Palo Alto eyes changes to binding-arbitration law

Council committee weighs modifying 1978 provision versus scrapping it altogether

After balking last year, Palo Alto officials renewed their push Tuesday night to kill or modify a local law that empowers an arbitration panel to settle disputes between the city and its public-safety unions.

In their first discussion of binding arbitration since last August, members of a City Council committee said Tuesday they are interested in bringing the issue to the voters either this November or in 2012. The four-member committee didn't take a vote on the issue, but three members spoke out against the provision and argued that the rule keeps Palo Alto's elected officials from fulfilling their budget-balancing obligations.

The provision, which is encoded in Chapter V of the City Charter, brings labor disputes between city management and police and fire unions to a three-member panel, with one member chosen by each side and a third member chosen by the other two panelists.

The council considered putting the repeal of binding arbitration on the November 2010 ballot but ultimately voted 4-5 not to do so. At that meeting, several council members said they would support the repeal but argued that the process is rushed and merits more discussion. Council members were also dissuaded from pursuing the repeal last year by the Palo Alto Police Officer's Association, whose members had agreed to defer their salary increases for two years in a row to help the city balance its budget.

Most of the discussion around binding arbitration focuses on the city's firefighters, who have refused to accept the types of benefit concessions that other labor groups had adopted. The union's contract expired last year, and the negotiations between city and union officials have been at an impasse since February.

City management and the union, Palo Alto Professional Firefighters, Local 1319, are preparing to enter binding-arbitration proceedings in the fall to settle the dispute.

Councilman Larry Klein, who was one of the dissenters last year, said at the Tuesday meeting of the council's Policy and Services Committee that he opposes the binding-arbitration provision and would like to see it changed. He said he was among the Palo Alto voters who voted against the provision in 1978.

The voters adopted the charter provision to ensure police and firefighters would not strike, but state courts since then confirmed that strikes by public-safety workers are illegal.

Klein and council members Pat Burt and Karen Holman all said the provision hinders the council's ability to manage the city's budget by handing over some of the most critical budget decisions to an arbitrator.

"I thought it was bad policy, and I still think that's the case," Klein said. "It's not because of the financial situation this year or any particular year.

"We're responsible, and we need to have the authority to make the decisions," he said.

Holman, who pushed for the repeal last year, reiterated her opposition to the binding-arbitration provision Tuesday night. She emphasized that the proposed repeal has nothing to do with the ongoing negotiations with the firefighters' union and everything to do with the city's method for setting policy.

"The discussion is happening because of the obligation of the City Council to be fiscally responsible to the public," Holman said.

The binding-arbitration provision has only been used six times since its inception, with the arbitrators siding with the city on some issues and with the union on others in roughly equal measures. But when it comes to pension reform, the panel has sided with the unions every time -- a trend that Burt found significant. The panel rejected in 1980 the city's bid to institute a two-tiered pension for firefighters. Arbitrators also sided with the fire and police unions on the two occasions in the early 1980's when the city sought to base pensions on the three years with highest salaries, rather than a single year.

Burt hypothesized that the arbitrators' decisions in these cases have deterred the city from pursuing pension reform over the past three decades.

"Ever since those defeats by the city, the city never chose to or dared to go to arbitration on those sorts of reforms again," Burt said. "I think the city appears by history to have been defeated on that issue previously and didn't dare to challenge it again."

Committee Chair Gail Price was the only council member who spoke out against repealing binding arbitration, though she said she would be open to considering some changes in the charter provision. She stressed the need for more information and other examples of arbitration models and said putting the issue on the ballot at this time would create "another firestorm."

The council has to decided by Aug. 1 whether to put the issue on the November ballot. The council can also place the issue on the 2012 ballot, which will also include council elections.

"I don't believe we have the time to do the research necessary," Price said. "I think it's going to be extremely challenging to do it in a thoughtful way."

