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Union rejects Palo Alto's 'last, best, final' offer

Original post made on Oct 22, 2009

Union negotiators Tuesday afternoon rejected a "last, best and final offer" from Palo Alto city administration during a tense negotiation session. City representatives then declared the negotiations "at an impasse," City Manager James Keene said late Wednesday afternoon. The impasse may increase the odds of an employee strike.

Read the full story here Web Link posted Thursday, October 22, 2009, 1:54 AM

Comments (97)

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Posted by A Noun Ea Mus
a resident of Professorville
on Oct 22, 2009 at 2:49 am

"last, best and final offer" ?

Was any negotiation involved, in any sense of the word?

Or did management just stick to the original position?

Can't tell from the article. Are the city negotiators being silent as to what their "last, best and final offer" actually consisted of? Or is PA Online choosing not to publish it?

Nothing new on PA SEIU webpage either.

Also..

As to the 10 million dollar hole needing to be plugged....

"The plan is to get about a third of the funds from a new business license tax on the Nov. 2 ballot. A second $3 million would come in the form of savings from city employees; primarily through tightening expenditures and increasing efficiency;
amd by deferring some capital-improvement items."

Do I understand this right?.....1/3 ($3 million plus) is planned to be gotten by a new business tax which might not pass.....Another $3million via reducing expenditures, improving efficiency, deferring expenditures AND in addition the city wants the city workers to give up $3 million. (OR is that part of the second $3million?)

So then 2/3 of the gap could be filled via the business tax and improved management? And to save $3million the city is willing to force a strike, not (apparently) even try to negotiate any settlement?

If the business tax doesn't pass then the city loses "street cred" as regards everyone doing "their share". If the business tax passes and then (supposedly) 2/3 of the gap can be bridged, why would the city force a strike without trying to negotiate even a tiny bit from their apparently intransigent position?

Putting myself in the city management position....did anyone ever try this...."OK we came up with this formula to save $3million via negotiations with you and your union. The city business tax just passed which will bring in 1/3 and we estimate we can save another 1/3. We need to see a $3 million savings from your wages and benefits and came up with one plan. But that is apparently unpalatable to your members. However you have shown a willingness to play ball as regards reducing expenditures. So show us a workable plan". Or suggest finding an arbitrator to work out one.

Something is fishy and doesn't make overt sense.


 +   Like this comment
Posted by Maxed out
a resident of Greater Miranda
on Oct 22, 2009 at 6:06 am

I doubt public sentiment is with any unions right now. We are repeating the late 70s, and I recall the sentiment and results then. Remember Reagan breaking the ATU? This pretty much summed up how we felt at that time, and I am pretty sure we are at that point again.

I was still pretty young, and didn't understand the public joy at breaking the stranglehold of unions, not having yet suffered the dubious pleasures of ever increasing taxation combined with ever increasing insecurity, unemployment, costs of living, loss of businesses who pay the taxes..watching my lifestyle erode while those with an entitlement belief keep demanding more and more, not having yet caught on to the fact that those who pay the bills are maxed out and fed up.

But, now I understand.



 +   Like this comment
Posted by let's be real
a resident of Charleston Gardens
on Oct 22, 2009 at 6:44 am

Right now public sector employee wages are much higher than private sector. Unfortunately for public employees, their wages and benefits will need to come in line with the private sector. That's just the way economics works.


 +   Like this comment
Posted by A Noun Ea Mus
a resident of Professorville
on Oct 22, 2009 at 7:19 am

"Remember Reagan breaking the ATU? This pretty much summed up how we felt at that time, and I am pretty sure we are at that point again."

And at "this point" the new Secretary of Labor took over announcing "there is a new sheriff in town".

Different points in different times.

Different publics and different joys.


 +   Like this comment
Posted by I know
a resident of South of Midtown
on Oct 22, 2009 at 7:45 am

Excuse me but how can Jim Keene ask for people to give up salaries and benefits when he himself does not practice what he preaches. Why doesn't Jim give up his extras, like his city home loan and car who the city pays for along with his med benefits and retirement. Increase that home loan and make him pay for his own car and gas. If anyone can afford such increases it's Keene. A city leader should lead, by showing his fellow workers he is willing to help the financaly difficulties with the city. And not taking a cut in cost increase of your salary is not enough, as you are making city workers give up alot more then that! Shame on you!


 +   Like this comment
Posted by lazlo
a resident of Old Palo Alto
on Oct 22, 2009 at 8:09 am

I guess it's all about how a paper editorializes a story to sway public reaction. Weekly says union rejected city's last best offer... maybe it should read city rejected unions last best offer. The Weekly has always towed the city line. Why not headline the story that both sides are at an impasse, give us the information, and let us form an educated opinion without your editors biased views on the story and leave the editorials for the opinion page.


 +   Like this comment
Posted by In the know
a resident of Downtown North
on Oct 22, 2009 at 8:15 am

"However you have shown a willingness to play ball as regards reducing expenditures. So show us a workable plan".

Yep they tried that. The response was "Not our problem". Spun as "We'd like to work with and avoid a strike but it's up to the city to provide a solution.".


 +   Like this comment
Posted by Lead by Example
a resident of Midtown
on Oct 22, 2009 at 8:48 am

Put Keene and his top brass on a serious fiscal diet themselves. Lead by example!


 +   Like this comment
Posted by Open Gov
a resident of Another Palo Alto neighborhood
on Oct 22, 2009 at 9:00 am

A Noun Ea Mus,
It sounds like there is some bad information out there on the business tax, measure A. If it passes next month the "$3 million" estimate in new revenue won't be a possibility until 2012, when the tax goes fully into place. By attempting to fix a current budget shortfall based on a future source of such a small amount of estimated revenue without accounting for future deficits is clearly taking a page out of the Lehman Brothers playbook....


 +   Like this comment
Posted by Retired Staffer
a resident of another community
on Oct 22, 2009 at 9:17 am

It's my understanding---through the ALWAYS (wink) reliable jungle telegraph---that the City just hired 12 new employees at about $1.3 million in wages and benefits. What deficit?


