Arbitration repeal heads to Palo Alto ballot

City Council votes 5-4 to give voters a chance to eliminate 1978 law

Palo Alto voters will have a chance in November to repeal a local law that empowers an arbitration panel to settle labor disputes between the city and its police and fire unions.

The City Council voted 5-4 on Monday night to place on the November ballot a measure that would repeal the city's binding-arbitration provision, a 1978 law that gives a three-member panel power to rule on contract disputes between city management and public-safety unions. The narrow vote came after a lengthy discussion over whether the provision should be repealed or modified.

Council members Greg Scharff and Karen Holman had suggested repealing binding arbitration last August but saw their proposal defeated by a 4-5 vote, with Mayor Sid Espinosa, Vice Mayor Yiaway Yeh, and council members Larry Klein, Gail Price and Nancy Shepherd dissenting.

Though four of the council members who opposed the repeal last year continued to do so Monday night, Yeh provided proponents of the repeal with the needed swing vote and joined Scharff, Holman, Pat Burt and Greg Schmid in placing the repeal on the ballot.

Yeh said that while he doesn't support the repeal, he believes an up and down vote on the provision would allow the community to send a clear message to the council.

"I think the voters do need to have an opportunity to actually weigh in on this issue," Yeh said.

The council declined to give voters the chance in November to weigh in on an alternate measure that would have reformed rather than repealed the provision. Under the modification proposal, the arbitrators' scope would have been limited to compensation, and the panel would have been required consider such factors as the city's financial projections and the costs of meeting the new contract.

The measure also would have set up new requirements for the panel's one neutral arbitrator (the other two panelists are chosen by the two sides). This arbitrator would have to be a California attorney who is a member of the National Academy of Arbitrators.

The firefighters union, which remains in a standoff with the city over a new contract, has consistently opposed the effort to repeal the measure. Tony Spitaleri, president of Palo Alto Professional Firefighters, Local 1319, equated the repeal effort Monday to stripping the union of its collective-bargaining rights.

Spitaleri also alleged Monday that the council, in placing the repeal on the ballot, is violating a California law that requires public agencies to bargain in "good faith" with labor groups.

Scharff and Holman argued Monday night, as they have in the past, that the binding-arbitration provision takes away the council's ability to manage the city's finances. Scharff said the law puts the city is an "untenable position" of not being able to balance its budget. He noted that the fiscal year 2012 budget the council passed last month includes a $4.3 million hole that city officials plan to fill with concessions from public-safety unions.

"It puts us in a position where the threat of binding arbitration makes it impossible to plan and move forward with our decision," Scharff said. "That's how we ended up with no budget.

"If we didn't have binding arbitration, decisions would've been made earlier, and we'd have a budget that works."

Holman agreed and said that while binding arbitration had only been used six times since the voters adopted it, its existence has significantly influenced the city's stances in its negotiations with police and firefighters.

"We really have been constrained by binding arbitration's presence because in order to avoid binding arbitration we have settled for something less than where we needed to be," Holman said.

The council coupled the repeal measure with a new ordinance requiring all disputes between the city and its labor unions (both public safety and non-public safety) to go to mandatory but non-binding mediation.

Some, including Councilman Larry Klein, argued against the repeal, noting that unlike other employees, police and firefighters don't have the right to strike. A modified binding-arbitration provision would have provided the public-safety unions with a negotiating tool.

"It strikes an appropriate balance," said Klein, a member of the council's Policy and Services Committee, which worked with the city's legal staff to craft the modified provision. "It restricts what the arbitrator can look at, but it still leaves the unions with an opportunity for having another vehicle for a decision if the city gets out of bounds on issues of compensation."

Binding arbitration will be one of two measures that Palo Alto voters will consider when they step into the voting booth Nov. 8. They will also vote on whether to make a 10-acre portion of Byxbee Park in the Palo Alto Baylands available for a waste-to-energy facility.