Klein also said he is "leaning" toward having the issue on the 2012 ballot, though he asked staff to come back with more information as soon as possible so that the council could have the option of putting it on this year's ballot. He also said he would be open to considering less drastic options than an outright repeal of the provision.

Staff presented the committee with a menu of options, including repealing the provision altogether; instituting a system in which each side presents two final offers and the arbitrator picks one of the four offers; requiring mediation before arbitration; and an "all or nothing" approach in which each side presents a package and the arbitrator picks one of these packages.

Staff from Human Resources wrote in a report that one of the primary criticisms of binding arbitration is that it "delegates decision-making authority on pay levels, benefits, and work rules to a third party, unelected person (the arbitrator) who has no accountability to the citizens."

"Elected council members are typically responsible for determining appropriate service levels for the entire range of services provided to the community, while an arbitrator is generally focused only on the service of the particular public-safety department at issue in arbitration," the report states. "This narrower scope for an arbitrator has the potential to create an imbalance in the Council's service level decisions for the City as a whole."

Palo Alto is one of three cities in Santa Clara County, along with San Jose and Gilroy, with a binding-arbitration provision.

The committee will continue its discussion on June 7.

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Like this comment
Posted by Where's the Substance to the Debate
a resident of Downtown North
on May 11, 2011 at 9:20 am

Regardless of what one thinks of this issue, the debate on this is a sham. The committee spent most of its time and all of the beginning of the discussion talking about what it would take to get it on the ballot and how fast they could do it. Many of them have already decided to put it up for repeal, they don't care what information might be out there. They weren't actually interested much in any of the substance. When they did get around to any substance, there just wasn't much to it.

If this is the more information they wanted, they wasted their time. They should have just voted on it last year.

Like this comment
Posted by Peter Carpenter
a resident of Atherton
on May 11, 2011 at 10:14 am

Just put it on the ballot - the voters will decide, that is what elections are for.

Like this comment
Posted by Bill
a resident of Barron Park
on May 11, 2011 at 3:39 pm

The elected City Council should be the one who makes pay and pension decisions, not a non-elected person who has no responsibility to the residents.

Like this comment
Posted by Marcy
a resident of Barron Park
on May 11, 2011 at 4:21 pm

It is about time they made the change. It should have been put on the ballot last year. The fire department union has always been very rigid and self-serving with their demands. Why do they keep their union president?

Like this comment
Posted by Marilyn Aden
a resident of South of Midtown
on May 11, 2011 at 5:11 pm

I am incensed that the Council is considering changing the arbitration provision. Without the right to strike, binding arbitration with a neutral arbitrator is the only fair way to adjudicate the bargaining dispute. In an arbitration, both sides have the opportunity to prepare and present the case. If an arbitrator finds for one of the parties, the other apparently didn't make their case. Working men and women (people who do the real work) should not have to wait around for the parent (the council) to tell the children (the workers) what is going to happen to them. "Being accountable to the voters" is a trite excuse for doing whatever the authoritarians want to do. I vote for people who I think will fairly consider the plight of working men and women.

Like this comment
Posted by Resident
a resident of Community Center
on May 11, 2011 at 6:41 pm

"I vote for people who I think will fairly consider the plight of working men and women".??????

We are talking about a group of union militants who make $150K a year and spend more time sleeping and shopping than doing any physical labor. Thanks to binding arbitration and union influence on politicians, pa union safety employees make three times the mational average. They are over staffed, underworked, and overpaid.

Ending binding arbitration is a step in the right direction. Outsourcing the entire operation is the optimal solution to the pa union issue.

I'm wondering why government unions are necessary. In the private sector the unions eventually destroy the company (look at the auto and airline industries). In the government area unions continue to drive up government employee compensation to absurd levels. Governments don't go out of business. Insteade the politicians pile up the debt for future generations.