 +   Like this comment
Posted by chris
a resident of University South
on Oct 22, 2009 at 9:48 am

[Post removed by Palo Alto Online staff.]


 +   Like this comment
Posted by wqcp
a resident of another community
on Oct 22, 2009 at 10:02 am

Do you know anyone that could walk off the street and run the citys waste water treatment plant. Good luck with that.


 +   Like this comment
Posted by Marvin
a resident of Charleston Gardens
on Oct 22, 2009 at 10:02 am

While I agree that the unions may not get much sympathy these days, considering their generous salaries and pension plan from the city, it is also hard to feel sympathy for the city manager and council. They have not taken steps in years past to do something about the runaway costs of our employees and they have been over generous with their bonuses to managers (how many of you get a big bonus for just showing up to work?).
Now they want to ding small employers, children that sell lemonade and babysit with an unfair tax in order to continue to fund this fiasco.
Vote no on Measure A and do not re-elect Larry Klein to the council


 +   Like this comment
Posted by Brenda
a resident of Leland Manor/Garland Drive
on Oct 22, 2009 at 10:32 am

Marvin,

Get YOUR facts straight. The business license tax only applies to people who work a 40 hour week; I doubt many lemonade sellers do that!


 +   Like this comment
Posted by you can do better
a resident of Adobe-Meadows
on Oct 22, 2009 at 10:34 am

Come on editor, I know you want to get the news out there but at least use a spell-checker!

"in the five=months"
"importannce"
"amd by deferring"


 +   Like this comment
Posted by pat
a resident of Midtown
on Oct 22, 2009 at 10:38 am

I agree that it's hard to have sympathy for either side. The city refuses to cut non-essentials (which would mean cutting staff, thus saving money).

I don't know if the city recently hired 12 new staffers, but it did hire a Sustainability Coordinator. Not what I'd call essential.

Here's one reason why public sentiment is against unions. No Teacher Left Behind at
Web Link


 +   Like this comment
Posted by Resident
a resident of Crescent Park
on Oct 22, 2009 at 10:39 am

This does not surprise me. This city has been so fiscally mismanaged and will continue to be. We have how many projects that were waiting to be approved, yet, our city finds the need to bully new projects rather than pushing them through for the sake of revenue, Alma Plaza, Edgewood, JJ&F, Stanford Shopping Center, and Stanford Hospital just to name a few. We are so tight with our requirements yet we cannot afford to be. Somehow the city has found some $500,000 to remodel Lytton Plaza were protests and rebellious kids gather?! Go figure. Change needs to come from the city manager regarding the "Palo Alto process" to get new businesses into our city, otherwise we will be left with shambles as our fire and police union contracts begin.


 +   Like this comment
Posted by Marvin
a resident of Charleston Gardens
on Oct 22, 2009 at 10:40 am

Brenda--you need to get your fact straight. Read , for example, the Weekly editorial against Measure A

Web Link

"As for the proposed tax, the old saw that the "Devil is in the details" seems to be holding true. The text of the Measure A ordinance, as distributed in full to voters in the sample-ballot pamphlet, is lengthy and confusing, with requirements that are already being amended by administrative clarifications. For example, the wording of the ordinance would require juveniles who are operating businesses to file sworn statements in order to be exempt. Non-profit organizations would also have to file such statements.

The city now has issued administrative language stating that it won't require applications for exemptions from juveniles after all, stating that was not the intent of the ordinance. Nor will it go into homes to audit home businesses, another provision contained in the measure, according to recent clarifying statements"

They are already changing the measure before it has been voted on--as of now juveniles and home businesses are not exempt. Hours are irrelevant.


 +   Like this comment
Posted by Judy
a resident of Barron Park
on Oct 22, 2009 at 10:41 am

Talk about financial mismanagement. How many libraries do we have compared to cities around us?


 +   Like this comment
Posted by A Noun Ea Mus
a resident of Professorville
on Oct 22, 2009 at 10:52 am

Lazlo,

I was reluctant to come to the conclusion that PA Online is using the headline spin for effect. But the way the headlines are spun is clearly an attempt at editorializing.

When "last, best" is the same as "first, worst".

And one wannabe City Council member grandstanding against SEIU endorsement is spun into a supposed spat among all the candidates.

If it's true that a passage of Measure A wouldn't see any increased revenue until 2012, does that totally negate the impact as regards the financial shortfall? Isn't the plan to fix "long term" problems as well (asssuming the recession lasts until year 2050 and using that spin to reduce wages and benefits, floating a Measure which seems to have little to no chance of passing for political spin?).

BTW, what is the OBJECTIVE assessment of whether or not Measure A will pass? I don't mean the Online Poll as that has an inbred selection bias.

as for

"Do we need union workers to staff the city?

I'm sure there are a lot of unemployed people who would be willing to work for a lot less than these whiners."

Well the city workers have been unionized for many years as is their legal right. You may whine about that all you like, but there are legal aspects and unions aren't exactly in as weak a position as when Reagan was President.

But yeah, we can make you city manager, rent a big bus and have you go to the Home Depot parking lot and pick up people to climb the utility poles, run the library, fix the streets, inspect the buildings.....all for as cheap as can be....sounds like a comedy film for sure.

"Mr. Bean Runs Palo Alto"


 +   Like this comment
Posted by A Noun Ea Mus
a resident of Professorville
on Oct 22, 2009 at 11:06 am

As regards the link Pat posted with the label "No Teacher Left Behind".

The reason that the school year is being reduced is because of a budget shortfall. Yes, maybe if the teachers were willing to work for minimum wage, pay for all their own healthcare costs, the kids could go to school 7/24/365 for 12 hours a day and rival Japan in success and failures of various kinds (as we seem to be doing in certain ways).

From the web link posted by Pat..

