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HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 06/13/2006 - RESOLUTION NO. 2006-068 EXPRESSING THE CITY COUNCI ITEM NUMBER: 4 AGENDA ITEM SUMMARY DATE: June 13, 2006 FORT COLLINS CITY COUNCIL STAFF: Darin Atteberry SUBJECT Resolution No. 2006-068 Expressing the City Council's Opposition to a Citizen-initiated Charter Amendment Pertaining to Collective Bargaining. RECOMMENDATION Staff recommends adoption of the Resolution. EXECUTIVE SUMMARY A special election has been called for September 12, 2006, for the purpose of submitting to the electors of the City a proposed amendment to the City Charter which would establish a system of collective bargaining to replace the system that is contained in the City Code. City staff recommends that Council express its opposition to the proposed Charter amendment and urge the electors not to vote for the amendment, primarily because the system, unlike the one contained in the City Code, would entail binding arbitration, it would allow for renegotiation of the collective bargaining agreement already in place between the Fraternal Order of Police and the City, and it would preclude any reduction in compensation or benefits of police employees unless the members of the bargaining unit consented to such reduction. Staff believes that the system of collective bargaining contained in the City Code offers adequate opportunity for good faith bargaining between the City and its police employees. BACKGROUND An initiative petition proposing an amendment to the City Charter pertaining to collective bargaining has been submitted to the City Clerk and has been determined to be sufficient for placing the proposed measure on the ballot at a special election to be held September 12, 2006. The collective bargaining provisions which would be added to the City Charter under the proposed Charter amendment would replace an existing system of collective bargaining established in Chapter 2, Article VII, Division 7 of the City Code. That system,which had been approved by the electors of the City in August of 2004,was subsequently modified by order of Court,primarily to eliminate the binding arbitration provisions of the system since those provisions were inconsistent with the City Charter. The new collective bargaining system that would be established pursuant to the proposed Charter amendment would be similar in most respects to the existing system in the City Code except that it would re-establish binding arbitration if an impasse was reached between the City and the bargaining unit with regard to the terms and conditions of a collective bargaining agreement. It would also allow the existing collective bargaining agreement that was reached last year to be re- June 13, 2006 -2- Item No. 4 opened and renegotiated, with that agreement being the"floor" for any future negotiations, so that the compensation and benefits of members of the bargaining unit could only be increased in the future and not decreased unless the bargaining agent agreed to such a reduction. These concerns are discussed at greater length below. 1. The Fraternal Order of Police ("FOP")has claimed that the City has ignored the will of the voters and failed to negotiate in good faith,and that binding arbitration is necessary to bring the City to the table. Why this statement is a problem: From May through September, 2005, the City and the FOP negotiated the terms of the current contract with give and take on both sides. The City voluntarily gave five FOP negotiators paid time off to negotiate with the City. When the FOP declared an impasse in the negotiations, the City exercised its right to challenge portions of the collective bargaining ordinance in court. The FOP and the Court agreed that portions of the ordinance were inconsistent with the City Charter and those provisions were invalidated. The provisions of the ordinance that were left in place permit collective bargaining and mandate good faith negotiations, and those provisions resulted in a collective bargaining agreement that was signed by both the City and the FOP. The City remains willing to follow the valid provisions of that ordinance, including those provisions which allow the police employees to organize and bargain collectively, engage in bargaining in good faith, and enter into a contract that both the City and the FOP consider fair. City employees, whether in Police Services or other service areas of the City, are valued and appreciated. They are competitively compensated, with due consideration given to the financial condition and needs of the City. The Charter amendment, with its binding arbitration and prohibition on any reduction in pay or benefits, will skew the job market concept of employment, drive up the cost of government, and severely limit local control of City finances, all to the taxpayers' detriment. 2. The adoption of the Charter amendment would allow the FOP to reject the two year collective bargaining agreement it signed with the City on September 21,2005,and require the City to re-negotiate a new agreement for 2007.E Why this provision is a problem: Under the existing collective bargaining system, the City and the FOP bargained in good faith to come up with a two-year agreement that runs through 2007. The FOP is asking the voters to allow them to repudiate the agreement. Negotiations are costly and time consuming, requiring both sides to dedicate upper-level staff time to the process and to hire attorneys, consultants, and experts. Staff believes that it makes no sense to go through this process again when the City and the FOP reached an agreement acceptable to both at the time. Not only would the FOP have a right to reopen all of the terms in the current agreement dealing with mandatory subjects of bargaining and renegotiate them for 2007,it would have the right to introduce any other mandatory subjects that are not covered in the existing agreement and allow them to take all of those to binding