Like this comment
Posted by PA Resident
a resident of Another Palo Alto neighborhood
on May 11, 2011 at 7:53 pm

Sadly, the pendulum has swung far to far in favor of our overpaid firefighters. The present arbitration system also favors the firefighters that's why Spitaleri would not come to terms with the City during open negotiations. I'll definitely vote to end arbitration.

Like this comment
Posted by John
a resident of Meadow Park
on May 12, 2011 at 8:22 pm

The whole pay/pension combination is way out of line.

Goes without saying. I have to save for my families pension and get taxed to pay for someone else's! And the people taking my money will get more for doing less!.
Instead of sacrificing and going to college I should of been a fireman.

Sweet if you can get it.

Like this comment
Posted by Tim
a resident of Downtown North
on May 13, 2011 at 2:01 am

If you ask me, it smacks of typical PA politics to want to pull the rug out from under police and fire employees.

These men and women chose to serve in their profession and in PA partly because of the pay and benefits. The city is lucky to enjoy truly world-class police and fire departments. These workers have homes, families, and bills like anyone else. They work long hours, at night, on weekends, Christmas, Thanksgiving, rain or shine...and when the time comes, they don't hesitate to put themselves in harm's way to protect a complete stranger.

Police and fire employees are not responsible for the current economic climate. They did not recklessly hand out sub-prime loans to under-qualified home buyers and did not export jobs abroad and build massive debt for our country. They are Americans, valuable members of this and other communities, they are neighbors and friends.

Police and fire employees also are not responsible for the "PA process," which keeps so many developers, businesses, and their money away from town. Look next door to Mountain View, their financial situation is healthy.

Instead of placing misguided blame and punishment on hard-working police and fire employees, the city should focus their energy on keeping businesses like FB and their $$$ in town. Stop debating issues like HSR, and figure out how to bring the next Google to town, how to boost the tax base, and how to keep out great employees.

Like this comment
Posted by Chris
a resident of Palo Verde
on May 13, 2011 at 6:26 am

Marilyn, you hit the nail on the head. Why would anyone want to work for an organization where they cannot strike and then they also lose their last recourse of having an mutually agreed upon third party make the final decision? Without binding arbitration the City would merely shove pay cuts and reduced benfits to those who protect and serve us every day. I don't think any of you would accept that if it was your situation. I think this would make this City a non-desirable place to work and eventually, all the good ones will leave. I know then money has to come from somewhere but does our City really need 6 small libraries and on-call arborists? I am tired of hearing over privelidged people whine about other peoples pensions. Go work and live in their shoes for a day or a month and then you make your judgements.

Like this comment
Posted by John
a resident of Meadow Park
on May 13, 2011 at 9:30 am

I whine when I'm paying their fat pensions. If they don't like the job quit!
Just like I do whrn I don't like the situation.

Their are plenty of people who will line up to take their place.

Face reality WE ARE TAPPED OUT!

Like this comment
Posted by danos
a resident of another community
on May 13, 2011 at 9:42 am

"Why would anyone want to work for an organization where they cannot strike "

That pretty much sums up the situation of 99% of the working population. Certainly in the high tech sector, we can't strike, we have no binding arbitration rules, we have no union looking out for our interests.

So I guess we should all just quit our jobs?

Like this comment
Posted by al norte sm
a resident of another community
on May 13, 2011 at 9:42 am


Take less qualified first responders on the cheap. How often does one of them actually help YOU, anyway? Rarely if ever. Probably never, so let's slash and burn here!

Save more by closing all those useless extra stations. Clearly, they just sit in them all day.

I nominate the staffing cuts and station closures to begin at the locations nearest to the homes of John, PA Resident, Resident and Marcy.

First responders never really help us personally, do they?

Or our kids. Or our parents. Or neighborhoods.

Like this comment
Posted by al nore sm
a resident of another community
on May 13, 2011 at 9:47 am

"Certainly in the high tech sector, we can't strike, we have no binding arbitration rules, we have no union looking out for our interests. "

And it shows. If you're with a large corporation like a Cisco or Intel, it shows. How many foreigners are brought in on HB1 visas?

