After 16 months of heated negotiations, Palo Alto and its largest firefighter union on Friday reached a tentative agreement on a three-year contract that eliminates the longstanding and controversial "minimum staffing" requirement in the union's contract.
Members of the firefighters union, International Association of Fire Fighters, Local 1319, voted by a margin of more than 4-to-1 Friday afternoon to ratify the new terms, which include reforms to pension and health care and -- most significantly -- the elimination of the requirement to keep at least 29 firefighters on duty at all times.
The City Council had tentatively approved the terms of the agreement and is scheduled to formally adopt it on Oct. 17.
With the agreement, the firefighters join the more than 800 other city employees -- including members of the Services Employees International Union and the non-unionized group of managers and professionals -- who have seen their benefits scaled back over the past two years. The new contract establishes a "second tier" pension formula for new employees. These workers would get pensions of 3 percent for each year worked, with retirement eligibility at age 55, the city announced. The pension calculation would no longer be based on the single highest year's salary but would reflect the average salary of three highest consecutive years.
Firefighters would also now be required to pay their full 9 percent contribution into California Public Employees' Retirement System (the city previously paid both the employer and the employee contribution). Employees and future retirees will also be required to pay 10 percent of their medical insurance premium.
Perhaps the most critical provision of the new contract is the minimum-staffing provision. City Manager James Keene had told the Weekly in June that eliminating this provision would be key to any deal with the firefighters union. The union had proposed over the course of the negotiations to cut the number of "minimum" employees, but the city has consistently maintained that the requirement needs to be scrapped altogether because it hinders the City Council's ability to change staffing levels.
The city's position was bolstered by a February report from consulting firms ICMA (International City/County Management Association) and TriData, who wrote that the city "should never agree to a minimum-staffing requirement that establishes the total force as this equates to establishing the level of service provided."
Though the union had previously argued that the provision is necessary to guarantee public safety, members ultimately softened their stance. Union President Tony Spitaleri said the city agreed, in exchange, to keep each fire apparatus staffed by three people.
"We agreed to a system that allows us to have some staffing configuration in the contract and that gives the city some flexibility," Spitaleri told the Weekly.
Spitaleri said the union voted "overwhelmingly" to support the proposed contract, with more than 80 percent agreeing to ratify it.
"We heard loud and clear about the city's issues, and we've been dealing with them during the negotiations," Spitaleri told the Weekly. "We've made previous offers in the past that weren't accepted, but I think the overall contract is good."
The city estimates the contract, which runs until June 30, 2014, to save the city $1.1 million in the current fiscal year and $1.5 million annually starting next July. The city's current budget assumes $4.3 million in concessions from all of the city's public-safety unions. In a joint statement from the city and the union announcing the terms of the new contract, City Manager James Keene said the city "expects that the elimination of minimum staffing will produce significant additional savings in firefighter overtime through a more strategic deployment of staff resources."
"The elimination of the unit-wide minimum staffing requirement was a key objective in the City's negotiations," Keene said. "This change is needed to help reduce overtime costs, provide more staffing flexibility, and achieve operational efficiencies."
The tentative agreement follows 16 months of tense negotiations between the city and the union. The two sides began negotiating in May 2010. After failing to agree on the new terms, the city declared an "impasse," sending the dispute to binding arbitration. The arbitration proceedings began on Sept. 20. Once the City Council approves the new deal, the city and the union will cancel the arbitration proceedings, according to the city's statement.
The two sides remain divided, however, over the City Charter's binding-arbitration provision, which enables a three-member arbitration board to settle disputes between the city and the union. The City Council voted in July to place a repeal of the provision on the November ballot. The union strongly opposes the repeal.
Spitaleri said the new agreement demonstrates that the two sides are capable of working things out even amidst major disagreements.
"And it's another example of a settlement being resolved without binding arbitration," Spitaleri said.
Mayor Sid Espinosa said he was "pleased that we have been able to reach agreement with our Firefighters' Union after a long negotiation period."
"The City is not out of the woods financially, but this agreement with the Firefighters is a necessary step forward," Espinosa said.