Firefighter Contract Strikes a Balance

City Saves $887k with Fair Deal for Staff and Community.

By Don Saylor and Stephen Souza.

On December 15, 2009, the Davis City Council approved a labor contract with the Davis Professional Firefighters Association, Local 3494 (DPFA) that spans the period December 16, 2009 through June 30, 2012.

As a local government agency, the City of Davis is obligated by state law to conduct labor negotiations with its employees.  The provisions of the Meyers-Milias-Brown Act require local government agencies to meet and confer in good faith regarding wages, hours and other terms and conditions of employment with recognized employee organizations.  In addition, all proceedings of the City Council and other local agencies are subject to the open meeting rules of the Brown Act.

This year, four of the five city employee contracts are being negotiated; the contract with DPFA is the first to be completed.  The fifth, with the Davis Police Officers Association, will expire June 30, 2010.

In today’s rocky economy, the major objectives in employee bargaining for Davis and all local public agencies in California are short-term fiscal stability and long-term sustainability of public employee compensation. In the past, public employees at all levels and across jurisdictions were often compensated at lower levels than many private sector employees and were provided greater job security and benefit packages as a way of making up for that discrepancy. Over time, incremental bargaining has resulted in compensation structures that must be reexamined.

Like all public agencies, private employers and families across the country, the City of Davis has tightened our belt this year. We have made cuts totaling about $3.4 million and continue to monitor our financial status.  A significant part of that reduction is dependent upon negotiating with city employees for concessions.

On May 19, 2009, the City Council adopted a set of Guiding Principles to systematically address the range of bargaining issues under consideration.  We have used these principles to help guide us in this round of negotiations with all four of the bargaining units.

The contract between the City of Davis and the DPFA makes significant progress in addressing the Guiding Principles and represents a major step in employee bargaining in Davis.  This contract is a voluntary agreement by an employee group to assist the City by reducing their take home pay and their benefits from the level they received prior to the contract. Specific provisions include:

SALARY REDUCTIONS

• Immediate salary reduction of 6% for 2009-10.  This is an actual reduction from the pay levels in effect in 2008-09.  This amounts to a pay cut of $423 per month for the majority of firefighters.
• 4% lower hourly salaries in 2010-11 than those paid in 2008-09.
• 3% lower hourly salaries in 2011-12 than that actually paid in 2008-09.

BENEFIT RESTRUCTURING

• Cap on cafeteria cash out payments at 80% of the amounts actually paid in 2008-09 for the life of the three-year contract.  This is a 20% reduction in money people had in their pockets through this long established benefit and amounts to about $250 per month for employees who take this full benefit.  Without this provision, that payment would have increased annually at whatever rates the health insurers would have assessed.
• Implementation of a vesting requirement for retiree medical benefits of ten years employment for 50% and twenty years for 100%.  Under prior contracts the City had no vesting requirement.
• Ceiling on total cost of compensation (including retirement contributions and health benefits as well as salary) to no more than 1.5% regardless of the amounts charged by PERS or the health care providers.  If benefit costs increase beyond this level, employees will pay the difference out of their own pockets.
• Contribution to the unfunded liability of retiree health care.

In aggregate, the savings to the City from this contract is about $887,000 over the three-year period in comparison to the costs of continuing the prior contract for this bargaining group.  This exceeds the DPFA proportionate share of the city’s reduction target for employee compensation.   We are not aware of more significant employee concessions attained by other jurisdictions through negotiations even in these times.  They are reductions in excess of any the City of Davis has accomplished in prior negotiations. We encourage you to review the actual language of this contract at: http://cityofdavis.org/meetings/councilpackets/20091215/05%20Fire%20MOU.pdf

We appreciate that the members of the Davis Professional Firefighters Association have stepped up to assist the City at a challenging fiscal time. These contract changes amount to real reductions that have an impact on the lives of our employees and their families.  At the end of the three-year contract they will still be paid an hourly rate less than their pay rate in 2008-09.

Negotiations are still underway with management staff and PASEA, representing planning, analytical and service employees.   We are confident that fair agreements will soon be attained with these two groups.  Unfortunately, the City has reached impasse with DCEA, the bargaining unit representing employees working in public works and park maintenance and similar positions.  We have implemented a last, best contract offer with DCEA and are proceeding with the steps necessary to protect the city’s interests.

As representatives of the public we continually balance multiple objectives.  We are responsible to assure both short-term fiscal stability and long-term sustainability in employee compensation.  We have a legal responsibility to pursue these objectives through good faith bargaining and fair labor practices.  Finally, it is good management practice and we have a moral responsibility to treat those we employ with fairness and compassion on behalf of our community.  We believe that the contract approved by the City Council on December 15 strikes the right balance and is a fair deal for our community and our employees.