(May 11) All three of the appeals filed by the San Bernardino City Professional Firefighters in February challenging U.S. Bankruptcy Judge Meredith Jury’s rulings giving the city of San Bernardino relatively wide latitude in realigning its spending priorities were rejected on May 7 by the U.S. District Court judge who considered them.
San Bernardino, which filed for Chapter 9 bankruptcy protection in 2012 and has delayed and postponed payments to dozens of its creditors and vendors, has also sought to regain its financial footing by reducing its staff costs through lower employee salaries and pensions. The latter objective was particularly difficult to achieve, as Section 186 of the city’s charter, put into place as the result of a citywide vote in 1939, requires that the city’s public safety employees – firemen and police officers – be paid on a scale equal to the average pay of policemen and firefighters in ten similarly-sized California cities.
In its bankruptcy filing, San Bernardino cited its $180 million in ongoing unfunded liabilities and $49 million annual operating deficit in seeking the permission of the court to suspend its financial obligations and commitments to reachieve solvency, balance its books and get its fiscal house in order. The city imposed contracts on its police and fire unions in January 2013 in accordance with its financial recovery strategy, reducing those employees’ take home pay by more than 13 percent. The firefighters resisted that move.
In September 2014, Riverside-based Federal Bankruptcy Judge Meredith Jury acceded to the city’s request to abrogate its labor contract with the firefighters union and impose a contract with terms more favorable to the city and less advantageous to the firefighters. At that time she also reaffirmed an earlier ruling she had made imposing a stay on any litigation against the city on financial issues while the bankruptcy is being heard. Subsequently, Jury rejected another motion by the firefighters union for relief from the stay.
The union representing the firefighters appealed all three of Jury’s rulings. Last week, Judge Otis D. Wright II, a United States District Judge on the United States District Court for the Central District of California, rejected those appeals, siding with Jury in holding that the city was within legal bounds in imposing temporary economies on its public safety division and safety employees in seeking to map its way out of insolvency.
In rendering his decision, Wright, once a public safety employee himself who worked as a deputy sheriff in the Los Angeles County Sheriff’s Department from 1969 to 1980, was critical of the firefighters’ union for its “stubbornness” in the face, of what he characterized as the “city’s willingness to meet and compromise.”
Wright sized up as “merit-less” the union’s claim the city had not complied with state law in its negotiations, saying it “is quite apparent from the wealth of e-mail traffic between the parties” that the “union’s claim that the evidence regarding reasonable efforts is ‘scant’ is a misrepresentation of the evidence.”
Wright’s rulings extend only to the issues raised by the firefighters union in the context of Jury’s ruling’s pertaining to the bankruptcy case in federal court. The rulings are unlikely to have any direct impact on either of two lawsuits filed in state court by the firefighters union on April 9 and April 10. The first of those suits asserted the city has run afoul of the aforementioned Section 186 of the city’s municipal charter in imposing rampdowns on firefighter pay. The second suit takes issue with an October vote of the city council which altered the city’s pension plan for its firefighters and shuttered one of the fire department’s fire stations while implementing “constant staffing,” which involves a strategy by which the department schedules a minimum number of staffed fire engines or paramedic units at all times and apportions those crews in numbers to correspond with peak usage periods in an effort to reduce manpower demands and head off excessive overtime.
Last year, the city council collectively sought to maneuver around Charter Section 186 by placing Measure Q on the November ballot. That initiative was aimed at eliminating the requirement that the pay of police officers and firefighters in San Bernardino be computated on the basis of an average of their counterparts’ salaries in like-sized California cities. Measure Q was stridently opposed by the police and fire unions who ran a well-funded campaign against it, and the measure failed.
These legal actions proceed in an atmosphere in which San Bernardino is on the brink of radically reorienting fire department pay and deployment issues, and perhaps divesting itself of its in-house fire department altogether.
As early as 2012, city officials were kicking around the concept of dissolving the municipal fire department and contracting with another provider of fire service, most likely a governmental entity, to staff the city’s fire stations. Given San Bernardino’s weak financial picture and its ongoing bankruptcy in which it was withholding payment from the lion’s share of its vendors and service providers, no fire protection operations were enthusiastic about taking on such an assignment. In an early indication of the difficulty San Bernardino would have in finding an outside agency to come in and act as its contracted fire department, California Department of Forestry and Fire Protection Fire Chief Ken Pimlott in November 2013 responded in writing to the city’s solicitation, stating that “given the current fiscal instability faced by the city of San Bernardino, it does not meet the criteria to be considered for a cooperative agreement.”
Undaunted, the city council in August 2014 directed city manager Allen Parker to seek bids from a host of agencies that might provide fire services. Parker approached the county, the California Department of Forestry and Fire Protection, and the fire departments of some surrounding cities, in particular Colton, which has a cooperative service arrangement with the city of Loma Linda, to see if they would, in exchange for a set fee, take on the burden of providing fire protection to the county seat.
Pimlott reiterated his lack of interest in having his agency take on fire protection duties in San Bernardino. This slight miffed members of the city council and in January, they directed Parker to look into pursuing a possible lawsuit against the California Department of Forestry and Fire Protection, which provides fire protection in the neighboring city of Highland, to force that state agency to bid on providing fire and emergency medical services for San Bernardino. Cooler heads prevailed, however, and city attorney Gary Saenz did not actually initiate that suit.
Within the last fortnight, it was disclosed that the San Bernardino County Fire Department, the Colton Fire Department and Centerra Group, a private company, are entertaining the notion of making bids to provide fire service under a contractual arrangement with San Bernardino. On May 5 representatives of those two public agencies and Centerra, which has its corporate headquarters in Palm Beach Gardens, Florida, showed up at a closed-door informational exchange meeting at which the prospect of those entities completing applications to provide that service to the city was explored.
It is not clear whether the county fire department or Colton will make such an application.
Centerra Group, a company also known as G4S Government Solutions, is a multidisciplinary service provider, including fire protection to various cities and government agencies. Centerra appears purposed to seek the contract. The city wants those entities to present their proposals, including costs in full, by May 20.
Ascertaining whether the city will be able to obtain significant savings by closing out its fire department and meet its fire safety service responsibility through an alternate arrangement is of some moment since the city council is slated to vote on its bankruptcy exit plan on May 22, which Judge Jury has requested be submitted to her by May 30.