How much coding goes overseas?

Costs lots of Americans their jobs.

Jobs = fed, state and city revenue. Goes back to the TAPPED out comment.

Like this comment
Posted by John
a resident of Meadow Park
on May 13, 2011 at 10:34 am

Close the stations, no problem. What was once a noble public service has become a bloated entitlement program. Privitize it or turn it over to the county.

Time to wake up. Your ballot effort to keep the bloated staffing levels got shot down.

Like this comment
Posted by Taxpayer
a resident of Downtown North
on May 13, 2011 at 1:01 pm

I agree with John. Close the stations, the sooner the better. The PA firesleepers have become an albatross on the necks of taxpayers. Let's outsource the function and pay them the market rate ($60K). Instead of a pension headache for taxpayers, the private company can make defined contributions for it's employees.

The unions and their political muscle have created an unsustainable situation that has to end.

I would love to have the option of choosing between the union firesleepers and a private operation. The market place option would eliminate the unions. The ironic aspect is that the politicians favoring the unions are funded by the union contributions. The unions get their $'s form the taxpayers via bloated wages. Taxpayers have to find a way to block the excessive union power.

Like this comment
Posted by al norte sm
a resident of another community
on May 13, 2011 at 1:26 pm

"Privitize it "

Absolutely. Again. Absolutely. What could possibly go wrong?

Always better to have the lower rate guy, making less money in a for-profit venture, be the one to run into a burning building to save your grandchild. I'm sure the lowest bidder will always have the right stuff (knowledge, heart, guts, commitment) to always do the job in the worst of circumstances, always willing to run into a building when others run out. Airliner crash? Gas line explosion?

Ahem. Yup. Always.

And a for-profit firm will always make the appropriate, logical, sensible investments in equipment, training, staffing, maintenance, etc.. to insure the #1 maxim of corporate law:

- to save your family?

Heck no, silly, to MAKE A PROFIT.

Fulfill a poorly written contract in the most profitable way possible. After all, who writes the contract? Your wise town council, of course! And they're really experienced with that, aren't they? You love all their decisions, thus far, don't you?

I'm waiting for the first poster to recommend wackinhut.

Just look around the country at places that tried privatization. Look at Scott Walker's last job as county clerk in Milwaukee. He privatized. And it cost the county a fortune.

He made every mistake he could make, from firing, hiring the wrong guys, not fulfilling contractual obligations, etc..

And he's the national golden boy of privatization/union busting. The PA council will do better?

Web Link

Like this comment
Posted by John
a resident of Meadow Park
on May 13, 2011 at 6:06 pm

Keep up the good work "al norte sm". You make the point, it's about accountability. Kick and scream and name call but there is none.

The air of entitlement these public service employees have is overwhelming!

Like this comment
Posted by Firefighter
a resident of another community
on May 13, 2011 at 8:19 pm

[Post removed by Palo Alto Online staff.]

Like this comment
Posted by John
a resident of Meadow Park
on May 14, 2011 at 9:25 am

Look in the mirror to see why taxpayer thinks the way he/she does.

Yes you live a good life paticipating in a out of hand entitlement program.

Anyone up for organizing a wage/pension reform movement?

Or continie to let unions run things?

How much greater a percentage of my families dwindling private sector wage do you need to hang out at the fire house and live your great live(sic)?

Ans: As much as you can get.

"To the polls ye sons of freedom"

Like this comment
Posted by Resident
a resident of Community Center
on May 14, 2011 at 11:13 am

[Post removed by Palo Alto Online staff.]

Like this comment
Posted by John
a resident of Meadow Park
on May 14, 2011 at 12:25 pm

Great link. Lrt's gey back to all volunteer fire departmentd! Of course I'm kidding but something has to be done. I pay over 50 per cent of my income in taxes. Property, fees parcel taxes service fees and rhey want more!

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