On Tuesday night, the Davis City Council agreed to four-year labor agreements with two employee groups including PASEA (Program, Administrative and Support Employees Association) and the city’s Individual Management group – both of whom had contracts that expired in July of 2017. The new contracts will be in place until June 30, 2021.
In a release, the city noted, “One of the key goals of the City Council was to focus on the total costs the City incurs per employee, rather than to focus solely on salary. In that light, the contracts provide both for a 2% annual cost of living adjustment for the duration of the contract, an amount already included as an assumption in the City’s long term fiscal model, as well as a cost sharing mechanism to address unanticipated increases in pensions costs.”
This includes what they are calling “an innovative cost sharing approach.”
Beginning in July 2019, employees in each of these groups have committed to paying an amount up to 1 percent of their salary if pension costs to the city are higher than what’s been projected by CalPERS (California Public Employees’ Retirement System) and included in the city’s long-term fiscal model.
Likewise, if the CalPERS costs are less than currently expected, the employees will receive up to 1 percent in additional salary.
These cost/saving shares will be ongoing. This agreement acknowledges the city’s total costs to compensate employees and results in employees taking a shared risk in those costs and benefits, in addition to the 8 percent of salary most employees in these groups already pay directly toward their retirement costs.
During public comment on Tuesday, Alan Pryor pushed back, complaining that the item was hidden on the consent calendar.
“I have been a real opponent for granting what I think are extravagant and unsustainable compensation increases, particularly as consent calendar items,” he said. He said that they should have put this as a regular item, “particularly in light of the fact that just two weeks ago citizens voted on parcel tax measures, one of which passed, one of which failed.”
He argued that every time the voters have approved a parcel tax or sales tax measure, “the council has turned around and given all of that tax money and then some to the employees.” He said that “no one on the council disputed that.” He added that this was “just two weeks after the election” and criticized them for not having the courage to put this out there prior to the election.
Following public comment, the council pulled the MOUs off consent and then pushed back against some of the contentions by Mr. Pryor.
Mayor Pro Tem Brett Lee agreed with Mr. Pryor that these items should have been agendized as regular items. But he disputed that there was an attempt to hide anything. He pointed out that council has been dealing with these MOUs for nearly a year, and there was simply fatigue on the part of council to discuss them more at this time.
“It ended up on consent, not because we were trying to hide anything,” he said. “It’s really sort of council fatigue at this point.”
Brett Lee noted that the parcel taxes required two-thirds votes “because they specified exactly where the tax monies would go.” Brett Lee did note that “one of the things about maintaining the parks is that it does require staff. So the fact that some of the parks tax money can be used to fund park employee salaries should not be a surprise. It’s clearly stated in the language of the parcel tax.”
At the same time, he pointed out that the ballot language is clear about what they can’t spend the money on.
Brett Lee added, “I just take personal offense that somebody’s going to come to public comment and basically make a bunch of false accusations, when the reality is quite different.”
Robb Davis noted that the city has taken an innovative approach here, putting into the contract that if CalPERS costs outstrip the city model, “the employees will contribute not just one time but in an ongoing way to the pension costs.”
He said that “no council has done that before. No council has created the transparency around a fiscal model and no council has gone to workers and said we need to have a conversation not about base salary, but about total compensation.”
Mayor Davis said that if someone wants to complain that the city has lacked transparency, “then they simply have not been paying attention.
“We have changed the conversation with bargaining groups in the city about what it costs the city to increase salary,” he said.
Councilmember Lucas Frerichs laid out numerous projects undertaken by the city and said, “Guess how that happens folks – it’s by city employees.
“All of those things that I raised do not happen magically,” he continued. “They happen because of the city employees that work every single day to keep this city running.”
As he explained, the projects that voters are approving are in fact completed by city employees and, therefore, while the project money is earmarked for specific purposes, one of those purposes is to pay the employees who carry out the work.
Finally, Brett Lee noted, “These are not extravagant contracts.” They call for a 2 percent COLA for four years – which is what was projected in the Leland Model.
“This is what holding the line looks like,” said Mayor Robb Davis about the contracts. “This City Council has taken seriously the challenge of controlling City costs. While it is a complicated process over which we do not have complete control, we are confident these contracts strike the right balance between maintaining a competitive and talented workforce to provide services to the community and achieving cost control over total compensation.”
According to the city, “The total cost of both agreements for the first year is $191,000. The second year cost is $580,000, an amount anticipated in the long range forecasting model and consistent with the approved budget for FY 18/19. The total amounts for the final two years of the contracts will be dependent on the cost share agreement.”
—David M. Greenwald reporting