compares to what is now going into his pension account ($18,720) and what is building as a liability for his employer for his retiree medical ($16,000). In other words, the system you propose makes him roughly $22,320 per year worse off than what he is now getting.

    Due to our tax laws, there is no way your system could be equal for the public agency and anywhere nearly as good for the employee. Or if it is as good for the employee, it is much worse for the employer.

    *Forget about Social Security for this example, though he would have to join that if he did not have the CalPERS pension.)

  42. Rich, sorry to be so dense about this, but…. If the CalPERS insurance is priced so low (because of such a large pool for which they negotiate, I assume)’ why would governments and agencies offer up more than triple the cost to employees and then pay the excess to employees in cash)?

    Why not just say, here are your insurance options, take one or forget about it? Why not say, we’ll contribute up to $8,000 for whatever insurance plan you pick; you pay the rest?

    If the family already is covered by equal, better or cheaper insurance, why not give the employee some token to turn down the CalPERS coverage. (Do city and UCD employees get their insurance from the same system?)

    It seems as though the city incentives don’t encourage anything that benefits city taxpayers or provide any public benefit, for that matter.

  43. Rich, your latest accounting makes it clear why current employees don’t want to accept any of the suggestions being tossed around here. It also makes it clear that the rest of don’t realize the magnitude of the pay (including benefits) we’re providing to city employees. We feel for the poor “$50,000 worker,” not comprehending that she wouldn’t be satisfied getting anything close to $50,000.

  44. [quote]The city came up with this in 1996 as a way to remove spouses from retiree medical [/quote]This is nothing other than a damn lie. Spouses and other dependents are covered, within certain limits.
    [quote]They can also bank their HSA money from low-utiliztion years for elective non-covered procedures if they choose. [/quote]The IRS should be visiting you shortly, methinks… HSA amounts for City, and at least some private entities is a “use it, or lose it” proposition, in any given calendar year. If I am wrong, please cite reference(s).
    BTW, Mr Rifkin, an employee who is eligible for both SS & a government pension will have their SS benefit reduced, dollar for dollar, by the amount they get in the gov’t pension. Mr Reagan is to be thanked for that.

  45. [quote]What the heck is going on with the city’s healthcare costs that they are so much higher? [/quote]The plan you cite is not available to member agencies through PERS. Not at all.

  46. Sidebatr to David G…. now that Souza and Greenwald have been “retired” by the voters, what will they get in terms of pension &/or retiree medical?

  47. [quote]The city came up with this in 1996 as a way to remove spouses from retiree medical
    This is nothing other than a damn lie. Spouses and other dependents are covered, within certain limits. [/quote]

    If I am wrong them I am misunderstanding the DCEA MOU. It states,
    “MEDICAL BENEFIT PREMIUMS FOR RETIREES
    Effective for all new hires as of July 1, 1996, the CITY shall pay 50 percent and the employee shall
    pay 50 percent for the actual group health insurance plan selected by retiree not to exceed the PERS
    rate for Kaiser for an eligible employee and two or more dependents prior to age 60, thereafter the
    CITY will pay retirees actual group health insurance plan not to exceed the PERS rate for Kaiser for
    an eligible employee and two or more dependents.”
    It says nothing about spouses being covered.

  48. JUST: [i]”… Why would governments and agencies offer up more than triple the cost to employees and then pay the excess to employees in cash)? Why not just say, here are your insurance options, take one or forget about it?”[/i]

    I think the idea behind that can be understood with an example using two cops, both of whom were hired on the same day and both of whom have the same position at this point and the same duties and have equal service records and performance ratings on the job. Neither one works more overtime than the other or does anything to earn more or less pay than the other.

    For these two cops, A & B, I think most people would agree that they deserve equal compensation. However, Cop A is married and has one child; Cop B has never married or procreated. It costs the City $20,000 to buy a health plan for Cop A, wife of A, and son of A; it costs the City $6,375 to buy a health plan for Cop B.

    With no cash-out, the total compensation to Cop A will be $13,625 (untaxed) more per year than it will be for Cop B. But if we allow Cop B to take 100% of the difference in a cash-out, then their total compensation (for the exact same job done equally well) will be equal.

    That was the thinking originally: That the compensation for a given job should not be higher just because one person has dependents and the other does not*. And I should add that I believed this was a just system.

