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.