arbitration. Significantly,that agreement and all of its terms were conditioned on a two year agreement; the FOP now wants the right to get the benefits of the first year of the agreement(many of which would not have been in place if it had simply been a one year agreement) and not be bound by any of the provisions in the second year. Section 17.15 of the Charter Amendment. June 13, 2006 -3- Item No. 4 3. Under the proposed Charter amendment, the current contract benefits and any additional benefits offered to police employees outside the contract could never be reduced, no matter what the financial condition of the City or the citizens'willingness to pay,unless the FOP agreed to the reduction. Not even an arbitrator could rule that lower benefits were appropriate. This "floor" means that benefits could only be increased but never decreased 2 Why this provision is a problem: If the FOP were allowed to renegotiate its agreement, that agreement and all the other employee policies in place at the present time would become the"floor" for such future negotiations under this Charter amendment,because the Charter amendment would prohibit pay range reductions, reductions in leave accruals, reductions in insurance coverage, and increases in insurance premiums, deductibles and co-pays', unless the FOP agreed to the change. This one-sided provision would drive the cost to the taxpayer in only one direction for this group of employees. The taxpayer foots the bill when salaries and benefits go up. In the tough financial times that Fort Collins is currently experiencing, salaries and benefits cannot always go up. Sometimes, insurance co-pays and deductibles must be raised and insurance coverage reduced to avoid huge cost increases and to stay in line with other cities and private employers. 4. Under the proposed Charter amendment,if the City and FOP were unable to agree on an issue such as rate of pay or days of vacation, the City would have to go through binding arbitration. A professional arbitrator would be brought in to conduct a hearing and decide what the pay and benefits will be for up to two years. ^ Why this provision is a problem: Binding arbitration means that an unelected third party not accountable to the taxpayers would make the final decision as to how City tax revenues should be spent. And, arbitration is costly. While the City would pick the pool of arbitrators, for all practical purposes,the minimum qualifications for the arbitrators set forth by the Charter amendment would limit the pool to attorneys who specialize in labor issues. The daily rates for preparing for the hearing,conducting the hearing,and writing a decision range from$750 to$2,100 per day plus costs and expenses and from $100 to $300 per hour for partial days. The taxpayers would pay half of these costs. Depending on the number of issues reaching impasse, the arbitrator hearings could be lengthy. The staff time dedicated to arbitration hearings would be substantial and with the financial stakes associated with a two year contract being so high, it's likely that both the City and the FOP would incur the costs of expert witnesses. Not only is binding arbitration expensive and time consuming but,more importantly,it removes the taxpayers'elected representatives and the City Manager from the process of deciding where limited City financial resources are to be spent. Absent fraud, corruption,or arbitrariness on the part of the arbitrator,it is almost impossible to have an arbitrator's decision reversed by a court.' Staff believes that it is not in the best interests of the taxpayers to have critical financial issues decided by an attorney from a different city or state who probably has no idea about the local issues that are facing Fort Collins and who is not in touch with community values. 1 Section 17.16 of the Charter Amendment. J See the expansive definition of"fringe benefits" at Section 17.2 H. of the Charter Amendment. " Section 17.8 of the Charter Amendment. 5 For the factors allowing court review of arbitrator's decision,see Section 17.12(B)of the Charter Amendment. June 13, 2006 -4- Item No. 4 5. The Charter amendment would use national salary and benefit data to establish to local compensation and benefits. Why this statement is a problem: Section 17.10(E) of the Charter amendment would direct an arbitrator to consider, in resolving an impasse as to compensation and benefits,the compensation, benefits,hours,and other terms and conditions of employment of other law enforcement employees performing comparable services in public employment in comparable national and local communities. Requiring comparison with comparable "national" communities could be problematic, since the market and cost of living in other areas of the country may differ very substantially from Fort Collins, the cost of sampling on a national basis will likely be substantial. 6. The FOP has claimed that the Charter amendment is needed because police employees have been under-compensated by the City. Why this statement is a problem: This claim is simply not true. While the majority of City employees had to adhere to a pay freeze for merit and skill increases in 2004 and 2005,only the Police Sworn positions continued to receive skill increases to the maximum of their pay range. The 2004 and 2005 skill increases for Police Sworn positions ranged from 6.94% to 13.74%. All of this occurred prior to the implementation of the collective bargaining agreement between the City of Fort Collins and the FOP. In 2006, the City implemented a new pay plan and granted pay increases to all employees including members of the bargaining unit. The 2006 skill increases for the bargaining unit members ranged from 7.93%to 14.83%. Those that are not at the 2006 pay range maximum are eligible to continue to receive additional skill increases in 2006. The 2006 COLA, merit, and skill increases for the remainder of the City employees ranged from 5.9% to 10%. Other City employees are not eligible to receive additional merit or skill