"The new contract, approved by 81 percent of voting teachers, stipulates 17 furlough Fridays during which schools will be closed, with the first happening Oct. 23. The teachers accepted a concurrent pay reduction of about 8 percent, but teacher vacation, nine paid holidays and six teacher planning days are left untouched."

The image of sharks in the water smelling blood comes to mind. The teachers got a pay reduction of 8 per cent, furlough days, etc. But they are being spun as the problem. Amazing spin. Teachers who follow this notice this attitude migration potential.


Note also that a snide "Obama went to a private school.

"The cuts come as Obama, who graduated from a top private high school in Hawaii, says U.S. students are at a disadvantage with other students around the world because they spend too little time in school."

Here are some links to real solutions. And to elicit whining by those perceived to be modern day John Galts.

Web Link

Web Link

And we have people whining about a simple business tax, yet salivating to squeeze out more and more and more from city workers, teachers, etc.


 +   Like this comment
Posted by stretch
a resident of another community
on Oct 22, 2009 at 11:15 am

Lineman, where are you when we need your input?


 +   Like this comment
Posted by Jon
a resident of Another Palo Alto neighborhood
on Oct 22, 2009 at 11:38 am

If you compare PA to other cities, they are out of line. The city needs to take a firm stand here if necessary by laying off people doing esotoric things that aren't really necessary....


 +   Like this comment
Posted by Lead by Example
a resident of Midtown
on Oct 22, 2009 at 11:51 am

Another big cost saving would be in getting rid of all those big shots who ordered that the California Avenue trees be summarily clear cut in one fell swoop.


 +   Like this comment
Posted by LivingWithLess
a resident of Palo Alto High School
on Oct 22, 2009 at 12:05 pm

Is time for PA to take a stand to lower cost of bloated PA bureaucracy. The cost of PA city services are way out-of-line with other cities of our size. If the union workers don't want to work given their current high salaries and overly generous pension benefits that PA offers its civil employees, let's replace them with people who are out of work and want a job. It's not just the members of the SEIU, we need to control costs across the board for all PA gov't services & employees. The city needs to live within its means. Is like raising a family, if we make less, we have to spend less. Can't keep living on borrowed funds from your credit card.


 +   Like this comment
Posted by Resident
a resident of Charleston Gardens
on Oct 22, 2009 at 12:31 pm

A big "thank you" to our Police Department for agreeing to give up their raises this year. The City asked for their cooperation in reducing salary and benefit costs to the City this year, and the Police Union came through for them. City Council, Management staff and residents of Palo Alto should appreciate their willingness to cooperate.

Unfortunately, members of the SEIU have not been as cooperative.


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Posted by Lineman for the City
a resident of another community
on Oct 22, 2009 at 12:33 pm

Stretch:
"Lineman, where are you when we need your input?"

Isn't the definition of insanity "doing the same thing over and over again and expecting the same results"?

I've been down this road too many times.


 +   Like this comment
Posted by Charles
a resident of Midtown
on Oct 22, 2009 at 12:43 pm

Details of the City's last, best offer should be on the city website later today. The community can then evaluate whether it feels fair compensation for city employees is being offered.

Union management clearly does not believe the city compensation package offered is fair and may be willing to ask their members to strike to prove their solidarity.

A strike before the November 3 election is unlikely since the union is hopeful that new council members may be more favorable to their requests/demands than outgoing council members. The union certainly does not want it known that union membership is working to elect Gail Price, Corey Levens, and Nancy Shepherd.


 +   Like this comment
Posted by Janice
a resident of Palo Alto Hills
on Oct 22, 2009 at 12:49 pm

How do you know the union is helping elect Gail Price, Corey Levens, and Nancy Shepherd?

Why would they do that, unless they felt these 3 council candidates were more favorable toward union positions and union compensation demands.

Those 3 council candidates are good people and do not believe taking union money, volunteer labor, and printed campaign pieces with the value $1,000's per candidate is 'a conflict of interest.'

If it waddles like a duck, swims like a duck, and quacks like a duck; it's a duck.


 +   Like this comment
Posted by fedup
a resident of Old Palo Alto
on Oct 22, 2009 at 12:54 pm

Does anyone know where I can find how much of the City's budget is allocated towards current UNION wages and how much for retired worker entitlements?


 +   Like this comment
Posted by Sam
a resident of Midtown
on Oct 22, 2009 at 12:59 pm

Here is how I think it will all end:

The union will go out on strike for about two weeks. There will be some disruptions of service, probably including some intentional stuff.

The new PA council will wring its hands, pretend to be for 'social justice', then give in to unions demands, although there will be some minor face-saving give-backs by the union.

Then the utility tax will be increased, in order to cover the budget deficit.


 +   Like this comment
Posted by Lineman for the City
a resident of another community
on Oct 22, 2009 at 1:04 pm

Isn't the definition of insanity "doing the same thing over and over again and expecting the same results"?

I meant "expecting different results"

Doh


 +   Like this comment
Posted by Lineman for the City
a resident of another community
on Oct 22, 2009 at 1:06 pm

sam:
..."then give in to unions demands,"...

Can you inform us of one Union demand?


 +   Like this comment
Posted by demand
a resident of College Terrace
on Oct 22, 2009 at 1:14 pm

Pension: 2.7% at 60.


 +   Like this comment
Posted by cc
a resident of Southgate
on Oct 22, 2009 at 1:23 pm

Resident:
Get your facts straight. The Police Union agreed to "defer" their raises(that were built into a contract.) This in no way means it is a done deal. Also, 'deferred" means that they WILL get it, just not this year. It is really an empty gesture.
The Fire Dept. offered to 'defer' their raises as well. The City did not act on this and now the Fire department is getting their raises.
SEIU has NOTHING to defer, or you can bet they would.
You see now how the shell game is played? Nobody is helping anything, while the SEIU gets screwed. AND SEIU is made out to be the 'bad guys' in all of this.


