Palo Alto drops plan to repeal binding arbitration

Council opts not to place provision for public-safety negotiations on the November ballot, but maybe later …

Palo Alto's proposal to repeal the binding-arbitration provision in the City Charter died Monday night when the City Council voted 5-4 to scrap its plan to place the issue on the November ballot.

The provision, which city voters adopted in 1978, enables a three-member arbitration panel to settle labor disputes between the city and its police officers and firefighters. Council members have maintained over the past month that the provision handcuffs the city in its negotiations with the public-safety unions, with several members arguing that the measure should be dropped from the City Charter.

But on Monday night, a proposal to let the voters rule on binding arbitration in November died by one vote, with only Mayor Pat Burt and council members Karen Holman, Greg Scharff and Greg Schmid favoring it.

Though most council members agreed that the provision needs to be reexamined, a few felt they need to study the issue further before sending it to voters. Councilman Larry Klein said he opposed binding arbitration but the council shouldn't rush to place the item on the ballot.

Vice Mayor Sid Espinosa and Councilwoman Nancy Shepherd both said they shared Klein's sentiments and voted against sending the issue to the voters this year.

"The community is not fully informed on this issue," Klein said. "We have not heard from any of the community organizations we normally listen to."

"There have been no hearings, no considerations of alternatives," he added. "We ought to have opportunities to consider them."

Gail Price and Yiaway Yeh also voted against placing the repeal of binding arbitration on the ballot.

Proponents of the repeal argued that the provision is costly and anti-democratic. Scharff and Holman both urged their colleagues to place repeal on the ballot. saying the provision makes it impossible for the city to control the city's spiking pension costs or make structural changes to employee contracts.

Scharff called putting binding arbitration on the November ballot a "no-brainer" decision and said the time to repeal the provision is now.

"If you're really seeking structural change, and you really care about getting pensions under control, and you really care about fiscal sustainability, you need to get rid of binding arbitration."

Holman said the tough financial climate calls for political leadership and repealing binding arbitration is the boldest action the council could take at this time.

"Binding arbitration is one of the more significant aspects of how the city does or does not have control of its own destiny," she said.

Holman said the council's proposal to repeal arbitration is not an act of retaliation against the firefighter's union, which will have its own measure on the November ballot. The initiative, spearheaded by Palo Alto Firefighters, Local 1319, would require the city to hold an election any time it wants to close a fire station or change department staffing levels.

The union received more than 6,000 signatures for the ballot initiative, more than enough to qualify if for the ballot. The council on Monday officially placed the measure on the November ballot, with several members saying they fiercely oppose the proposal.

Scharff called the firefighters' initiative "amazingly selfish," while Burt called it a "misguided attempt at a power play by the Fire Department."

The council's proposal to repeal binding arbitration also drew vehement opposition from the city's police officers, whose recent negotiations with the city have been much more conciliatory than those of the firefighters' union.

Sgt. Wayne Benitez, president of Palo Alto Police Officers Association, told the council Monday night that the union has made a great effort in recent years to stay away from politics and to negotiate with the city in good faith.

He said the police union relied on binding arbitration in its negotiations with the city only three times since the voters adopted the provision.

Holman called the repeal proposal's potential effect on the police union an "unfortunate happenstance" in the binding-arbitration debate.

"I am saddened that this consideration of binding arbitration does include and will include the police union," Holman said.

Though the council ultimately rejected Scharff's and Holman's proposal to place the matter on the November ballot, members agreed the issue deserves further discussion and possible inclusion on a future ballot.

Staff is scheduled to bring back a timeline for these discussions in the fall.

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Like this comment
Posted by common sense
a resident of Midtown
on Aug 3, 2010 at 6:44 am

Once again the 4 union stooges (Price, Espinosa, Yeh & Shepard) follow the direction of the union against the best interestes of the residents of Palo Alto.

All received support from the unions to get elected. With a $500 million dollar backlog of infrastructure needs, and increasing pension costs, these council members who are beholden to the unions will vote to raise taxes and fees.

The city managmement is bloated, and they aren't that interested in pushing on the pension issues, because as management, they get the same pension benefits. Here they are paid, better than similar jobs in private industry, better job security, and they get 4 to 5 times what a person would get from social security.