    Two things changed my mind about cash-outs. The first is that since 2010 we effectively got rid of them for new hires, with the $6,000 basis for cash-outs. That (as well as reducing cash-outs to 90% for ongoing employees) eliminated the argument of equal pay for equal work. The veteran employees would be getting more than the new ones, even with the same jobs. The second factor which helped to change my mind was simply the cost of cash-outs. At $4 million per year and growing, given the long-term budget crisis, we can no longer afford to be as equitable as I would like.

    If there is a desire anew to put all total comp on equal footing for equal work, the only way to do that (under a budget) would be to offer a medical plan for all employees which has no spousal and no child coverage included (unless the employee wants to buy that from CalPERS out of his paycheck). In other words, each employee would be capped at around $6,400 (enough to pay for coverage at Kaiser for one person for one year) for his full cafeteria benefit, take it or leave it. … I really doubt we are going to go in that direction, though. There is too much history in Davis of the city offering spousal coverage and covering one kid.

    *If you ever watched the old Mary Tyler Moore Show, there was an early episode in which Mary Richards complained to Lou Grant that she was being paid 20% less than the man who had her job before she was hired. Lou responded, “That’s too bad, Mary. Joe had a wife and two kids to feed. You’ve just got a gold fish.” The implication also was that Mary was being mistreated because she was a female. But the idea is much the same as giving more in total comp to any employee whose medical benefit needs are higher.

  49. [quote]an eligible employee [u][b]and two or more dependents[[/b][/u][/quote]Here is the proof of your lie, Preston. BTW for older employees (tenure with the city), it is 100%. Preston… read your own post.

  50. [i]”The IRS should be visiting you shortly, methinks… HSA amounts for City, and at least some private entities is a “use it, or lose it” proposition, in any given calendar year. If I am wrong, please cite reference(s).”[/i]

    hpierce, Let that tax man come… I have nothing to hide but my disdain for the guys he works for!

    You are referring to a FSA “Flexible Spending Account”, and not a HSA “Health Savings Account”. HSAs can grow a balance that is not taxed as long as the funds are spent on qualified medical expenses. Except for CA and a few other states, the balance is tax free if used correctly. FSAs are the “use it or lose it” type of plan… I am not a fan of those for many reasons.

    HSAs are a great idea for putting health care spending “skin in the game” for employees, and for their better management of their use of the plan, they can be rewarded with healthcare money for retirement. It has been a little disheartening to me that utilization for HSA plans has been higher than expected. Carriers have been raising rates. Employees are spending more than was hoped. My reading on it includes some general theories about Americans not being too good at saving for their retirement. There are other theories that the concept is still poorly understood by many employees. They have money accumulating for their healthcare, but they just use their HSA credit card like they still have a no deductible HMO plan. Lastly, there is that weird deal where people tend to look at doctors as mini Gods that can do know wrong and should be regularily visited.

    My deeper thinking is that we have screwed up the public with no deductible and low deductible style plans that have been the norm… we have disconnected people from being paying consumers for health care service similar to being paying customers for a car mechanic. Too few of them really consider price and value for health car like they do for just about everything else they spend money on. Sore knee? then demand that MRI! I think the sooner we get folks back to paying out of their own pocket, the better.

    Here is some information on HSA plans: [url]http://en.wikipedia.org/wiki/Health_savings_account[/url]

  51. [i]we get a total comp of $109,920 for this “$60,000 employee.” [/i]

    To add to Mr. Rifkin’s fine analysis, I need to repeat the point about paid time off. Here is the way I factor that cost.

    At $109,920 in total compensation we get $52.85 per hour.

    Per the DCEA MOU, an employee with 10-years of service gets 20 days of vacation time. I count 14.5 paid holidays given including the 2.5 floating holidays. I can’t find the Personnel Rules and Regulations document online to confirm this, but I am going to assume 10 days of sick leave.

    So we have a total of 44.5 days of paid time off @ $52.85 per hour. That is another $18,815 in benefit value.

    Which brings the grand total to $128,735 for our $60,000 employee.

    The reason that paid time off needs to be included is that every day an employee is off work during normal service days, another employee is required to cover the missing employee’s absence. At 44.5 paid days off, we need one additional employee for about every 8.2 FTEs.