 +   Like this comment
Posted by Darwin
a resident of Another Palo Alto neighborhood
on Oct 22, 2009 at 1:29 pm

Resident-

You wrote "A big "thank you" to our Police Department for agreeing to give up their raises this year. The City asked for their cooperation in reducing salary and benefit costs to the City this year, and the Police Union came through for them. City Council, Management staff and residents of Palo Alto should appreciate their willingness to cooperate."

You couldn't be more wrong. SEIU has offered more than the PAPD. If all that was asked of SEIU was to forgo raises, this deal would have been done months ago.


 +   Like this comment
Posted by PA worker
a resident of another community
on Oct 22, 2009 at 1:31 pm

We REALLY don't want to strike. The mood is pretty gloomy. For many of us it's about paying the bills, the mortgage, the property tax, the day care, the clothes the gas (to commute to Palo Alto) etc, etc. I love Palo Alto and I'm proud to work for the citizens here, but money is pretty tight for many of us.


 +   Like this comment
Posted by Sam
a resident of Midtown
on Oct 22, 2009 at 1:35 pm

"Can you inform us of one Union demand?"

Sure: "Don't touch our benefits!"

PA council will not agree to cut sacred cow services, like PACT, period. That only leaves one thing: Increase the utility tax, which is the easiest tax to increase, because it is disguised among the various utility service charges.




 +   Like this comment
Posted by R
a resident of Old Palo Alto
on Oct 22, 2009 at 2:00 pm

It is hard to change contracts. The time to re-adjust the compensation packages back to the new reality is when the new contracts are written. SEIU's is up first. Fireman's contract is later -- see Web Link to see that the ground is being set to fix the problems there. Police contract will be later still. You deal with them in the order that they expire.


 +   Like this comment
Posted by demand
a resident of College Terrace
on Oct 22, 2009 at 2:03 pm

PA worker, "but money is pretty tight for many of us. "

As it is for the city. They're not doing this for fun.


 +   Like this comment
Posted by R
a resident of Old Palo Alto
on Oct 22, 2009 at 2:34 pm

fedup,

Does the 65th page of this PDF ("Page 39" of the document) answer your question?

Web Link


 +   Like this comment
Posted by Sam
a resident of Midtown
on Oct 22, 2009 at 2:44 pm

There will be a bunch of angst, but the PA council will give in to SEIU demands. I have lived in Palo Alto for over 40 years, and it is clear to me that Palo Alto would rather pay than fight. No way that PA will give up its services. SEIU knows this. So what are we pretending to fight about?

The ultility tax will be raised. Then we will go on with our lives.

I think the reason that the utility department will never be sold to PG&E is that it is a cash cow. So be it.


 +   Like this comment
Posted by Watch Dog
a resident of Another Palo Alto neighborhood
on Oct 22, 2009 at 4:19 pm

Someone should check on this. I heard from a reliable source that the Police ended up taking there raise after all. Can someone please verify this.


 +   Like this comment
Posted by unionless
a resident of Charleston Meadows
on Oct 22, 2009 at 4:33 pm

Please don't confuse the pay or pay cut of the city managers with the union negotiation.

As much as I don't want to over pay the city managers, they are individual employees signing individual contracts. So if things are bad enough one way or another, they could be let go. While here union is acting like a gang, providing sub-standard service in some cases, but receiving over market payment, and seems nothing you can do with them. It's simply unfair.

Now if one's skill set of operating the waster water processing plant is so unique that the city has to pay extra bucks to get the service, as long as it's not part of union, I consider it's fair. That's the rule of the game in private sectors.

As a tax payer, we only demand a fair market, not a gang holding Palo Altan as hostage.

Am I asking too much?


 +   Like this comment
Posted by Kate
a resident of Duveneck/St. Francis
on Oct 22, 2009 at 4:34 pm

To: "R"

Thanks for posting that reference page to the budget Page 38 and also beyond.
So someone clue me in:
What are we "renting and leasing" last year for $11,563,150?

And I also noted the 'revenue' from the utility tax last year. $10,285,000.!!!! As the utility rates go up, this 'cash cow' moos happily.

Seniors on fixed income are hurting. Many residents are without jobs. Cold weather is
coming - either turn on the heat or be cold or go to a library and stay warm. It happens every year. It will be crowded this year.


 +   Like this comment
Posted by Sam
a resident of Midtown
on Oct 22, 2009 at 4:49 pm

The cash cow may be mooing more than usual, but she is about to give more milk. She is a happy cow.


 +   Like this comment
Posted by A Noun Ea Mus
a resident of Professorville
on Oct 22, 2009 at 4:54 pm

"The city rejected an offer from the union to seek mediation. Rob de Geus, a member of the city's negotiating team, said the city felt that after close to six months of talks with the union, mediation wouldn't be helpful."

Indeed.

Mediation would probably not be helpful...especially since it would probably expose that a cost saving alternative could be found. But not the "in your face" type the city management has been touting all along.

One question I have to ask myself is whether or not Measure A was ever something they actually wanted to see passed...or was it a flawed Measure by design.


 +   Like this comment
Posted by city worker
a resident of another community
on Oct 22, 2009 at 4:57 pm

"Posted by Watch Dog, a resident of Another Palo Alto neighborhood, 34 minutes ago

Someone should check on this. I heard from a reliable source that the Police ended up taking there raise after all. Can someone please verify this."

I have heard this too from some police officers I work with. Since Fire is taking their raises, Police will take them too now. SEIU will get the bulk of the cuts.


 +   Like this comment
Posted by q
a resident of Adobe-Meadows
on Oct 22, 2009 at 5:43 pm

What's the deal if no contract is agreed? Is the status quo maintained?


 +   Like this comment
Posted by q
a resident of Adobe-Meadows
on Oct 22, 2009 at 6:01 pm

ok, forget it, the article's been updated with the details.


 +   Like this comment
Posted by Mookie
a resident of Old Palo Alto
on Oct 22, 2009 at 8:46 pm

[Post removed by Palo Alto Online staff.]