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Like this comment
Posted by Frank
a resident of Greater Miranda
on Jul 19, 2011 at 7:17 am

So another words, get rid of binding arbitration and force whatever pay, salary, and benefit concessions you want down the public safety employees' throats.

Lets get rid of a neutral party who has the authority to make a fair decision. Lets put this decision in the hands of the finance committee and with a city who does not even have a CPA on the books and is frequently off on their numbers. Sounds fair to me. Look forward to having less qualified public safety personnel as the current ones leave to other agencies who provide for their own.

Like this comment
Posted by George
a resident of Greenmeadow
on Jul 19, 2011 at 7:57 am

Dozens apply for every Palo Alto police and fire opening.

The marketplace is telling you Palo Alto compensation is more than enough to attract and retain high quality people.

Like this comment
Posted by Taxpayer
a resident of Downtown North
on Jul 19, 2011 at 8:01 am

Yes, eliminate binding arbitration so the elected officials can do their job of managing the city's finances and not have to worry about some unelected hired outsider make a decision that the taxpayers do not want or can not afford. Very few cities still have binding arbitration clauses and many of the few that do are putting it on the ballot for repeal.

Fire safety position openings attract dozens of applicants for every opening. I find it unlikely that any PA union fire safety employees will leave, but it would not be a problem to hire competent replacements. Most likely the dept will need to be downsized once we get rid of minimum staffing and no longer have 30+ union employees sleeping away every night.

I was very disappointed in Klein, Shepherd, and Espinosa for not stepping up and giving the voters the "opportunity" to vote on repeal of binding arbitration. As expected, Price used a full court press on the other council members to protect her campaign funding source (unions) and try to badger the other members in to supporting a measure that would have preserved binding arbitration. I will not vote for Price under any circumstances and will need to be convinced that there are not more qualified candidates who hold a higher allegiance to taxpayers than unions before I vote for the other three.

On the other hand, I was impressed with the logic and independence of the opinions of Scharff, Holman, Schmitt and Burt. They clearly were interested in the cit's best interests and were willing to stand up to the labor interests. I was also impressed by Yeh. Even though he supports binding arbitration in principle, he realized that binding arbitration and the excessive demands of the union fire employees have created tension in the community. He wanted his constituents to have the opportunity to weigh in on the issue. I always thought that is the way democracy is supposed to work.

Special kudos go to Pat Burt for addressing the union boss during the public testimony part of the meeting. Pat basically asked Spitaleri why his recnt press release was full of misinformation and Spitaleri was clearly floored by having the intentional mis-truths pointed out in public.

Like this comment
Posted by common sense
a resident of Midtown
on Jul 19, 2011 at 8:55 am

Espinosa, Price & Shepard were endorsed by the unions, and they voted for the union.

Yeh was also endorsed by the unions, but went against their wishes. He also works in the Oakland city auditors office and can see first hand what union demands can do to a budget.

Espinosa & Yeh are up for re-election next year. Voters need to send a message by holding Council members accountable for their votes.

Like this comment
Posted by Jim
a resident of Crescent Park
on Jul 19, 2011 at 8:58 am

"Special kudos go to Pat Burt" For what? Spitaleri wasn't floored. There was no misinformation in the press release. Name one thing in the press release that was wrong. You need to get your facts straight.

Like this comment
Posted by Carlitos waysman
a resident of Old Palo Alto
on Jul 19, 2011 at 10:52 am

Binding arbitration repeal ballot measure at last!!!!!!
It is about time, looking forward to cast my vote.

Like this comment
Posted by Council behavior
a resident of Midtown
on Jul 19, 2011 at 11:44 am

After long, long, debate and unrelenting pressure by the 4 union advocates on Councilman Yeh to change his view, it was strange to see Espinosa violate a call for a vote. He thought he had the privilege of a chairman to ignore that standard motion.

Kudos to Holman for her well crafted motion and to Yeh for his dignified resistance to pressure from his colleagues.

