Why The Union Concessions Are Not a "Fair Share"

Tonight, the City Council approved the tentative agreements reached previously with all of the unions. Most council members applauded the unions’ willingness to make significant concessions to help balance the budget. Now, if I actually had copies of the agreements, I’d be able to give you a thorough analysis of the issues. Unfortunately, the City has consistently refused to provide copies. While they finally made available the staff reports analyzing the main terms of the agreements on Friday, the actual agreements are still secret. Outrageous. Particularly considering that, according to CM Schaaf, the staff summaries leave out some critical facts.

But even with just the summaries, I can tell you that most of the “concessions” are not significant, and are not long-term. For the most part, the concessions are temporary only. They only last for the duration of the agreements (i.e. two to four years). So they do nothing to address the long-term, structural problems with Oakland’s finances. Which means that in two to four years, we’ll be back here with the same financial woes. Actually, probably worse woes (as explained below).

Not only are they temporary, but these “concessions” aren’t really “concessions.” Rather, they are trades. For example, most of the MOUs call for furlough days. Which means that the employees will get lower overall pay (but not benefits) for a couple of years. But in exchange, the employees don’t have to work on those days. So their actual daily or hourly rate isn’t getting cut. And, of course, the real losers are the citizens, who don’t get the value of their services. And we don’t get anything in exchange for the worse service. On the contrary, we’re being asked to pay additional taxes for the privilege of suffering through ever worsening service cuts.

So let’s go through the summaries of each union contract in detail. The most publicized was the MOU with OPOA, the police union. They did make a long-term, significant and meaningful concession - a 9% contribution to their pension. That is not a temporary concession, and it will save the City between $6 and $8 million per year. In addition, the City negotiated a new two-tiered pension system. Existing employees continue to get 3% at 50; new hires, however, will have to work an additional 5 years to get the same pension benefit. The summary doesn’t tell us how much money that will save, however. And in exchange, the OPOA got some significant benefits - a no-layoff/no furlough guarantee. Now, I’m not opposed to no layoffs. After all, the force has already been decimated through the last layoff and attrition. But this protects existing officers, not citizens, because the City has already stated its intention to allow the force to continue to drop through attrition. I wish OPOA had negotiated an actual staffing requirement. And then there’s the 4% pay increase that the police will get in 2015. How is the City going to pay for that?

Next is the firefighters’ contract. They agreed to an 8.85% salary reduction for FY12-14. But this is not the same as the 9% contribution by OPOA. Why? Because the 9% contribution is permanent. This pay cut for firefighters is temporary. At the end of 2013/14, firefighters’ insane pay will go right back to where it was before. Why do I say their pay is insane? Because the last time they had a recruiting drive, before the recession hit, there were hordes of people applying for a smattering of jobs and it was a total zoo. Any job that has people camped out in sleeping bags for a chance at “winning the lottery” is clearly overpaid. http://articles.sfgate.com/2007-12-04/bay-area/17272555_1_firefighter-frank-ogawa-plaza-oakland-fire-department

Firefighters are also agreeing to a new two-tiered pension system, where new hires will have their pension based on the highest three year average. The City is not disclosing how much this will save the City. Lastly, firefighters will temporarily give up two shifts of vacation, and there will be rotating closures of two companies for two years only. According to CM Shaaf, one of the conditions of this concession was not included in the staff summary - i.e. that firefighters get guaranteed full staffing through 2017.

With respect to Local 1021, members are being asked to pay an additional 4% toward PERS. The staff summary does not provide whether this change is permanent or temporary. In addition, the MOU calls for a new two-tier retirement system. However, the main “concession” appears to be “mandatory leave without pay” days, i.e., furlough days. Not only will the employees not have to work on these days, but they also were able to negotiate numerous language/verbiage changes to their contract, including the grievance procedure, the contract out provisions, comp time, vacation time, sick leave and other provisions. All of these language changes were negotiated for the benefit of the union, not the City.

Local 21 also agreed to a two-tier retirement plan (with no specific savings described) and otherwise, agreed only to 12 furlough days. Local 1245 agreed only to 12 furlough days.

Real and meaningful concessions would have included an across the board pay cut (without a comparable cut in hours); a requirement that employees work a full workweek (40 hours versus 37.5 hours); and a cap on health benefit premiums. But the City got none of those things. I doubt they even asked.

“Fair share?” Well, to figure out if City employees are giving up their “fair share,” one would need to look at what their total compensation (benefits, salary, hours etc.) looks like compared to other public and private sector employees performing similar jobs in the Bay Area. And one would also need to look at what the City can actually afford. These are the only factors which, in my mind, would address what is “fair.” Calling a 9% savings, achieved through temporary savings, where the employees actually get to work less, a "significant concession," is absurd, particularly when taxpayers are being asked to pay more money for less services. Not to mention that the parcel tax proposal is for five years, and the employee concessions are mostly only for two years. What’s “fair” about that? But more on the proposed parcel tax later.