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Posted by know
a resident of Barron Park
on Oct 23, 2009 at 8:12 am

The police delayed their 6 percent raise until next year at their negotions time.


 +   Like this comment
Posted by know it all
a resident of Duveneck/St. Francis
on Oct 23, 2009 at 8:26 am

I am getting sick of hearing everything about how the SEIU members have it good. Come on wake up and smell the coffee people...this morning news states that the city wants to save but can't back it up the numbers..the city list uncertain about the amount they will save. What does that tell you. The city keeps changing the amount on how much their budget deficit is..come on now didn't your parents teach you that when someone is not telling the truth they can't remember there story....oh yeah those few palo alto residents that keep saying we have it made and their tax dollars pay are salaries..my answer is here is your 5 cents back(your part of your taxes)towards my salary.


 +   Like this comment
Posted by peninsula commuter
a resident of another community
on Oct 23, 2009 at 8:42 am

True that private sector wages are often lower than Palo Alto. But has anyone checked salaries on other Bay Area cities' websites? Most surrounding cities with significant infrastructure pay higher wages than Palo Alto.


 +   Like this comment
Posted by market forces
a resident of Community Center
on Oct 23, 2009 at 8:49 am

peninsula commuter, you're looking at it all wrong as well as being ill-informed. Santa Clara County unemployment is running at 11.8%. That says all you need to know.


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Posted by peninsula commuter
a resident of another community
on Oct 23, 2009 at 8:58 am

Market,

Market forces apply to job markets also! While the overall Bay Area unemployment rate may be 11.8%, it is much lower for jobs that require specialized technical skills - including construction, project management and engineering support. This is also a fact one needs to know.

If Palo Alto wages are lower than surrounding cities (some of which are still filling jobs), the job market will respond accordingly i.e. skilled labor will leave Palo Alto for other employment.


 +   Like this comment
Posted by market forces
a resident of Community Center
on Oct 23, 2009 at 9:10 am

Yes, some jobs will be difficult to fill and will require higher salaries. There are over 600 SEIU positions, most of which fall into the lower skill categories as reflected by the average salaries.
That's the problem with union negotiations. You're dealing with them as a block and they need to be treated as a block.
However, you are trying to pull out a low salaried person and say they need more money and can't afford to give up benefits. When challenged pull out a high salaried person and say they are hard to replace. Very disingenuous.


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Posted by peninsula commuter
a resident of another community
on Oct 23, 2009 at 9:19 am

Market,

It appears that SEIU and the Palo Alto city manager are about to conduct a "real world" experiment to see if your opinion is correct. We will probably find out the results in a few months. But I suspect your screen name "market forces" gives us a clue to the final answer.


 +   Like this comment
Posted by A Noun Ea Mus
a resident of Professorville
on Oct 23, 2009 at 9:28 am

"That's the problem with union negotiations. You're dealing with them as a block and they need to be treated as a block."

Need to be treated as a block? Did you mean broken up into separate blocks? Or something like "if you more skilled people throw in your lot with less skilled we should treat you all as lowest common denomiantor"?

Either way...the point of a union is that their is strength ni numbers. For some that is obviously a "problem" then with negotiations.

Both the low and high salaried people need their money and benefits. No one is saying they need MORE at this time, just tryin to limit the take backs, curtailing of healthcare benefits.

Meanwhile the main focus or problem for PA negotiations really seems to be skyrocketing health care costs. Not just in PA, but CHW Nurses at ALL the hospitals are scheduled to strike and later this month. Mostly it seems over healthcare benefits (other issues in the mix, but that seems to be main one). Also recently the PA Teachers had issues with healthcare reimbursement.

That is the sick elephant in the room.

If this divide goes to a strike it will be because PA Management planned all along to not negotiate in good faith and push it to this level, with obscufation worthy of the most trained Nixon era dirty tricks political operatives oozing out of Stanford/Hoover Center.

If a national healthcare plan passes with a good public option, hopefully then health insurance costs can start to come down. SEIU is a prime player in getting this passed. The very same people who bemoan this are the very same people who are the most vitriolic about SEIU, want a strike to remove SEIU representation, oppose President Obama on everything, etc. People with 180 degree different perspective should not be so unaware of how this will come down in the objective big picture. Your tax dollars used to foster an agenda like this!

I believe a reasonable settlement could have been reached, perhaps still possible.


 +   Like this comment
Posted by market forces
a resident of Community Center
on Oct 23, 2009 at 9:52 am

We all seem to be in agreement and will sit back and pontificate whilst the scenario plays out. Should be an interesting couple of months.


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Posted by Sam
a resident of Midtown
on Oct 23, 2009 at 9:55 am

"If a national healthcare plan passes with a good public option, hopefully then health insurance costs can start to come down. "

That is another urban myth. Medicare does not carry its own weight (it is subsidized through private insurance overpays), and it is also going broke. The cost curve with not be bent downwards, because citizens want cadillac medicine, and will not accept rationing.


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Posted by fedup
a resident of Meadow Park
on Oct 23, 2009 at 10:25 am

Pensions and health care for life is unsustainable. The entitlements that our public employees have come to believe is their right, has created a warped sense of reality.

Those of us in the private sector have no job security, no pensions, and no health care benefits when we leave our job or retire. The City's "last, best offer" seems overly generous. I hope the City Council stands firm and does not give into SEIU demands. As mentioned above the tax payer is tapped out. Those of us on fixed incomes (which we saved for, instead of being given) cannot afford additional utility fees.

Is there anyway retired City employees can be required to pay for their own health care instead of saddling tax payers with this burden? Why can't public service retirees go with Medicare like the rest of us when they retire? Can pensions benefits for employees who have retired with over $100,000/yr for life be renegotiated?

Maybe the solution to some of the budget shortfalls municipalities are facing with the public employee entitlements would be strongly advocating for universal single-payer health care. Then all of us would get coverage, not just the select public service sector.

Have 401K's for public employees instead of pensions. They can pay into their own retirement, just like the rest of us.