Like this comment
Posted by North Bay Voter
a resident of another community
on Aug 3, 2010 at 8:21 am

Will Palo Alto follow Vallejo into bankruptcy? Binding arbitration coupled with minimum staffing requirements for fire department will gobble up your budget in short order. That's what gave Vallejo a big shove toward insolvency, following deep cuts to other basic city services. If the city is not allowed to control costs by making staffing cuts, it may run out of options. Bankruptcy would likely mean closing fire stations and inability to replace police and fire employees who retire or go elsewhere.

Like this comment
Posted by Gregory A
a resident of Barron Park
on Aug 3, 2010 at 9:20 am

The city has 32+ million in the general fund and has balanced its' budget this year without touching this surplus. The city is not going broke anytime soon.

With that in mind, I am glad to see the city is looking into changing the way it reviews construction projects and the permitting process. We will be much better off as a city to push some of these permits through including the Motel 6/Bowling Alley, Edgewood, Alma Plaza, JJ&F, and Stanford Shopping Center/Stanford Hospital. These combined projects could potentially bring millions into the coffers as well as reviving the economy in our city.

Like this comment
Posted by Moe-Larry-Curly-Shemp
a resident of Duveneck/St. Francis
on Aug 3, 2010 at 10:45 am

> The city has 32+ million in the general fund and has balanced
> its' budget this year without touching this surplus

Keeping in mind that there is a $500M-$600M capital project backlog, and possibly a share of the $100M-$200M Creek Rehab project.

Being myopic does do anyone any real good.

The question is: "how to get rid of the Union Stooges?"

Like this comment
Posted by zebra
a resident of Greendell/Walnut Grove
on Aug 3, 2010 at 10:56 am

The reason that arbitration has only been used 3 times, is the fear of arbitration. Salaries go way up, just to avoid arbitration. I know .. most of my career has been in negotiation field.

Arbitration MUST go or else after I die there may be civil war in Palo Alto between tax payers and tax takers.

Like this comment
Posted by Demo
a resident of South of Midtown
on Aug 3, 2010 at 11:27 am

Buying votes! Ain't democracy grand?

Like this comment
Posted by Jim
a resident of Community Center
on Aug 3, 2010 at 12:41 pm

Council members pointed out that repealing the binding arbitration clause in the City Charter may confuse residents, who are being asked to vote on the Firefighters amendment to the City Charter.

Unfortunately, I think they have a point. Since almost 6,000 signed the firefighter's petition, there are obviously many residents who can be easily led. Delaying a election on the arbitration clause to sometime in the future was probably a good call. I just hope it doesn't fall through the cracks and get forgotten.

Like this comment
Posted by carlito ways
a resident of Old Palo Alto
on Aug 3, 2010 at 1:12 pm

Thanks to all those who voted for those Union stooges to sit in the Palo Alto City council. Everybody knew that once they got the city council "job" where their allegiances were going to be. Of course not with the Palo Alto citizens.

Like this comment
Posted by Bob
a resident of Barron Park
on Aug 3, 2010 at 2:28 pm

The citizens of Palo Alto need to take their local government back. This is unacceptable pandering to the unions, bloated salaries, benefits, and a defined pension plan. While the rest of us in the private sector are enrolled in 401(k) programs contributing to our retirement funds.

What would it entail for us to get the initiative on the November ballot? If the Supreme Court of Palo Alto(i.e. City Council with its nine members) wants to continue to bow to the unions, lets send a message this will no longer be tolerated. Let do something about this and take action!

Like this comment
Posted by Peter Carpenter
a resident of Atherton
on Aug 3, 2010 at 2:36 pm

Binding arbitration is like giving responsibility for your personal budget to a stranger. Elected officials need to do their job and negotiate mutually acceptable labor agreements, not give the keys to the city's treasury to some stranger.

Like this comment
Posted by Support Our Local Police
a resident of Midtown
on Aug 3, 2010 at 3:09 pm

A victory for common sense. A decision for fairness. Support our local police.

Like this comment
Posted by Brian
a resident of Barron Park
on Aug 3, 2010 at 6:20 pm

Way to go to the majority of the City Council who were fair and reasonable. They were not caught up in the knee jerk reaction to the unreasonable fire fighter ballot measure.

Like this comment
Posted by North Bay Voter
a resident of another community
on Aug 3, 2010 at 6:28 pm

I suspect the police and fire unions have done very well in Palo Alto, thanks to binding arbitration. The unions probably have the same lawyer Vallejo unions have. Alan Davis. But Vallejo citizens and taxpayers voted to remove binding arbitration from the city charter in June. Forty years of taxation without representation (that's what happens when an unaccountable outside arbitrator makes the contract decisions that should be made by your elected officials). Vallejo has been bankrupt for two years now, and it's not going to end any time soon. The city council majority wears the union label, and even while bankrupt, they approved a police contract that includes raises and 100% medical coverage.