    Note that the BLM reports the average paid holidays for private-sector at 8, the number of paid vacation days is 16 days, and the number of sick days (personal leave) averages 8 days… or 32 paid days off in total… or about one additional employee for every 11.4 FTEs.

  52. [quote]You are referring to a FSA “Flexible Spending Account”, and not a HSA “Health Savings Account”.[/quote]My error. Thank you for the clarification.

  53. hpierce – I don’t believe that a spouse is considered a dependent under the terms of the MOU.
    David, could you look into this please. I would like to know if I truly am a liar.

  54. BTW, Preston, I chose my words poorly. The information you had was incorrect. Unless you constructively knew that, I was wrong in saying you “lied”. I sincerely apologize for my poor choice of words.

  55. Apology accepted. Thank you.

    It is my belief that employees hired before 1996 do have coverage for their spouses, but post 96′ employees do not.

  56. Rich, thanks for the patient explanation. Looks to me as though the solution would have been to pay for a specific level of health insurance for each [u]employee[/u], regardless of whether they have spouse, kids or goldfish. Just by offering good-deal CalPERS group insurance, the city provides a benefit that helps everyone from the single worker to one with 10 dependents. Equal pay for equal work is maintained because employees pay any costs above employee-only plan charges. I’d also say this should be a “take it or leave it” benefit–just like any other optional employer offering that might be available, such as working out in the fitness center.

    Which I think is close to what you’ve offered as one of your solution proposals….

  57. Go to the City website. Go to the HR page. All of the MOU’s (non-council/non-dept heads) are there. All of the MOU’s read the same in this regard

    One nuance… for the most recently hired, their spouses will only have 90% of their pemium covered. Check the Gov’t Code section referenced in the MOU.

  58. Preston… you got me thinking… the 1996 change was that, prior to age 60, retiree’s would only get half the medical “stipend”. Once a retiree is eligible for medicare (which generally means that the spouse is/will be covered as well), the retiree medical that the City pays is for the ‘supplement to medicare’ amount. There are some (but disappearingly few) employees who will not be eligible for Medicare.

  59. [quote]
    JustSaying: David, why does it fall to you to argue the case about what Dave Owen REALLY means?

    dmg: I don’t think it’s what he “really means” but rather I think Elaine mischaracterized what he said.
    [/quote]

    What the Vanguard says he meant is accurate, but what Elaine says he meant is mischaracterization? You really want to stick w that argument, dmg? Let’s dig into that position a little farther. For instance, you said:
    [quote]1. Elaine, I don’t know. Let’s say you are getting $50,000 but also the full $18,000 cafeteria cash out, would it be worth it to keep your job if you have to go down to say $45,000 for base salary and $6000 for the cash out (a loss of $17,000 in take home income), then you have to pay more into PERS on top of that. I am not weighing in on whether I would personally do that, but it seems to me it’s at least a tough call to make versus trying to find another position in this economy.[/quote]

    With a straight face you are actually trying to argue that the 9 people who lost their jobs in this tough economy may have felt that was a better choice than taking concessions? Really? It defies simple logic. At least one commenter thinks your “interpretation” of what Dave Owens meant is questionable, to wit:
    [quote]Livin-n-workin-n-Davis: Some of the 9 if not all of them I am sure would have rather given some concessions rather than being layed off. [/quote]

  60. [quote]Livin-n-workin-n-Davis: Calpers sets the prices of the health plans. And DCEA is not even close to a union if they were the 9 jobs would have been able to have been saved. In speaking with some of the DCEA employees they feel as if they are ‘at will’ employees. Since the city can just do whatever they want with them. There is no protection for them. [/quote]

    I’m not following you here. Unless there is some sort of tenure system in place, aren’t all city employees “at will”? Please explain how this works for city employees…

  61. [quote]He feels like the bargaining unit has done what was asked of them over the last decade plus and were basically lied to and let down by city leadership who failed to mind the store.

    In my opinion, DCEA and PASEA are really mainly innocent victims to the fiscal mismanagement of the city in the last 12 to 15 years.[/quote]

    Does it really matter how the city “got here” in terms of fiscal prudence? The city has to deal w what is here and now, regardless of who was “at fault” for past practices. The current city fiscal situation is what it is. Hasn’t the Vanguard been clamoring for something to be done about the city’s budget woes NOW rather than LATER?