increases in 2006. Pay range maximums for all City employees, including members of the bargaining unit, are based upon market data gathered from a variety of organizations along the Front Range of Colorado. While the benchmark organizations used in this process(and recommended by a consultant in 2004) may not be totally agreed upon by the FOP, the City's benchmark organizations are those that are similar in size and services to Fort Collins. The benchmark organizations include twelve cities,five counties, and the State of Colorado. The City has been acknowledged as a"safer community"and an"ideal place to work"where other organizations along the Front Range have not. Based on size, services, safer community, etc., organizations such as the City/County of Denver are not included as a benchmark. In addition, an average actual pay analysis was recently conducted by the City's HR department. The average actual pay of the members of the bargaining unit average actual pay falls anywhere from 2.19%to 13.99%above the benchmark organizations' average actual pay. These percentages include the five counties and the State of Colorado. Some might say that county sheriffs perform different duties than patrol/detective officers, so if you take out the counties and State of Colorado from this analysis, average the actual pay of the members of the bargaining unit falls from 1.13% to 13.36% above the 12 benchmark City's average actual pay depending on the job being considered. In summary,not only are the pay range maximums set at the 70th percentile of the labor June 13, 2006 -5- Item No. 4 market but the bargaining unit members' average actual pay falls well above those of their peers along the Front Range of Colorado. Lastly, members of the bargaining unit continue to contribute to their retirement plans (401 a and 457) at a higher percentage than other City employees. In addition, the employer contribution (match) into the retirement plans for these employees is greater than the contribution made by the City for the remainder of the organization with the exception of the Council Employees and Service Area Directors (a total of 11 employees). 7. The Charter amendment states that the provisions of a collective bargaining agreement would override any conflicting ordinance of the City. Why this statement is a vroblem: The City Council has elected to make important policy decisions for the City and its members are accountable to the citizens for those decisions. The Charter amendment states in Section 17.14(B) that whenever there is a conflict between the terms of a collective bargaining agreement and any rule, executive order, procedure, policy or even any ordinance of the City which is applicable only to employees of the City, the provisions of the collective bargaining agreement, would prevail. This means that the decision of an unelected, arbitrator could override ordinances adopted by the Council or even any ordinance adopted by the electors of the City. 8. The FOP has claimed that the City has plenty of money in the form of reserves which could easily be used to fund increased salary and benefits for police employees. Why this statement is a problem: Many of the reserves referred to by the FOP are restricted for specific uses that cannot be legally diverted to other uses. For example,Art. X, Sec. 20 of the state constitution requires that the Citymaintain an emergency reserve to respond to natural disasters such as the 1997 flood or the 2003 blizzard. As of year end 2005,this reserve balance was $3.6 million. In addition,reserves resulting from specific program revenues are set aside to be spent exclusively on those programs. Two significant examples are the Police Department's camera radar program and its participation in the Larimer County Drug Task Force. Reserves for these two programs totaled$1.1 million at year-end 2005. Additionally,expenditure of resources does not always occur uniformly within a 12 month period as presented in the budget. As a result, the related program or project encumbers the funds that are committed to third party vendors for its completion. As of year-end 2005, approximately$8.2 million of the reserves were committed to third party vendors. So while the City General Fund Balance actually increased by $3.2 million during 2005, a significant portion of that increase was used to fund the restricted reserves described above. It should be noted that, aside from the restricted reserves, the City continues to maintain a financial uncertainty designation set at a minimum of 3.5% of the General Fund expenditures. Prior to the 2002 recession, this reserve stood at approximately$5.9 million, well above the minimum. As of year-end 2005,this balance(funded at the minimum level)totaled$3.2 million. While this amount is still significant,it is only intended for unforeseen budget shortfalls. It is not intended to be spent on enhancing the salary and benefits of City personnel. Even if the reserves could be used to fund increases in police pay and benefits,the reserves are one- time moneys. The flow of funds into these reserve accounts is insufficient to pay the ongoing year- after-year amounts that would be necessary for salary and benefit increases. Remember that the June 13, 2006 -6- Item No. 4 Charter Amendment provides that the salary and benefits can only be increased, not decreased, so the need for additional funding will go up each year. The reserved funds won't be used for their intended purposes and the cash flow necessary to fund salary and benefit increases will not be available. It is not responsible to use reserved funds to satisfy ongoing salary and benefit increases, especially in light of the anticipated $6.8 million 2007 budget shortfall. 