The Heart and Soul of the City
Police Officers Association Binding Arbitration Debate
by Dave Romero, Mayor and Paul Brown, Vice Mayor
“Binding arbitration” has been a buzz recently – in the media, in the community and even within the region. The term sounds bureaucratic, but it goes to the heart and soul of SLO.
Do we, the elected representatives and citizens of SLO, have control over our resources or is control handed over to a “binding arbitrator” who does not live here, knows virtually nothing about SLO and is accountable to no one in the community. This issue is about whether our little corner of democracy thrives or withers over time. It is about not following the path of the City of Vallejo, a bankrupt city with binding arbitration in its charter.
The arbitration rules in our City charter were approved by SLO voters in 2000. The Charter amendment, Measure S, was strongly opposed by the City Council, The Tribune, and a coalition of business, environmental, and other groups. It still passed. The public safety unions worked hard and sold the measure as a way to achieve a “fair compromise” settlement between two parties in a labor dispute. What measure opponents failed to adequately communicate is that binding arbitration isn’t about compromise. It is about either/or winner-take-all decisions made by an outsider that usually bind communities to very expensive labor settlements.
And eight years later, it has happened to us.
As a result of an Oakland based arbitrator’s ruling, we are facing huge unanticipated salary and benefit costs for Police Officer Association (POA) members. This will not improve public safety for our citizens and will diminish City services overall. While the new costs won’t completely gobble up the added Measure Y ½ cent sales tax revenue SLO voted for, a very big bite has been taken. That bite will eat into priority services like street repair, traffic congestion relief, flood control, open space, senior services and even public safety itself by limiting the number of officers we can hire. In fact, we have already put on hold planned Measure Y neighborhood patrol and graffiti prevention improvements.
Over many years, we have supported our police officers with highly competitive salary and benefits (including the public safety “3% at 50” retirement benefit that allows officers to retire younger than most of us, with up to 90% of their pay). We have been very successful in attracting highly qualified officers, including many transfers from larger agencies. We wish to remain competitive, but without one service dominating our resources to the detriment of all other services, and without creating distortions within our internal pay structure. We also don’t want to make it impossible for neighboring cities to compete with us to attract and retain police officers.
But with binding arbitration, your Council has no role in striking the right balance.
Whether or not the binding arbitration process remains a wise one for our city is a matter for the community to decide. Some binding arbitration advocates are already busy clouding the matter with a number of side issues and distractions. To help sift through these issues, we refer you to the companion “10 Things to Know…” column. You can also learn more by attending our Council meeting on July 15, when we will discuss in more detail the impact of the ruling.
10 Things to Know About Binding Arbitration and the POA Award
1. What is binding arbitration? Under binding arbitration, an arbitrator has the power to impose decisions on the parties. For each issue in dispute, the City Charter allows the arbitrator to choose one party’s proposal or the other, but not to “split the difference.”
2. Which employee groups can use binding arbitration? The City has five organized employee “unions,” but binding arbitration applies only to the POA and the Fire Union.
3. Has any group other than the POA ever used binding arbitration? No.
4. POA leaders have said that the City could have avoided arbitration by bargaining “in good faith.” After over a year of negotiations and mediation, the City and POA positions were miles apart. While the City’s final monetary proposal was better than the contracts signed by all other employee groups, the POA’s final proposal would have driven up annual POA salary and benefit costs by an extreme 43%. On the non-monetary side, the City had only six remaining concerns; the POA still had 38 concerns in play. Clearly, the City was bargaining in good faith.
5. Was the POA’s last salary increase in 2005 “only 1.5%,” as their president has said? Yes – a mutually agreed upon amount covering only six months. A 4% salary increase was given during the preceding 12 months, along with other benefit enhancements.
6. How much will the award cost SLO taxpayers? 2008-09 costs, including retroactive payment, will be about $5.8 million ($4.4 million more than budgeted for this purpose) and ongoing yearly costs of about $2.7 million ($1.8 million more than budgeted).
7. Why didn’t the City argue that it couldn’t afford such an award? The term “ability to pay” is defined very literally with a legal threshold that is almost impossible to prove (unless a City is bankrupt like Vallejo). If you can find the money someplace – no matter if layoffs are required or other programs, priorities, or the “rainy day” fund are harmed – then an agency is considered to have the “ability to pay.” So while we argued strenuously against the excessive cost of the POA proposal, we didn’t hang our hat on an “ability to pay” argument.
8. Why didn’t the City set aside enough money to pay the award? We would have had to set aside over $9 million dollars to cover the POA proposal, which included 100% medical coverage for future retirees. $9 million is a huge amount for a City our size – almost the yearly cost of the whole Police Department! We would also have to tell voters: “Sorry, but we must set aside the first 18 months of Measure Y revenue so it is available, should the POA win all of its demands.”
9. Could it have been worse? Yes. Had the POA won its request for 100% medical coverage for future retirees, we would be on the road to horrendous future liability, with pressure to extend the same benefit to other groups. We dodged that bullet – for now.
10. Will the POA award encourage the future use of arbitration in SLO? We don’t know. But statewide experience shows that binding arbitration encourages unions to pursue multiple and excessive proposals because at least some will be granted each time through the process. And it is the cumulative impact of progressive arbitration awards that is the biggest worry of all.
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