On November 26, 2013, the factfinder appointed to hear the labor dispute between the City and the Davis Professional Firefighters Local 3494 issued his report and recommendations. The city has made those recommendations publicly available as required by law.
In November, the city imposed the last, best, and final offer on DCEA, which left the Davis Professional Firefighters as the lone bargaining group without a new contract.
The most recent round of negotiations with Davis Professional Firefighters began in February 2012. Since then, several other bargaining groups – representing a majority of the City’s employees – have reached agreement with the City on contracts containing much-needed economic concessions. Davis Professional Firefighters is the only unresolved unit.
According to the city’s release, “During negotiations the City sought long-term structural changes in employee compensation costs, particularly pension and retiree medical costs. These structural changes are necessary to address expected increases in CalPERS retirement contributions and in the City’s retiree medical liability.”
“The City is pleased that the factfinder agreed with the City’s proposed structural changes,” the release stated. “However, the factfinder recommended a limited approach to health insurance cost sharing and also recommended an additional salary increase not proposed by the City. Whether these additional recommendations are feasible must be evaluated in light of the City’s fiscal condition.”
With DCEA, the factfinder also agreed with the city’s proposed structural changes but attempted to slow down the time table. By a 5-0 vote, the Council would reject those findings and impose their last best and final offer.
Factfinder Charles Askin notes, “A hearing was held in Davis, California, on August 14, 2013 and on August 16, 2013 in Sacramento, California. During the course of the hearing, the parties were given full opportunity to present relevant exhibits and explain their respective positions.”
Gary Messing and Jason Jasmine appeared on behalf of the Union and Timothy Yeung and Ivan Delventhal appeared on behalf of the city.
There were ten issues in dispute: 1. Inclusion of Compensation Survey in Contract. 2. Cafeteria Cash Out Cap for Health Insurance Benefits. 3. Cost-Sharing of Increased Health Benefit Premiums. 4. Employees’ 3% Contribution to City’s Share of Pension Contribution. 5. Retiree Health Benefits. 6. Modification of Uniform Allowance Benefit. 7. Overtime – Conformance with FLSA (Only hours worked for overtime). 8. Salary compensation. 9. Arbitration clauses for grievances (binding) and discipline (advisory). 10. Duration of contract.
As Charles Askin notes, “The City advised that its three highest priorities in these negotiations were its proposals for a cap on the cash-out provision of the cafeteria health plan benefit, a concession that the firefighters pay 3% of the City’s share of the employees’ pension contributions, and a “reform” of the retiree health benefit in the form of both a new two-tier system and a very significant reduction in the cost of the retiree benefit for new hires.”
He adds, “the Factfinder has recommended that each of these priority concessions be adopted, either in whole as proposed, or with minor recommended modifications.”
The factfinding recommended against the city on the comparison survey, noting, “the City proposes to eliminate the compensation study language in the contract because it is “flawed” in favor of allowing the parties to conduct their own comparability studies for negotiations. The City’s position is not persuasive and is viewed by the Factfinder as one that would hamper, not improve, the parties’ ability to conduct successful negotiations, particularly on the most vexing issues of compensation.” However, they are willing to modify the list of agreed-upon jurisdictions.
On cafeteria cash out, they found for the city, “There is widespread recognition that the existing cash-out benefit for cafeteria health benefits is a very generous. Both this Union, and all of the other employee-represented organizations with whom the City negotiates, agree that this generous and costly benefit should be reduced, significantly. The City’s proposal of a final $500 cap is more consistent with the principle of internal equity based on the negotiations in other units; moreover, it is a more financially sound proposal that contemplates a “final” lower cap, consistent with the recognition of both parties (and the Factfinder) that this very generous benefit should be curtailed in the current (and likely future) economic climate.”
On cost-sharing for medical insurance benefits, Mr. Askin writes, “In view of the widely-recognized fact that medical insurance costs are increasing at rather high rates, the proposal that the employees bear the responsibility for (expected) future increases above an existing base rate is prudent, equitable, and consistent with the principle of internal equity in view of the acceptance of such clauses in nearly all of the other City bargaining units; thus, the Factfinder recommends that the Union join with its sister bargaining units and accept the proposed cost-sharing concept.”
On employee contributions to pensions, he writes, “It is clear, and recognized by both parties, that the dramatic increase in the cost of pensions, especially for safety employees, resulted in a wide-spread recognition that employees are expected to take more responsibility for the security and benefit levels of the pensions they will earn and receive upon retirement. Both parties accept the concept that the Firefighters should begin, as the police unit is already doing, to pay 3% of the City’s share of these costs. In view of the fact that the police unit began paying for the 3% additional contribution for the duration of the last contract (and the current contract), the Union’s proposal to phase-in the increase at a slower pace is not persuasive. The Factfinder recommends that the parties adopt the City’s pension-sharing contribution, subject to the City’s agreement to grant the pay raises recommended below.”
On retiree health benefits, “It is implicit in the Union’s (very reluctant) concession on the principle of a two-tier retiree benefit that both parties recognize and acknowledge that the rising costs of retiree health benefits is a vexing issue that requires the “strong” response of a two-tiered system, with different entitlements, especially because of the legal impediments of making changes for currently retired employees and the equity considerations of not implementing significant reductions in benefits for current employees who, understandably, have come to rely upon their expectations of the current benefit structure. Having accepted the need – and importance – of beginning a long-term solution to the cost crisis that is emerging in the retire medical care area, it is clear that the City’s proposal provides significantly greater savings than the Union’s modest change in the benefit entitlement for new hires when they retire and reach the age 65. Accordingly, the Factfinder recommends that the parties adopt the City’s proposed Option 1 for retire health benefits of new employees hired after the ratification of the next contract (not, as proposed, on January 1, 2013).”
“The City proposes that the salary for the firefighters should be reduced by three percent, back to a prior decreased rate that was terminated upon expiration of the predecessor contract,” Mr. Askin writes.
The city acknowledges that “other bargaining units have received salary increases in the context of (and in exchange for) concessions by other bargaining representatives even on some of the same subjects addressed in this Report.” Mr. Askin finds that “In these circumstances, the City’s proposal to reduce salaries by 3% (and make the reduction retroactive) is not appropriate in the event the Union agrees to all (or even most) of the above recommendations. Assuming that the Union agrees to these recommendations, it is the Factfinder’s view that the City must step to the plate and “pay” for some of these concessions in the form of higher salaries in the circumstances of significant further lost “total” compensation to be borne by the unit employees.”
In a ruling that the city is sure to reject, the factfinder finds the union proposal for “binding arbitration” for grievences as “reasonable, even modest and conservative, proposal for the resolution of disputes in the modern labor environment, especially in a progressive area like the City of Davis (and the Northern California region). It will provide for the final resolution of at least contract interpretation disputes in a more expeditious manner, and may prove to be less costly (at least to the City). The Factfinder recommends the adoption of both proposals, especially in the context of the substantial concessions by the Union that are recommended in this Report.”
Finally, Mr. Askin notes that both parties are agreeable to a three year contract effective through June 30, 2016.
As we noted at the outset, the city took relatively favorable findings in the DCEA dispute and rejected efforts by the factfinder to slow down and moderate the process. We expect a similar result here.
—David M. Greenwald reporting