9. The FOP has claimed that the Charter amendment is needed to improve police staffing, services, and public safety.' Why this statement is a problem: The Charter amendment specifically states that "standards of service of the police department and the City and training of officers are prohibited subjects of bargaining,' and "staffing of the police department" is only a permissive subject for bargaining.' Thus, collective bargaining will do nothing to ensure public safety, higher staffing levels or higher service levels of Police Services. If anything, the Charter amendment will lead to fewer dollars being available for increased staffing and services because the dollars will instead go towards negotiation and arbitration expenses and increased salaries and benefits for current police employees. The constant "negotiating" for salary and benefits required by the Charter Amendment is far more likely to distract police personnel from law enforcement duties. Paying FOP negotiators to negotiate instead of performing their law enforcement duties will do nothing to promote public safety or add officers to the streets. The petition circulators and the FOP officials have not accurately stated the substance and intent of the Charter Amendment. The Charter Amendment does not help police officers fight crime, but rather will lead to a system of preferential treatment, divisiveness, and mistrust that will harm the relationship among police employees, other employees of the City, City management, and citizens. Staff Recommendation: For the foregoing reasons,staff recommends that Council adopt the proposed Resolution expressing Council's opposition to the proposed Charter amendment and urging the electors of the City to vote against the Charter amendment. 6 See editorials by FOP lodge officers in Coloradoan dated 5/8/06 and 4/11/06,and FOP flyer entitled Support the Professional Policing Initiative. ' Section 17.3 (C)(4)and(8)of the Charter Amendment. 8 Section 17.3 (D)(4)of the Charter Amendment. RESOLUTION 2006-068 OF THE COUNCIL OF THE CITY OF FORT COLLINS EXPRESSING THE CITY COUNCIL'S OPPOSITION TO A CITIZEN-INITIATED CHARTER AMENDMENT PERTAINING TO COLLECTIVE BARGAINING WHEREAS,this same date,through the adoption of Resolution 2006-067,the City Council has submitted to the registered electors of the City at a special municipal election to be held on Tuesday,September 12,2006,a proposed citizen-initiated amendment to the City Charter that would grant certain police employees the right to organize and bargain collectively with the City (the "Charter Amendment"); and WHEREAS, if approved by the voters, the system of collective bargaining proposed by the Charter Amendment would replace the system of collective bargaining for police employees presently contained in Chapter 2, Article VIII, Division 7 of the City Code; and WHEREAS, the primary differences between the existing system of collective bargaining contained in the City Code and the system of collective bargaining that would be established by the Charter Amendment are: (1) any contract issues that could not be resolved by negotiation would be submitted to arbitration and the City would be bound by the decision of the arbitrator; (2) the collective bargaining agreement reached by the City and the bargaining unit under the existing system could be reopened by the bargaining agent; (3) the current compensation and benefits of the members of the bargaining unit could never be reduced without the consent of the bargaining agent; and; (4) the salaries and benefits of comparable cities around the nation would have to be used for establishing the compensation and benefits of members of the bargaining unit even though only the salaries and benefits of employees in other Colorado Front Range cities and counties are used to establish the compensation and benefits of other City employees; and WHEREAS, the City Council believes that the existing system of collective bargaining contained in the City Code is workable and acceptable because it allows for good faith negotiations without depriving the City Council and the City Manager of the authority to resolve impasses and to make decisions about employee compensation and benefits that are in the overall best interests of the City, given the competing financial needs of the City and its residents; and WHEREAS,through negotiations in 2005,under the existing system of collective bargaining, police employees successfully negotiated an agreement with the City that was acceptable to both parties for 2007; and WHEREAS, the Council believes that the system of collective bargaining proposed by the Charter Amendment would not be in the best interests of the City,primarily because it would allow impasses to be resolved by a third party arbitrator whose duties and responsibilities would be limited to resolution of the contract issues and who would not share the same responsibilities as the City's elected and appointed officials for balancing the needs of police employees with all other important financial needs of the City; and WHEREAS, because such system would not allow for any reduction in any of the benefits of employment currently extended to the members of the bargaining unit, the City would be unable to effectively manage and contain the escalating costs of employee benefits by making changes as may be necessary for this particular group of employees, even when those adjustments were made for all other City employees; and WHEREAS, because the City Council believes that the existing system of collective bargaining adequately protects the interests of police employees and because the proposed system of collective bargaining would impede the ability of the City Council and City Manager to balance the needs ofpolice employees with all other needs and interests of the City,the City Council strongly believes that the ballot measure is contrary to the interests of the City. NOW,THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF FORT COLLINS, that the Council hereby expresses its strong opposition to the Charter Amendment and encourages the voters of the City to vote against this ballot measure. Passed and adopted at an adjourned meeting of the Council of the City of Fort Collins this 13th day of June, A.D. 2006. Mayor ATTEST: City Clerk