In an effort to make traditionally secretive labor negotiations less so, four members of the Palo Alto City Council are proposing a policy that would publicize every offer and counteroffer in the city's discussions with its employee unions.
The proposal from Vice Mayor Eric Filseth and Councilmen Tom DuBois, Greg Scharff and Greg Tanaka, aims to give the public a greater role in the labor talks, which generally take place behind closed doors. In a memo outlining the plan, the four council members are proposing a set of reforms that would make it easier for residents to see how much each offer and counteroffer will add to the city's long-term pension and health care liabilities.
One proposal calls for staff to prepare a "fiscal summary" at the outset of negotiations outlining the costs and liabilities associated with each bargaining unit. Staff would then post on the city's website every formal written proposal that its negotiators send or receive within two days of transmittal. Each would be accompanied by a fiscal analysis showing the impact of the proposed terms on pensions and other post-employment benefits.
The new memo, which the City Council plans to discuss on Monday, argues that the city's decisions on labor contracts, particularly as they pertain to pensions and medical obligations, "are public concerns which will be borne by the community for decades, and merit meaningful public review." And yet these discussions the memo notes, "are currently reached through essentially private negotiations, without meaningful opportunity for public examination."
"The goal of this Council Policy is appropriate transparency: to provide timely and meaningful fiscal and actuarial information about labor negotiations to the public, while protecting the fairness and integrity of the bargaining process," the memo states.
The proposal comes at a time when Palo Alto is making a concerted effort to better measure and manage its mounting pension obligation, which officially stands at $338.4 million, according to the city budget, but which some believe may be closer to $1 billion. The council agreed on Feb. 3 to set "budget and finance" as one of its top priorities for the year -- with a special focus on rising pension and infrastructure costs.
Filseth and Tanaka, the council's two leading fiscal hawks, see the issue of unfunded obligations as particularly critical. Tanaka has consistently called for the city to more clearly outline the city's pension problem and to more fully consider the costs of pensions and health care in making staffing decisions.
During last year's budget hearings, he referred to the pension backlog as the city's "Priority One" and said it "dwarfs everything else by a lot." He was also the only council member who voted against the budget last June, arguing that it doesn't call out the city's unfunded liabilities explicitly enough.
Filseth, who chaired the Finance Committee last year and who was the lead author of the memo, has persistently advocated for getting accurate pension data, as well as for preparing for the possibility that CalPERS will lower its expected rate-of-return, thus requiring larger near-term contributions from Palo Alto and other cities whose pension plans it administers. In an interview with the Weekly last fall, Filseth argued that requiring Palo Alto to make larger "minimum payments" to CalPERS will "crowd out" the city's ability to hire staff, fix potholes and provide other types of services to which residents have become accustomed.
Scharff, who chairs the Finance Committee this year, said he began discussing the memo with his colleagues last year, with the goal of creating a better process for negotiations. Having more discussions in the open would benefit both the city and the union, he said.
"Transparency helps everyone," Scharff told the Weekly. "Hopefully, it creates a better atmosphere for everyone."
Labor negotiations currently stand atop the council's agenda, both literally and figuratively. Monday's council meeting will be the third in a row that begins with a closed-session conference between the council and its labor negotiators.
According to the meeting agendas, the talks pertain to every major labor group, including the city's largest union, the Service Employees International Union, Local 521; its two main public safety unions, International Association of Fire Fighters, Local 1313, and Palo Alto Peace Officers' Association; and the Utilities Management Professional Association of Palo Alto. Also listed are the two small bargaining units representing high-level police and fire management – Palo Alto Police Managers' Association and Palo Alto Fire Chiefs' Association – and the "management and professionals" group, which includes about 200 employees and which is not represented by a union.
Scharff said the fact that the city is about to start negotiating with most of its labor groups makes the timing of the memo particularly pertinent.
In crafting the memo, the four council members borrowed heavily from other jurisdictions. San Jose already posts fiscal summaries associated with each of its bargaining units during negotiations and publicizes all formal offers and counteroffers, according to the memo.
The memo also proposes adopting the Fullerton policy of publicly disclosing the impact of city proposals on "unfunded actuarial liabilities," which includes pensions and retiree medical expenses.
The four council members also want to have a policy that empowers the council to direct the city's negotiations in either open or closed session, similar to what is already in place in San Jose.
If the majority of the full council agrees with the memo's recommendations, the proposed policy would go to the Finance Committee for further review and refinement. After that, it would be presented to the various bargaining groups during "meet-and-confer" discussions.
Yet the four council members also rejected several policies, including one from San Jose that calls on the city manager to give regular updates on labor negotiations in an open setting, with an opportunity for union representatives to weigh in. In addition, both San Jose and Fullerton have policies that discourage negotiations between individual council members and bargaining units. The memo does not recommend adopting such a policy, noting that ex parte communications "have not been a concern in Palo Alto."
Scharff told the Weekly that in drafting the memo, council members wanted to keep their recommendations relatively modest and to give its unions plenty of opportunity to weigh in.
"You want to take small steps and see how everyone feels in both directions," Scharff said. "I think it's really important that we all work together on this. Small steps make a lot more sense."