No sympathy for all the special benefits public employees enjoy at our expense.


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Posted by A Noun Ea Mus
a resident of Professorville
on Oct 23, 2009 at 11:22 am

Pasted in from SEIU Palo Alto website..from

Web Link

"Palo Alto Refuses Mediation with Workers

Thursday, October 22, 2009
Palo Alto, CA - In the latest turn in negotiations, the City of Palo Alto on Thursday, Oct. 22, rejected the workers' offer of using mediation to resolve an impasse.

Workers have offered the city $6 million in savings to help close budgetary problems, but the city refused the savings and instead declared an impasse on Oct. 20.

The city administration said it doesn't think mediation will help resolve the impasse and has decided to bypass the process. But the City of Palo Alto workers think we owe it to the community to do everything in our power to find a fair solution."

So $6 million in savings would constitute 2/3 of the stated budget gap of $10 million. Measure A could conceivably, if passed, kick in another $3 million (though later) and make up the rest. OR the previoulsy mentioned changes of streamlining and downsizing would.

But the city management wants more. They want long term "structural changes", to use the recession for effect. When/if the recession reverses things would then stay the same.

This isn't something Palo Alto HAS to do. It's something that some WANT to do.

Others on this forum are enthusiastic supporters of such, and other similar agendas.

We shouldn't be ignorant of where the divide truly lies.


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Posted by market forces
a resident of Community Center
on Oct 23, 2009 at 11:51 am

The track record for SEIU's numbers hasn't been good. I wouldn't rely on them to form your opinion.

Palo Alto workers have been paid last contract salary and benefits since the contract expired. The union wants to draw out the negotiations as long as possible to continue with those payments. Why has it taken so long to get to this point?
The union could have formally chosen mediation in the past and given up their right to strike. Now they want mediation and claim they "owe it to the community"? I used a word in a previous post to describe this behavior.


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Posted by Wayne Martin
a resident of Fairmeadow
on Oct 23, 2009 at 12:45 pm

> Pensions and health care for life is unsustainable

This is one of the key issues, but if we look at the compensation model that the City has been using, we see that: salaries are uncapped, doubling ever 10-15 years, with pensions linked to the high year's salaries.

So .. what does this mean? It means that the $114K/per year city employee will cost about $230K/per year in 10-15 years. And 10-15 years after that, these folks will be costing about$450K (cost-to-employ), with their salaries at/about 60% of these numbers.

Now .. pensions are really "deferred salary". So, what is the payout (over 30 years), for people making these sorts of salaries? The following answers that question:

Using a COLA of only 2%, public safety retirees receive the following payouts:

Total Pension Payouts
Pension
$100K--10-Years: $1.1M | 20-Years: $2.5M | 30-Years: $4.1M
$150K--10-Years: $1.7M | 20-Years: $3.4M | 30-Years: $6.2M
$200K--10-Years: $2.2M | 20-Years: $5.0M | 30-Years: $8.3M

(Government employees not classified as public safety will receive less.)

So .. the word "benefits" is code for anywhere from $1M-$8M dollars of salary deferred until after retirement (Healthcare is year to be added in).

CalPERS has been "on the hook" for much of these funds in the past. But in the future, as more and more people retire with $100K-$200K pensions, it is unlikely that CalPERS will be able to "play the market" as it has in the past—so the government agencies that awarded these pensions will have to make up the yearly shortfalls.

In Palo Alto, about 15% of our General Fund is being spent on pension contributions yearly. In dollar terms, that's about $100M every four years that is spent on "deferred salaries" which no one seems to be talking about when the employees claim that they are "under paid" and deserve big raises!

The taxpayers deserve transparency in this matter. Unfortunately, we have elected City Councils that either can not, or will not, engage this matter as adults. So, the only meaningful answer is to "starve the beast"!

Vote NO on Measure A!


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Posted by Lead by Example
a resident of Midtown
on Oct 23, 2009 at 12:57 pm

Although you are a staunch conservative Republican, Mr. Martin, Palo Alto health care for life demands your support for the public option in the health care debate.


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Posted by Wayne Martin
a resident of Fairmeadow
on Oct 23, 2009 at 1:28 pm

> Although you are a staunch conservative Republican

Actually, I am a registered "Independent".


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Posted by Oldtimer
a resident of another community
on Oct 23, 2009 at 1:36 pm

Can someone tell me why the last Finance Committee meeting was not televised? What happened to transparency?


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Posted by StraightTalk
a resident of Charleston Meadows
on Oct 23, 2009 at 2:33 pm

DUMP THEM ALL. Fire them, we'll have crappy service for 6 months sorting out the new non-union people, but there are tons of people looking for work. If this job isn't worth their while, let em walk. Then they can consider if they need that extra 10% while the economy is cratering around them, while they look for a new job. Get real people.


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Posted by Arthur
a resident of Crescent Park
on Oct 23, 2009 at 2:34 pm

Wayne: Actually being an independent in Palo Alto qualifies as a "Staunch Conservative Republican." The loonies here are "open-minded" as long as you agree with them.


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Posted by Toni
a resident of Old Palo Alto
on Oct 23, 2009 at 3:54 pm

The City's last, best offer includes a guarantee that an employee healthcare contribution would not be more than 10% of cost, the City picking up the other 90%.

Who in the real world gets a benefit that generous? No one.

Healthcare benefit costs should work their way toward 50:50 participation, not 90:10.

The City is being overly generous in a fast rising healthcare cost environment. This stinks.


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Posted by Lead by Example
a resident of Midtown
on Oct 23, 2009 at 4:31 pm

Wayne, I urge everyone to write in your name for City Council next election. We need you on the City Council!