Like this comment
Posted by David Pepperdine
a resident of Another Palo Alto neighborhood
on Jul 19, 2011 at 11:49 am

Hurrah! At last Palo Alto citizens will have the opportunity to send a clear message to the unions and the council -- that the city employees are paid money to serve the city, not the other way around.

And in response to "So another words, get rid of binding arbitration and force whatever pay, salary, and benefit concessions you want down the public safety employees' throats."

Yes, it's called the free market. Get used to it. Us working stiffs who live in Palo Alto have.

Like this comment
Posted by Senor blogger
a resident of Palo Verde
on Jul 19, 2011 at 12:09 pm

I ask you all why do we have a council.
Why not just avoid every decision and submit everything to the voters.
It would save a lot of late night sessions and a lot of city staff overtime.

Like this comment
Posted by Who Needs Effectiveness
a resident of another community
on Jul 19, 2011 at 12:30 pm

Let's not stop here in our hunt for efficiency gains: Merge all of the city councils and administrations within the county (and, of course, layoff the redundant staff and close/sell the redundant facilities.)
Let's also leverage the free market system to its fullest within the emergency services departments: Have victims (or their loved ones if they're incapacitated) put their needs out for bid: "My husband is having a heart attack. Who wants to respond for $2,000? Do I hear $2,500?", or, "There's a burglar in my home. Who wants $700 to come save me? How about $750?"

Like this comment
Posted by Pete
a resident of Midtown
on Jul 19, 2011 at 12:37 pm

I will vote to remove arbitration, primarily because of the Fire Department's union which seems terminally clueless about its relationship to the community, a community that in almost any other time would support a form of arbitration.

Instead of reading the last FD ballot on freezing staffing levels except by election as an omen, the union proceeded as if it were a juggernaut full of implied threats and formal demands that still astonish by its aggressiveness.

The union's tactics betrayed the union members by forcing a vote to remove arbitration.

Like this comment
Posted by Bryan S.
a resident of Southgate
on Jul 19, 2011 at 12:48 pm

Overpaid workers are the ones who fear efficiency the most. I predict the union and its cronies will resort to their usual tactic of fear mongering in the coming days. ("If you take away my spiked pension starting at age 50, your loved ones will die next time there is a fire"... "If we can't bloat our hours with minimum staffing requirements set by ourselves, your house will burn down")

It will be a good thing for the city when we stop wasting money on overstaffed six figure firefighters paid to sleep and make primarily routine medical calls. As has been mentioned before on these boards, the job is now statistically safer than construction, farming, and a whole host of other crafts that.

I'd chop their pay 30%, switch to 401K pensions like the rest of the world, and use the considerable savings to close our defecit, lower taxes, repave roads, or hire more police. This is progress. The public unions are fighting it for their own gain.

Like this comment
Posted by Bob
a resident of South of Midtown
on Jul 19, 2011 at 1:29 pm

I think there is clearly something wrong with the current set-up when the firefighters can string negotiations along for a year with no end in sight and then appoint their union president to the panel.

But that doesn't mean arbitration is inherently bad. In fact, arbitration is a commonly-accepted method of dispute resolution which, in the private sector, is preferred by big business. I find it strange for our council members to say that -- no matter how it is written -- arbitration is unfair to the city. How could a neutral panel of experts with solidly-crafted guidelines inherently favor workers?

I think the smarter -- but harder -- thing to do was modify arbitration to ensure that it is not abused by the unions. But, instead of expending the effort to thoughtfully modify it, the city council wants to take a sledge hammer to it. That is lazy, if you ask me.

Like this comment
Posted by Peter Carpenter
a resident of Atherton
on Jul 19, 2011 at 1:36 pm

In my opinion it is a violation of an elected official's responsibility to the citizens whom they serve to turn over any decision to an non-elected official who has the authority to make binding decisions.