Vallejo has the advantage of a "free press" web site, where city employee wages have been posted. You can see that police are doing very well, as are firefighters and most city employees. There's probably a similar situation in Palo Alto and other California cities. Voters should know what's happening and city employee pay is a matter of public record. Freedom of information.

Web Link

Has anyone posted Palo Alto wages? Can voters see what's happening? And don't forget the overly generous benefit packages, in addition to the wages.

Like this comment
Posted by Rogue Trader
a resident of Green Acres
on Aug 3, 2010 at 8:20 pm

The Palo Alto Daily News had some more details about this recently. You have to navigate to the story on the 7/31/10 edition, page A2. Here are some pertinent excerpts.

It is amazing that for as little as $1000, the unions can (allegedly) obtain influence of council members. What a fabulous Return on Investment for the unions.

From the PA Daily News:

Unions prefer the so-called “binding arbitration” process because rulings traditionally favor them.

Spurring the debate was a Santa Clara County civil grand jury report that advised local cities to do a better job of controlling public employees’ salaries and benefits. According to the report, the median compensation for Palo Alto police and firefighters, including benefits, jumped from $89,059 in 2000-01 to $146,061 in 2009-10

Four union-backed council members — Gail Price, Yiaway Yeh, Sid Espinosa, and Nancy Shepherd — said they are leaning against asking voters to repeal the binding arbitration clause from the city charter

Price, who received more than $1,000 from several unions in her 2009 run for council, called the measure “ill-conceived.” She said binding arbitration is a reasonable way to resolve differences and a ballot measure to repeal it could hamper communication between the city and unions.

The recipient of more than $1,000 from unions when he ran in 2007, Yeh also said he isn’t ready to add the measure to the ballot.

Espinosa, who received at least $2,500 from unions in his 2007 bid for council, and Shepherd, who had union assistance in phone banking during her 2009 run, both have said they would like to see more discussion and further exploration before a measure to repeal binding arbitration is put on a ballot.

Web Link

Like this comment
Posted by Palo Alto Voter
a resident of South of Midtown
on Aug 4, 2010 at 1:21 am

Ever since two of the union-backed candidates (Price and Shepherd) were chosen by the voters in the last City Council election, I've been expecting something like this to happen sooner or later. Palo Alto voters (at least the plurality of them) got the City Council they selected, and now they have to live with the results.

The time to pay attention is not after the barn door has been opened, but before Election Day. If everyone would throw out all the slate mailers, and instead find out about the candidates via the local papers, online, candidate forums, and such before voting, I expect we'd all be happier with the government we ended up with. (Of course, there is probably a not insubstantial number of Palo Altans who truly believe that The Unions Are Always Right.)

Like this comment
Posted by common sense
a resident of Midtown
on Aug 4, 2010 at 7:27 am

While certain Council members say they want to "study" the issue further, the City of San Jose is going to put the issue to a vote of the citizens: Web Link

Why are the council members who are union stooges (Gail Price, Nancy Shepard, Sid Espinosa & Yia Way Yeh) so afraid of the people of Palo Alto having a say in this matter? Don't they believe in democracy?

Often times the council members justify their decisions by wanting to "set an example" or be a "leader" for other cities. Where's that spirit among the union supported council members?

Like this comment
Posted by Deep Throat
a resident of another community
on Aug 4, 2010 at 2:03 pm

Peter Carpenter, a resident of Atherton, says, "Elected officials need to do their job and negotiate mutually acceptable labor agreements."

But Palo Alto's elected officials who want to eliminate binding arbitration have already (last year) imposed lower wages and benefits for SEIU-represented employee, and the Council Members who were in favor of placing the binding arbitration repeal on the ballot voted for a resolution that said the measure was, "in order to have more flexibility to craft solutions for managing employee costs."

That so-called "flexibility" is an imposed settlement, which is just the opposite of "mutually acceptable labor agreements".

Like this comment
Posted by carlito ways
a resident of Old Palo Alto
on Aug 4, 2010 at 2:25 pm

Here fellows, if you are really interested how much are we paying to "our public employees". Look up for the city of Palo Alto.