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Posted by stretch
a resident of another community
on Oct 23, 2009 at 5:12 pm

Fed up:

Get with the program - the City would like retirees and new employees to pay for part of the medical. That's been the sticking point. People already retired went out with a contract, and - listen - they DO go on Medicare at 65. Whatever made you think otherwise? No one gets it until they turn 65, not "at retirement". How many employees do you think go out with $100,000 a year? The CalPERS site says that the vast majority are receiving under $36,000 a year. I wake up every day with back pain, have nerve damage in my arms and hands from using a jackhammer, scars all over my body from burns, cuts and flying pieces of metal, and YOU want to whine about what somebody else has that you don't! waaaaahhhhhhhhhhh


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Posted by pat
a resident of Midtown
on Oct 23, 2009 at 5:37 pm

Sam has mentioned the possibility that the city will raise the utility tax. Maybe they'll also raise the utility rates (again!) so they can transfer even more money from the utility enterprise funds into the general fund.

This perspective – that the profits belong to the city and not to the rate payers – has serious consequences:
1. The city can -- and does -- raise utility rates at will. There is no PUC, no oversight
2. The city can take our utilities payments and transfer as much as they want into the city's general fund, to be used for any purpose determined by the city government.
3. The city admits that it is using our utility payments to plug holes in the city budget.

Since 1910, total transfers from Utilities to the City amount to $351 million. (See pdf page 18 at Web Link )

There is some question as to whether the transfer of water funds is legal since Prop 218 the RIGHT TO VOTE ON TAXES ACT, passed in 1996. Web Link

This measure restricts local governments' ability to charge "property-related" fees. (Fees for WATER, sewer, and refuse collection service probably meet the measure's definition of a property-related fee. ...)

IN 2006 LOS ANGELES posted an announcement in the Metropolitan News-Enterprise, asking if anyone wanted to fight the transfer of $30 million from the Department of Water and Power to the general fund. A California Supreme Court decision said the money collected for water and power services "must be used to run those services." Web Link

In an April article at Web Link, Diana Diamond said," the water division of our Utilities Department 'transfers' money to the general fund each year, and the fixed amount it transfers goes up by 3 percent each year, every year."

Since 1996, when Prop 218 was passed, close to $30M has been transferred from the water fund to the general fund.

Palo Alto will stop transferring money from the water fund in 2010. No reason has been given. Is it possible that someone finally determined the transfer is illegal?


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Posted by Sam
a resident of Midtown
on Oct 23, 2009 at 5:55 pm

Pat,

Uh...if you think some mere law is going to prevent PA council from milking the happy cow, you are wrong. There are laws, and then there are other laws. And then there are interpretations of laws, and such things can take many years. In the meantime, the cow gives milk.

We will get a pro forma strike from SEIU, and an pro forma 'fight' by council agisnt SEIU. In the end, SEIU will get what it wants, and give back some symbolic save-facers to council. The happy cow will make up the budget gap. It is carved in stone.


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Posted by Chris Gaither
a resident of Another Palo Alto neighborhood
on Oct 24, 2009 at 5:53 am

To Watchdog - it was actually PAFD (fire) who got their raises retroactive to July, not PAPD (police).

Cheers - Chris Gaither


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Posted by peninsula commuter
a resident of another community
on Oct 24, 2009 at 9:51 am

The "Dump the All' sentiment is unintentionally funny. Many of the "service - related" jobs involve working with high pressure gas lines, high voltage electric wires, repairing streets while redirecting commute traffic etc. If you fire them all, it will take A LOT MORE than 6 months to hire qualified workers and retrain them to work safely. There is federally-mandated and state-mandated training to accomplish, followed up by periodic testing and additional training. This is not a "bloated city government" thing, it is the same for Private Sector workers performing the same work.

More like 3 - 5 years without reliable city services if you "fire them all". Meanwhile businesses like Loral, HP, and Tesla Motors who depend on reliable city services will leave for places like Mountain View and Santa Clara.


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Posted by D.B. Cooper
a resident of Old Palo Alto
on Oct 24, 2009 at 10:37 am

Oy!


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Posted by think before you post
a resident of Barron Park
on Oct 24, 2009 at 12:01 pm

PC, You don't just replace the current system with the same system. You'd farm it out to PG&E if you didn't outright sell it.


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Posted by Lineman for the City
a resident of another community
on Oct 24, 2009 at 12:33 pm

"PC, You don't just replace the current system with the same system. You'd farm it out to PG&E if you didn't outright sell it."

Another incredibly uninformed opinion.
Read page 78,79 in the auditor's report:Web Link

You really want to pay more for worse service. Some residents don't know how good they have it.


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Posted by peninsula commuter
a resident of another community
on Oct 24, 2009 at 1:04 pm

Right On Target, Lineman.

Anyone who lives in a city served by PG&E knows you pay more for gas and electric service than in Palo Alto, with WORSE reliability. Why?
PG&E has to earn a profit for its shareholders (typically 10 - 12%). Also good luck visiting a local office for help with outages, paying bills etc. At best you will be driving to Cupertino, at worst you will be calling a "call center" in the Central Valley or out-of-state.

Farm it out to PG&E? Be careful what you ask for, you might just get it. Then no going back to a local utility, ever!


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Posted by Lineman for the City
a resident of another community
on Oct 24, 2009 at 9:25 pm

"Can someone tell me why the last Finance Committee meeting was not televised? What happened to transparency?"

Maybe they talked about the permit fees they'll be getting from the new Stanford hospital. The hospital will cost between 1 and 1.5 billion dollars. The typical building fees are 3.5%. They wouldn't want the word to get out that Palo Alto was about to make $35,000,000 in permit fees.

There's been a pattern with the last three SEIU negotiations with the City. The City cries some benefit cost too much. SEIU gives up said benefit or forgoes raises to cover the costs. Then, soon after a contract is signed the City makes an announcement that they have more money than they thought. Lalo Perez admitted in a negotiation session that the City hasn't always been upfront during negotiations about financial matters.

The decree of transparency is falling on deaf ear that have been burnt too many times.


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Posted by David Lieberman
a resident of Professorville
on Oct 25, 2009 at 9:27 am

"Anyone who lives in a city served by PG&E knows you pay more for gas and electric service than in Palo Alto"

Actually, Palo Alto residents pay significantly more for gas. Not surprising since Palo Alto Utilities buys its gas from PGE.

