Palo Alto's breakthrough agreement with its firefighter union over a new labor contract will save the city more than $1 million in the current fiscal year and will likely keep the city from laying off police officers and closing fire stations, a prospect city officials have been considering since May.
The tentative contract, which the city unveiled Wednesday night and which the City Council is scheduled to officially approve Monday night, includes a host of structural changes to firefighter benefits, including a second pension tier for new employees and a requirement that employees contribute 10 percent toward their medical premiums.
Firefighters will also now be required to chip in toward their own pension plan rather than having the city pay both the employer and employee shares to the California Public Employees Retirement System (CalPERS). Under the proposed contract, union members will immediately start paying 6.5 percent of the PERS member contribution -- a share that will rise to 9 percent next year.
Most importantly, the contract removes the long-standing and controversial "minimum staffing" provision, which requires at least 29 firefighters to be on duty at all times. Instead, the contract sets staffing levels for individual engines, trucks and rescue companies -- levels that are "consistent with standards commonly followed in most fire agencies," according to a report form Interim Human Resource Director Sandra Blanch.
The minimum-staffing provision has come under fire over the past two years from the City Council and City Manager James Keene, who called eliminating it the key to the new agreement with the firefighters. Union President Tony Spitaleri had argued in the past that the provision is necessary to ensure adequate staffing levels in the department and maintain safety.
"The City and fire union representatives discussed this extensively and agreed that eliminating the shift staffing provision provides the City with the flexibility to take an engine out of service and/or close, reduce or 'brown out' the service of a station if needed for operational, efficiency, financial or any other reason," Blanch wrote in the report.
The minimum-staffing provision has been completely deleted in the new contract and replaced with an "apparatus staffing" section that specifies that each engine, truck and rescue company will be staffed with one fire captain, one "fire apparatus operator" and one firefighter. The fire department's paramedic unit will also be staffed by two personnel.
The two sides reached a contract after a 16-month standoff, a declared "impasse," and the launching of binding-arbitration proceedings. In June, the City Council passed a budget with a $4.3 million hole in it -- a hole that the council planned to fill with $2.3 million in concessions from firefighters and $2 million from police officers. In May, Interim Director of Public Safety Dennis Burns reported to the council that without these concessions, the city would have to eliminate 11 police officer positions and shut down at least one engine company to close the budget gap.
At Tuesday's debate over Measure D -- a proposal to repeal binding arbitration for public-safety unions from the City Charter -- Councilman Greg Scharff referenced the Burns' presentation and said laying off 11 police officers was "simply not acceptable to us."
Though the new contract only shaves $1.1 million off the $4.3 gap, the budget adjustments are now unlikely to be as draconian as initially feared. According to David Ramberg, assistant director of the Administrative Services Department, the city has seen "modest improvements" in the local economy, with sales tax revenues about $1.2 million higher than projected in the 2011 budget.
Under a new proposal, which the council's Finance Committee is scheduled to discuss Tuesday, the city would close the $4.3 million gap with $1.1 million pegged from funds that were set aside for pension and healthcare increases in 2013 and a $2.1 million transfer from the city's Budget Stabilization Reserve, which has increased because of the improved economy.
If the committee and, ultimately, the council approve the plan, it would effectively close the $4.3 million gap without requiring any significant reductions in service levels. In his report, Ramberg alluded to the layoffs and station brownouts and said that because "these reductions could have an impact on service delivery, staff is also pursuing labor concessions through contract negotiations with the four public-safety unions."
"It is the City Manager's recommendation to not proceed with these cost saving reductions at this time," Ramberg wrote. "These service level reduction options could still be considered depending on how negotiations proceed."