  62. I think it does matter how we got here. I agree with you that something has to be done about the budget woes and probably agree with the current approach. But even if we do, that doesn’t mean we should not have compassion for those who will have their lives turned upside by this.

  63. [quote]Does it really matter how the city “got here” in terms of fiscal prudence?[/quote]

    I believe it does matter, not to assign blame but to understand why the actors have behaved as they have.

    The bargaining units became accustomed to persistent gains. Despite years of warning by minority voices, the official response was always “everything’s okay, we’ll get through this.” It isn’t reasonable to expect the bargaining units to be better at predicting future city budgets — something over which they have little, if any, control — than the combined efforts of those charged with budgeting: the council and financial staff.

    In many ways, the bargaining units are like the average citizen: we trusted the council to act prudently, and even after it became clear that something was wrong, few of us had the time, expertise and informational access to know what to do next.

    Absent the context of a comprehensive and reliable budget, why would a bargaining unit accede to a request/demand for concessions, when they haven’t had to do so in past negotiations?

    It seems to me that DCEA acted rationally under the circumstances, following what it perceived to be a prudent process to arrive at a settlement with management. They didn’t understand that the management perspective had changed radically, and that the threat of dire action wasn’t just a negotiating tactic. Now they’ve been slammed with real losses, and it’s not surprising that they’re struggling to formulate the most appropriate response.

    .

  64. Jim Frame’s 2:20 post (in my opinion) is well said and correct.

    I would add this: If you are DCEA and you can (hypothetically speaking) see into the future that a big problem is coming, because you understand that Rich Rifkin has something inside his bald head and he has been saying this for years, but at the same time none of the other bargaining units or associations or unions sees what you see, then it becomes impossible to make any proactive changes to make your own contracts more sustainable.

    That is, if the fire union is getting a 36% raise for its members, and say DCEA is getting over the same period an 8% raise + the cost of benefits and pension funding are going up by double digit percentages, and DCEA understands that none of these raises in total comp is sustainable, that the city’s income cannot grow that fast to keep up with the costs, DCEA would be crazy to say, “Don’t give us any raises; we are concerned about the future fiscal problems they will cause the city and what that will mean to our members.” Why not? Because if DCEA (or any unit) had done that, while the Council at that time was owned by the fire union, and while the top management employees were enhancing their own pay while conducting the “negotiations”, DCEA would have got no extra money, and every dollar saved would have gone into the pockets of Bobbie Weist’s Local 3494 and into the pockets of top managers (including those $200,000 per year employees who manage no one), and thus 5 years down the road, the City’s crisis would have been the same.

    In other words, it’s hard to blame the workers* for taking what the City was giving them.

    *I don’t blame any individual firefighters for taking the cash, benefits and lax working conditions that the Council awarded them, as well. However, I do think that the fire union as a whole deserves rebuke for corrupting the process by buying a majority of the Council seats. And the voters deserve some rebuke for electing those folks who allowed themselves to be corrupted by Local 3494.

  65. [quote]I think it does matter how we got here. I agree with you that something has to be done about the budget woes and probably agree with the current approach. But even if we do, that doesn’t mean we should not have compassion for those who will have their lives turned upside by this.[/quote]

    First, it only matters how we “got here” in terms of how to move forward more prudently from a fiscal standpoint, which is exactly what is being done, and you concede as much. Secondly, I, probably as much or more than anyone, have extreme compassion for those laid off. What I don’t have compassion for is a bargaining group unwilling to face reality when it is squarely hitting them in the face; and is willing to throw some of its fellow employees under the bus to keep its unsustainable compensation package in place for those still employed to the detriment of both the city and the laid off workers. Additionally such an unreasonable stance contributes to the continued downward spiral of the economy… laid off workers who remain unemployed/underemployed cannot pay much in the way of taxes if anything…

  66. I think both Jim and Rich’s comments adequately separate the two. Jim’ comments really go towards understanding why the bargaining unit might react as it has. I think most of the employees are genuinely as surprised as some city residents as to how bad things – remember they’ve basically been lied to for a long period of time, perhaps ending in the last year or two. The city’s position was that things weren’t as bad as other communities. I think the employees were stunned last year with the $2.5 million cut proposal and I think they are more stunned with the current changes.

    The city is doing what it has to do, I just hope we can do it with an understanding and empathy for those involved, most of whom are simply trying to live their lives and put food on the table.