It is true that we pay less for electricity (we get hydro power from federally financed dams). Total bill for electricity and gas is about the same for most people.


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Posted by Lead by Example
a resident of Midtown
on Oct 25, 2009 at 10:26 am

Write in the Dream Team for City Council: Wayne, Pat, Marvin, David, and Lineman.


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Posted by Voltaire
a resident of Palo Alto Hills
on Oct 25, 2009 at 11:34 am

PAPD only deferred their raise. They did not give it up. They will get it at some point retroactively. Part of PAFD's agreement to defer their raise was only if the City left SEIU's benefits alone. The City didn't agree.


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Posted by think before you post
a resident of Community Center
on Oct 25, 2009 at 8:09 pm

And once again Lineman comes in with a link that is meaningless. Those paying PG&E rates aren't watching their cities go bankrupt through extortionate benefits. Or paying $20 million to get out of contracts. Or having essential services being used to hold the city to ransom. Yeah, we have it so good. What a moron.


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Posted by RT
a resident of Another Palo Alto neighborhood
on Oct 26, 2009 at 7:28 am

The reason the City is taking a hard line with the SEIU and firefighters is because they have a majority of the residents of PA behind them.

Vote "NO" on Measure A.


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Posted by Disappointed
a resident of Fairmeadow
on Oct 26, 2009 at 8:22 am

The Union has offered a very good cost saving measure and deductions and salary savings. The City has declined the offer. Newspapers are not publishing the Union's offer even though the members offered all the information several times. WHY? If you want to know, ask a City Union worker what the offer was and why the City does not want what the Union offered - 7.5 million dollars in savings.


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Posted by peninsula commuter
a resident of another community
on Oct 26, 2009 at 12:07 pm

Lineman is correct. You can find other cities (San Jose for one) that have budget problems equal to or worse than Palo Alto's. Ditto for Santa Clara county. Yet their residential customers pay about 40% more for electricity than Palo Alto. The gas and electric rates that customers pay, whether they are served by PG&E or a city-owned utility, have little to do with general fund budget deficits.

General fund deficits come from a shortfall in tax revenues (occupancy tax, building permit fees, business licenses etc. vs the expense of providing Libraries, Police, street maintenance etc).
If anything, lower electric rates help the situation by encouraging businesses to locate & develop where the low rates exist.


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Posted by Happy Times
a resident of Fairmeadow
on Oct 26, 2009 at 1:18 pm

ON OCTOBER 20, 2009 THE CITY HELD NEW EMPLOYEE ORIENTATION FOR 11 SEIU EMPLOYEES. THE CITY THEN HAS A 1.25 MILLION PER YEAR INCREASE IN EMPLOYEE COST.

THE CITY THREATENED LAYOFFS...? THE CITY IS BROKE?
...Maybe it's just mismanaged and mislead.


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Posted by Happy Times
a resident of Fairmeadow
on Oct 26, 2009 at 1:25 pm

Stanford HAS to build a new hospital. The cost of the hospital will be between $1 billion and $1.5 billion. Fees usually run at 3.5% of a project. Is it true that Palo Alto will be receiving $35,000,000 in permit fees in the next three years?

Could this be why the City didn't broadcast their last finance committee meeting? They didn't want the word to get out about the upcoming windfall.


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Posted by peninsula commuter
a resident of another community
on Oct 26, 2009 at 2:00 pm

Yes, Palo Alto has the existing and planned new Stanford Medical facilities. Also Stanford Shopping Center, Lockheed, Loral, Varian, Hewlett-Packard, Tesla Motors and many other hi-tech businesses. Also Stanford University nearby.

And yet, Palo Alto is going broke because its workers want to keep "excessive" medical and retirement benefits? Even though less "excessive" than Sunnyvale and Santa Clara? Oh, sure.

I would like a better explanation from the City Manager and City Council on how Palo Alto is running a structural budget deficit, even though it has a better commercial/industrial customer base than many surrounding cities, and its own gas, electric, fiber optic and water utilities which generate a positive cash flow.


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Posted by Anna
a resident of Downtown North
on Oct 26, 2009 at 3:59 pm

Palo Alto has twice the number of employees per resident than any other surrounding city. This accounts for the budget deficit. There are two ways to erase this deficit: reduce the number of employees or pay them all less (or some combination thereof).

We aren't facing a political problem or a labor problem. We're facing a basic arithmetical inequality: we have too many employees earning too much for the revenue coming in or that is available under any realistic tax increase plan.

Tough it up, Seiu. See below:

Web Link


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Posted by peninsula commuter
a resident of another community
on Oct 26, 2009 at 5:35 pm

Which surrounding cities are you comparing Palo Alto with? Palo Alto has gas, electric and fiber optic utilities (plus water and wastewater). It takes employees to provide these services. Please tell us which city in your employees per resident survey provides the same services.

This comparison is only meaningful if you are comparing cities that provide the same utility services. You may need to look in Southern California to find one.


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Posted by Lineman for the City
a resident of another community
on Oct 28, 2009 at 6:00 pm

David Lieberman,
"Actually, Palo Alto residents pay significantly more for gas. Not surprising since Palo Alto Utilities buys its gas from PGE."

David,

Please look at this document: Web Link
It doesn't list PG&E as a supplier.

Palo Alto did sign some very poorly timed purchase agreements. Those agreements have expired which is why gas rates were reduced 10% this year. I would recommend you talk to someone who moves out of Palo Alto. Most are shocked at their complete utility bill.


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Posted by Hydroponics
a resident of Midtown
on Nov 7, 2009 at 6:25 pm

I had a great time reading around your post as I read it extensively. Excellent writing! I am looking forward to hearing more from you.

Regards,
Web Link


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Posted by daniel
a resident of another community
on May 9, 2010 at 8:34 am

Well negogation with "last, best and final offer," aren't really negocation ;p

Web Link


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