City officials declared an impasse in negotiations last Friday, Feb. 24, after six months of negotiations with the Palo Alto Police Officers Association. The decision sets the stage for a possible unilateral imposition of benefit reductions by the city on the union's 82 members.
The two sides began negotiations on July 27, 2011, and according to a letter from the city's negotiator, Darrell Murray, have reached "deadlock" and remain far apart.
The union's previous contract had expired on June 30, 2011, but the terms of that agreement remain in place until a new contract is signed.
The city's struggle with the police union comes five months after it reached an agreement with the Palo Alto Professional Firefighters Association after 18 months of tense talks. The police union, however, has less leverage than the firefighters did because of the voters' decision in November to repeal the binding-arbitration provision in the City Charter. The provision had empowered a panel of arbitrators to settle labor disputes between the city and its public-sector unions, which unlike other labor groups are legally barred from striking. Without binding arbitration, the city can impose its conditions on the police union.
The impasse comes at a time when the city is trying to cope with budget deficits by seeking benefit reductions from all of its labor groups — a process that gained momentum three years ago.
The city's largest labor union, the Service Employees International Union, Local 521, was forced to accept benefit reductions, including a second pension tier for newly hired workers and a requirement to pay a share of health care costs (the city had previously paid all medical costs). The firefighters union agreed to similar concessions in September.
Sgt. Wayne Benitez, president of the police union, told the Weekly that he was surprised by the city's announcement of the impasse, an announcement that he said officials didn't share with the union before publicizing it.
Benitez said he doesn't understand why "the police union, who has a proven track record of cooperating with the city, could not even get the same concessions as the fire department received."
"We offered considerable concessions to the City, but the City denied them," Benitez said.
The city's current budget, which the council passed in June, assumed concessions by both major public-safety unions. City Manager James Keene has stated on many occasions that every labor group would need to make sacrifices to help the city cope with consecutive years of budget deficits — gaps that are largely driven by increases in pension and health care costs.
The city's newly released long-term financial forecast projects a $2 million deficit in fiscal year 2013 followed by budget gaps of $3.7 million and $4 million in 2014 and 2015, respectively.
The impasse creates a major wrinkle in what has been a generally amicable relationship between the city and its police union. While the City Council has engaged in various highly publicized spats with the fire union, it has consistently lauded the police union's willingness to work with the city. In 2009, the union had agreed to defer its negotiated 6 percent wage increases by a year, helping the city close the budget gap.
Keene said in a statement that while the city "greatly appreciated" the union's decision to defer its members' raises for a year, it is now looking for "ongoing structural savings."
"The City has reached agreements that include employee pay and benefit concessions with all of our other labor groups," Keene said. "We expect the POA to participate fully with our other employees in concessions to help ensure the City's fiscal sustainability."
Murray noted in his declaration of impasse that public-safety expenditures have been gradually taking a bigger chunk of the city's General Fund, which pays for basic city services (not including utilities). In fiscal year 2006, 25 percent of the General Fund was allocated to public safety. The number went up to 36 percent in fiscal year 2011.
An average member of the police union gets a salary of $104,013. The average salary and benefits total about $185,616.
"As the City has often stated, it believes that fairness dictates that all employees contribute in a manner that would involve a measure of real and immediate adverse impact — without a wage increase to absorb that impact," Murray wrote. "The Police Officers' Association stands alone in its continued unwillingness to meet this measure of shared sacrifice — sacrifice that the City's lowest paid employees began to experience over two years ago."
Lalo Perez, the city's chief financial officer, said in a statement that the city continues to expend "significant resources" to support fair bargaining with its unions but noted that labor groups sometimes find delay preferable to settlement "because the existing contract with its better compensation package stays in effect until a new agreement is reached.
"It is not feasible or fair to our taxpayers for negotiations without real progress to be prolonged," Perez said.