  67. I’m also gagging a little on the notion that bargaining units should feel free to take whatever they can get, and not feel in the least bit guilty for gorging themselves at the public trough. We complain vociferously when banks or CEOs of companies do this sort of thing, but it is okay for a bargaining unit of public employees or a union does it? I just cannot wrap my head around that notion… perhaps I am just too naive in thinking people shouldn’t take advantage of a situation/be overly greedy…

    The CEO of the NYSE walked away w an $800 million severance package (and got away w it despite public outcry), but that was okay for him to do bc it was up to the NYSE not to give him such a generous benefit and not his fault he successfully bargained for such largesse?

    When public employees know no bounds, then they better expect that some day the chickens are going to come home to roost/the piper will have to be paid – and that day is here folks!

  68. “I’m also gagging a little on the notion that bargaining units should feel free to take whatever they can get, and not feel in the least bit guilty for gorging themselves at the public trough”

    That’s not quite what was said. But their job is to represent their employees. If they are being told by the city and the council that the city can afford these salaries and benefits, and they are asked to take more vacation or more benefits rather than more salary, why are they obligated to question the council and the city?

  69. “Gorging at the public trough” is a predictable outcome when cost control is inconsistently applied, unfairly applied or nonexistent.

    Employees organize into formal bargaining units because they perceive informal but logical groupings (e.g., managers, field operations, engineers, planners, etc.) to be in competition with each other. The employee’s sense of community — at least as far as compensation goes — condenses from that of the overall organization into that of his/her group. Compensation negotiations become less personal, changing the goal from what’s reasonable to what’s possible.

    The best antidote (and preventive) for this condition is outstanding leadership backed up by sound and consistently-applied policy. Both have been lacking at the city in recent years.

    .

  70. [quote]The best antidote (and preventive) for this condition is outstanding leadership backed up by sound and consistently-applied policy. Both have been lacking at the city in recent years. [/quote]

    Well said! And the time to start is NOW…

  71. I don’t think anyone’s blaming any of the unions/pseudo-unions for taking everything they could negotiate during the good times. The reactions have to do with their apparent inability to comprehend that those were unusually good times–times that put them into a really nice situation that seemed to be, but isn’t, permanent. Too bad, now how do they want to move into the new reality? Kicking and screaming, shoving colleagues out, hoping to be amongst the last batch still aboard without giving up anything that’ll put them back toward where they were a few years ago.

  72. JustSaying: Well Said.

    I makes sense that people get used to an income level. It becomes their new normal. It sucks taking a pay cut. It sucks even more losing a job. But neither have to happen.

    What irritates the crap out of me is that we are talking primarily about retirement benefits. If public-sector retirement benefit were reset to be the same or even close to what the private sector is providing employees, we would not have layoffs… at least not yet.

    What if we just matched the social secutiy retirement age? If you were born in 1960 or later, your full benefits would not be paid until and unless you retire at age 70, but you can retire at age 62 and receive 70% of your max benefits.

    Why not do the same for all public-sector pensions, but with a lower percent of salary? For example, set the full retirement age at 70 and 40 years of service for all non-safety employees, and 62 for safety. Then set the early retirement age at 62 for non-safety and 55 for safety. Pay 60% of the average annual salary for the last five years worked at full retirement age, and reduce it by 3.75% every year retired early.

    Or just convert all the defined benefit pensions to defined contributions and let public-sector employees retire whenever they want to… just like the rest of us do.

    It is the public-sector retirement entitlement that is killing us, and causing us to have to lay off employees. Yes, some are paid too much and their health care costs are too high… however, if we could just get rid of this unsustainable expecation we could balance budgets.

    Because the public sector unions and collective bargaining groups are still fighting tooth and nail to retain their obscene pensions, they are responsible for the job loss.

    A good friend of mine retires from his highly compensated federal government job in 10 days. He is 55 year old. He will make almost 90% of his compensation and have all his health care paid for the rest of his life. When the hell did we decide this was a reasonable thing to do?

    What should be happening today… “too bad, so sad” notices to all existing government employees that tells them their retirement age just got pushed back to match social security and their compensation formula has changed so they will get much less at retirement. Now, the good news is that more of them will keep their jobs and all of them will have extra time to work and save for their retirement like all the rest of us have to do.

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