After months of contentious and ultimately fruitless negotiations, Palo Alto officials have declared an impasse in their talks with the city's largest labor union, setting the stage for the city's fiercest labor battle in nearly five years.
The union represents more than 600 employees, or more than half of the city's total workforce. The group, whose roster includes city planners, librarians, utility workers and technicians, was the first to suffer benefit cuts in the aftermath of the economic downturn, with reforms including a second pension tier and new requirements for employee contributions to health care costs. That effort concluded in 2009 with the City Council imposing a contract on the SEIU following rallies, protests and a daylong strike by the union.
Things have calmed since then, with the city and the union subsequently agreeing to a contract extension that included the council's reforms but gave the union some flexibility in meeting the requirements for health care contributions. At the same time, the council had proceeded to achieve similar benefit cuts with other labor groups, including police officers, fire fighters and the non-unionized group of about 200 managers and professionals.
Now, things are once again heating up. On Monday evening, just before the council went into a closed session to discuss the status of the city's labor negotiations, more than 100 workers crammed into the Council Chambers to wield signs, blast the city stance and warn the council that local departments are now struggling to recruit and retain new employees. Margaret Adkins, chapter chair of SEIU, Local 521, and an 18-year veteran of the city's Public Works Department, said she cannot recall Palo Alto "having the attraction and retention crisis that it's been plagued with since 2010." She was one of several union members who described their shrinking work crews and warned that the staffing situation is creating unsafe conditions for workers and residents.
"Although the city is recovering, we are and will continue to have difficulty attracting and retaining experienced and skilled employees if we don't achieve a solution now," Adkins said. "Palo Alto is allowing competition to steal our valuable resources."
She said her union has proposed that the city offer "longevity pay" to encourage veterans to stay in the city. Instead, the council adopted a provision that requires workers who received training at the city and then departed for other jobs to reimburse the city's training costs. She also criticized the city's actions in the current round of negotiations, noting that council hasn't budged from the proposal it had offered to the union in October, one that the union has found unacceptable.
"We want to work with the city but the city has not been flexible," Adkins' said.
Other workers seconded Adkins' warnings about the exodus of employees. Pete Quiros, a gas worker, said his department is losing many of its "best and brightest" workers to PG&E, which offers higher pay. As a result, the city is forced to hire people with no utility background, who then get training before moving on to another agency or company. Jesse Cruz said he is the last electric operator remaining in the city's Utility Department, which used to have six operators. Four have recently left the city for jobs in Santa Clara, he said, three within the past six months. This, he said, is due to the wage differences between the two cities.
"Since the City isn't paying competitive wages, we're unable to attract real talent as our salaries are below industry standards," Cruz told the council, minutes before it went into closed session.
The city's recent compensation study compared the city with 12 comparable local jurisdictions with the hopes of bringing positions in the city closer to the median level.
But Adkins said the union does not believe comparison study is applicable to all the positions. In many instances, she and other union members said, the city's wages are so far below other those of other agencies that local workers routinely get poached by employers with deeper pockets. Aaron Miller, who works at the city's wastewater-treatment plant, said two of his coworkers were recently offered jobs that paid an extra $10 per hour.
"The people who have the skills to perform the work we do as the water quality control plant make 21 percent below here in Palo Alto of what our neighboring agencies are making," Miller said. "We're getting serious job offers that take our skills and experiences elsewhere."
The council meeting took place exactly a week after the union submitted to the city its last, best and final offer and requested a last, best and final offer from the city in return. Claudia Keith, the city's chief communications officer, said the union's Jan. 7 request prompted the city to declare an impasse. Even with the impasse, she said, the city plans to continue its negotiations with the union. The city's offer, she said, proposes "maintaining the excellent healthcare benefits while balancing short-term costs against long-term obligations."
"While we have declared impasse, that doesn't mean we have concluded bargaining or negotiations," Keith said in an email. "The City remains committed to reaching agreement."
The City, she noted, had offered the union a 4 percent cost-of-living adjustment over the next two years. The union proposed a far bigger raise, 11 percent adjustment over two and a half years.
Nicholas Raisch, an SEIU organizer, addressed the workers before the council's meeting on Monday and said the three main sticking points in the negotiations are health care, wages and the city's recent benchmark study.
"None of this that we're asking for is crazy; none of it is extravagant," Raisch said. "It's only about what's fair."
The union plans to have several meeting for its membership on Wednesday to consider its next actions, should the council refrain from getting back to negotiations.
"We're going to have to have a very serious meeting ... about what our next steps are," Raisch said. "Because the next steps are substantially higher than just showing up at a City Council meeting. And I think we all know what we're talking about."
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