Web Link

Like this comment
Posted by who cares
a resident of St. Claire Gardens
on Aug 4, 2010 at 10:26 pm

I guess we forgot to mention the "union stooge" Larry Klein who was the deciding vote to not place the binding arbitration measure on the ballot. Larry says he was against binding arbitration in 1978 but now has changed his mind again. But hold on, he didn't receive union money, how can this be? It's sad that the anti-labor posters always seem to leave out important facts. Last time I checked there were nine council members and four votes out of nine isn't a majority. Regarding comments about imminent bankruptcy, kinda hard to convince the courts you don't have any money when you have over $300,000,000 in various reserve funds. Can't figure out if people are angry because they can't get a simple public servant job or if their just living their five seconds of fame by posting negative comments.

Like this comment
Posted by North Bay Voter
a resident of another community
on Aug 5, 2010 at 4:03 am

Amazing that for a city of over 60,000, a couple of hundred city employees control 4 out of 9 council members. As for over $300,000,000 in various reserve funds, how much of that is tied up in enterprise and special district funds? Aren't those protected by law and unavailable for General Fund expenses? Don't city employee salaries and benefits come from the General Fund supported by taxes?

Like this comment
Posted by Listen to What Sharf said
a resident of Midtown
on Aug 5, 2010 at 9:53 am

Apparently all of you who think the City is in financial trouble really weren't at the meeting or aren't paying attention.

Sharff said himself to everyone who was listening that the reason to support taking arbitration away is because the City has the ability to pay it's salary and benefits which is always a big factor in arbitration awards. One of the things Arbitrators look at is can the City afford "this", whatever "this" is. And the answer according to Sharff himself is "YES". Thats why he wants to take it away. It's not a question of can they afford it, it's do we want to spend it on public safety employees or other things like Lytton Plaza, the fountain on California Avenue, the Children's Theatre subsidy, etc.

The fact is public safety spending in Palo Alto is just under 40% (combined police and fire)of the General Fund Budget. This is one of the lowest percentages of any City in the County.

So spending on public safety is not the problem, it's all the other things the City provides it's citizens. Palo Alto provides alot and so far the citizens want that level of service to continue and will have to pay for it.

Public Safety is just the whipping boy here, when in fact compared to other cities our percentage of the budget is really low. Some Cities pay 50, 60, 70, 80% of the general fund towards police and fire.

Look for the real causes and educate yourselves.

Like this comment
Posted by common sense
a resident of Midtown
on Aug 5, 2010 at 11:59 am

who cares - Larry Klein is not a union stooge, but has been his judgements and votes have been bad for Palo Alto because he's influenced by other special interests: Klein brought before the council and voted to endorse the High Speed Rail, Klein keeps adding to the city budget for things like "Assistant to the City Manager for Sustainability", lead and voted for putting the "Business License Tax" ballot measure (at a cost of hundreds of thousands of dollars) - which was defeated decisively.

North Bay Voter - there are these various reserve funds, which the city council & city management say are dedicated for specific purposes, especially when they talk to th unions; but then they hijack the funds when they need them; two recent examples - when the city finance team made a $5 million mistake in their budget forecast last year and the found out in the middle of the year of the mistake, city management raided the "Technology fund" to cover the additional deficit; another example more recently is that the city council voted to allocate money from the "Budget stabilization fund" to do improvements to the City Manager's house.

Like this comment
Posted by pat
a resident of Midtown
on Aug 5, 2010 at 5:59 pm

“Councilman Larry Klein said he opposed binding arbitration but the council shouldn't rush to place the item on the ballot.”

"The community is not fully informed on this issue," Klein said. "We have not heard from any of the community organizations we normally listen to."

Maybe it’s time Council stopped paying attention to “the community organizations we normally listen to” and do what they were elected to do: make wise decisions and ensure our tax dollars are well-spent.

Klein will probably recommend a consultant and a [Insert Color] Ribbon Commission to “study” the matter. It’s the Palo Alto way.

Like this comment
Posted by who cares
a resident of St. Claire Gardens
on Aug 5, 2010 at 10:19 pm

Stating that the city made a $5 million mistake and covered it with reserve funds almost made me laugh/gag. Unfortunately, the $4.7 million wasn't a simple accounting mistake and missing city funds still cannot be accounted for and had to be covered with a reserve fund boost approved by the city council in a last minute vote in December 2009. Reserve funds are taxpayer monies and can be redistributed at will by reallocating funds with minimum effort to comply with state and federal regulations as shown by our ever enterprising city council and city manager. Everybody worries that labor is bilking the city, maybe we should look closer to home at the people who have direct access to city funds.

Sorry, but further commenting on this topic has been closed.

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