Like this comment
Posted by Me Too
a resident of Meadow Park
on Jul 19, 2011 at 2:45 pm

@Bob - arbitration is preferred by businesses as an alternative to litigation. The choice there is between having an arbitrator decide vs. a judge or jury. Here the choice is between the city deciding for itself vs. having an un-affiliated third party decide for you. Other than as a concession to the union, I can't see why you'd chose to a big decision to a third party. In the current and forseeable climate, we don't need to and therefore I can't see why we would.

Like this comment
Posted by RadioGuy
a resident of Barron Park
on Jul 19, 2011 at 3:41 pm

RadioGuy is a registered user.

Peter, it's pretty harsh to call arbitration a "violation of an elected official's responsibility". Back when arbitration was introduced, the City was going through the first years of adjustment to Proposition 13, massive declining school enrollment and an economy that saw unparalleled changes in interest and inflation rates. Despite being illegal under state law, many cities in California saw firefighters go on strike. San Mateo City firefighters went out for almost three weeks in 1974. San Francisco firefighters went out in 1975 and left almost the entire City without coverage with CalFire refusing to cross the picket line. Arbitration was seen as a way to take some of the rhetoric and emotion out of public safety labor negotiations. Sound familiar?

Now, the balance has shifted. Unions which were happy to point out private sector "dot com millionaires" and "kids with stock options" now have to justify their current work rules and compensation. As anyone in private industry knows, many high paying jobs have be off-shored and retirement packages have evaporated along with trillions of dollars of net worth in private property and individual 401K plans.

It's understandable that the firefighters union doesn't want to negotiate, since firefighters clearly will come away with less than they have now. Repealing arbitration seems like the best option to get balance back to into the labor negotiating process. Honestly, I feel sorry for the police union because they are also caught up in this due to no fault of their own. However, California law lumps both police and fire together as "essential services" so, there's no other option but to drag them along. It will interesting to see how the police union handles the ballot initiative here in Palo Alto.

Like this comment
Posted by Don
a resident of Duveneck/St. Francis
on Jul 19, 2011 at 4:38 pm

Frank. Every other employee has working conditions "forced down their throats". Why exempt public safety personnel? I think Larry Klein's argument is specious - the City has been more than fair in the past and should be in the future. Look at the outrageous pensions.

Thank you Council Members who voted for putting the measure on the ballot. Mr. Spitaleri has been nothing but a bully here and on the Sunnyvale Town Council.

And a special thanks to Mr Yeh for his thoughtful remarks and ability to see the long term effects of retaining binding arbitration.

Peter Carpenter has it right. The reason for arbitration in the past no longer exists. Let the Council do its job for all employees - not turn it over to an arbitrator who has no stake in the community.

Like this comment
Posted by Peter Carpenter
a resident of Atherton
on Jul 19, 2011 at 4:54 pm

"Peter, it's pretty harsh to call arbitration a "violation of an elected official's responsibility"."

The truth is often harsh. There is no justification for allowing an unelected arbitrator to obligate the City to pay pensions or salaries that elected officials have refused to grant.

Like this comment
Posted by Resident
a resident of Community Center
on Jul 19, 2011 at 5:00 pm

I agree with Peter sentiments that is is shirking responsibility for an elected official to defer to an arbitrator to settle wage issues with a union work force. It is illegal to strike if you are a safety employee and that is part of the employment package. If you don't like it, find another job. If you don't like the pay in PA, transfer to another dept.

The national average pay for a fire safety employee is less than $50K, and in parts of CA (San Diego) they start at less than $40K. Fire safety employees in this area are over compensated by at least $30K annually (ignoring the overtime issue), and over staffed. If all of the games were taken out of the minimum staffing and over time, and there was no binding arbitration, fire safety employees in Palo Alto would make about $70K.

It is unfortunate that police are being caught up in this. Police have a much more challenging, responsible, and dangerous job. And they have been much more reasonable in their dealings with the city.

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

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