SB Council Imposes New Contracts On All Unions

Declaring negotiations with most of the city’s various bargaining units to be at an impasse, the San Bernardino City Council on January 28 voted to impose redrafted contracts on all city employees with the temporary exemption of police management. Once all eight bargaining units are included in the contract adjustment regime, the city will realize savings of almost $26 million  annually from those employee pay and benefit reductions.
Several of the city’s unions protested against the move, saying they were still in the process of making offers and counter-offers. City attorney Jim Penman said the city, which filed for Chapter 9 bankruptcy protection in August, was on sound legal and procedural footing in unilaterally enforcing the salary and benefit cuts.
The city is wrestling with an “institutional” budget deficit which in 2012-13 is equal to $46 million less in income than expenditures. The $26 million in city staff-related reductions were part of a pendency plan submitted to U.S. Bankruptcy Judge Meredith Jury in November. While the city’s representatives indicated at that time that the cuts could be effectuated in short order, negotiations with at least four of the eight unions representing the city’s employees have stalled, with three of the bargaining units walking away from the table at one point or another. In the last several weeks, the city has grown more and more insistent that employee concessions were urgently required. Last week, city officials, buffeted by the pending departure of city manager Andrea Travis-Miller to take a position in Los Angeles County as the director of the San Gabriel Valley Council of Governments and the pending departure of finance director Jason Simpson, made a last ditch effort to mediate a resolution that would allow it to make good on the pendency plan. When that effort fell through, the council scheduled an emergency meeting for Monday at which the imposition of the new contract was under consideration.
By that time, four of the city’s employee bargaining groups had agreed to the revamped contract terms requested by the city. Three others, the union representing middle managers and the police and fire unions, had not. The eighth group, the police management union, submitted a new proposal that day, which city officials had not fully analyzed at the time of the vote. A decision with regard to the police management group’s proposal was put off until February 4. The council then took up the newly configured employee labor agreements for the seven bargaining units, which called for requiring employees to pay a greater portion of their pension costs through the California Public Employees Retirement System; the suspension of  vacation and sick leave payouts; along with the total elimination of retiree medical benefits for new hires, as well as rescinding a 9-percent salary bump for police and fire employees.
Following nearly three hours of discussions in a closed, executive session, the council took up each of the contracts with the seven bargaining units separately. Council members Fred Shorett, Virginia Marquez, Rikke Van Johnson and Wendy McCammack voted in favor of the redrafted contract terms in all seven cases. Councilmen John Valdivia and Chas Kelley opposed all seven. Councilman Robert Jenkins joined with Shorett, Marquez, Johnson and McCammack on the four resolutions relating to the bargaining groups that had accepted the terms but voted with Valdivia and Kelley on the three resolutions relating to the groups that had not accepted the new terms.
The city’s bankruptcy filing has forced a number of political adjustments and accommodations that were not predicted. The necessity of the filing has resulted in something of a truce between Democratic Mayor Patrick Morris and City Attorney Jim Penman, a Republican who unsuccessfully opposed Morris in his 2005 and 2009 mayoral runs. As the city was moving into bankruptcy, Morris, contrary to his party’s pro-public union orientation, found himself at odds with the city’s public unions. Penman previously was an advocate for the city’s public employee unions, despite his GOP ties. In the face of challenges to the bankruptcy, including ones by the California Public Employee Retirement System (CalPERS), which runs the state’s public employee pension system, and at least three of the city’s public employee bargaining units, Penman now finds himself at odds with those groups and, reluctantly, aligned with Morris. McCammack, who has historically been very supportive of the city’s public safety employees, an ally of Penman and an opponent of Morris, has herself taken stands in support of the pendency plan, including forcing the police and fire unions to accept the economies being dictated to them. Valdivia, Kelley and Jenkins, all of whom were elected with strong police and fire union support, have continued to question the need for drawing down police officer and firefighter pay. Without the backing of Penman and more crucially the votes of McCammack, the three do not have the political muscle to exempt the city’s police officers and firefighters and their powerful unions from sharing in the budgetary sacrifices.
Penman, in fact, was a prime mover behind and advocate for the council’s action on Monday, as it will now enable him to return to bankruptcy court and provide Jury with tangible evidence that the city is earnest in applying the pendency plan. In addition to the savings to be achieved by the employee and payroll reductions, the city is asking for Jury to ratify deferring close to $35 million in debt over the course of 2012-13, with a similar suspension of its payments to creditors and vendors over the next couple of years, until such time as the city’s income again meets its expenditures and solvency is achieved.
CalPERS is among those creditors to whom the city is deferring payment. The city has not made any payments into the pension system since the middle of last year. The state public employee pension fund manager has contested the city’s plan and its legal authority to withhold those payments. Monday’s move will strengthen Penman’s ability to argue in court that the city is reining in its spending uniformly and should be permitted to structure its short and long term payments in a way that will allow it to eventually move out of bankruptcy, even if that entails deferring payments to such entities as CalPERS.
Meanwhile, some of the city employee unions, such as the San Bernardino Public Employees Association and the San Bernardino Police Officers Association were miffed with the city council’s unilateral action in imposing the contract changes and were contemplating filing complaints with the state Public Employees Relations Board.
On the council, Valdivia in particular was critical of the move. Morris, however insisted that the cutbacks, imposed or not, had to be made to expedite the bankruptcy protection process and pave the way for the city to meet its financial obligations in the future.

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