Now is not the time to go wobbly

If breaking a deadline in Davis were taken literally, ours would be a sanguinary city. Fortunately, we live in figurative times.

On July 1, the “deadline” for new labor agreements for city employees came and went. Seemingly every time a contract has come due in Davis in the past decade, even when the City Council was giving away the store, the deadlines have been missed.

All the old contracts expired the last day of June. But those deals — ones the city manager and the council concede are unsustainable — live on. Their terms remain operative until new accords are agreed to or an impasse is reached and the council imposes its last, best and final offer.

Three weeks ago, the City Council unanimously approved a new contract with the police management employees. There remain seven more bargaining units, representing 98 percent of the city’s workforce, without new deals.

A fear expressed to me by two members of the council is that their colleagues may go wobbly. The unions are not budging, not accepting the compromises necessary to allow the city’s expenses to match its revenues. And they worry there may not be a majority on this council willing to declare an impasse and impose terms.

Instead, the majority prefers to wait. But waiting comes with real risks.

The fiscal year will be half over in a few weeks. In its adopted 2012-13 budget, the City Council assumed we would achieve $4 million in savings under new, more cost-conscious terms in the reformed labor contracts. Davis needed to reduce expenses by that much to balance its budget.

As long as the old terms remain in place, there are no savings. Come New Year’s Day, the city will have spent roughly $2 million more on its employees than it had budgeted this fiscal year, because everyone but the six in police management is still working under expired deals.

One reason some on this City Council may be apprehensive about trying to impose terms on the city’s workers is the experience of the previous council.

On Dec. 4, 2009, Davis declared an impasse with the Davis City Employees Association after eight months of fruitless contract negotiations. The DCEA membership voted to reject the city’s last, best and final offer on Dec. 17.

A city ordinance and state law set forth procedures that the two parties had to follow before the city could legally impose terms. Over the following six months, those procedures were slowly playing out.

However, the city felt that the DCEA was not cooperating. On May 14, 2010, in a fit of pique, Davis unilaterally decided that the required “fact-finding” process was over and that the council could impose its last, best and final offer. It did so 11 days later.

Unfortunately, the council got bad advice from its attorneys. Davis had no lawful right to unilaterally end the process.

Shawn P. Cloughesy, the chief administrative law judge for the Public Employee Relations Board, ruled in October 2011 that Davis had violated its own ordinance and various sections of state law. As a consequence, the terms of the DCEA’s previous contract, dating back to 2005, were put in place, and the city was required to repay the members of that union roughly $800,000 they had lost under the imposed conditions.

It is that costly misadventure that appears to be weighing heavily on this council.

In the meantime, none of the seven employee groups without contracts has a strong incentive to accept a new deal that reduces the amounts their members are getting under the old agreements. Short of mass layoffs, the workers who hold out the longest probably will suffer the fewest consequences.

So the employees prefer to wait.

What is unclear, because the negotiations are conducted in closed session and everyone is sworn to secrecy, is exactly what the City Council is now offering. The best hint comes from the terms that the police management group — one assistant chief, one captain and four lieutenants — agreed to.

The most important change is a gradual reduction in cafeteria cash-outs. Employees whose medical plans cost less per year than a fixed cap — now $20,000 — can currently cash-out that “savings” for as much as $18,000 on top of their salaries. By 2015-16, the cash-out will itself be capped at $6,000 per year per employee.

Other significant modifications include reducing the city’s medical inflation risk, requiring the employees to pay more toward funding their pensions and, if the Davis Police Officers Association agrees to it, cutting back a bit on the retiree health benefit.

The police management contract also comes with a 5.1 percent pay hike. The assistant police chief, for example, was earning a $138,700 salary under the previous MOU. By 2014-15, he will make $7,100 more.

The hope behind these changes is that the city will be able to better manage its future costs. But it’s unclear to me whether this contract succeeds even in that. It reduces some costs. It does not tie the annual growth in total compensation to the growth in city revenues.

With medical premiums going up 10 percent per year and with CalPERS requiring Davis to pay millions more to fund employee pensions, I don’t see how this gets us on a sustainable path.

Even worse, if the council goes wobbly with the other labor groups, huge cuts in city services might be needed this year to fill in the hole in the budget caused by the delay in achieving new contracts.

— Rich Rifkin is a Davis resident; his column is published every other week. Reach him at Lxartist@yahoo.com