The growing tension between public safety employees and city leaders over wages and benefits was clear Tuesday as the San Luis Obispo City Council discussed whether to seek voter approval on how those are decided.
Council members voted 4-1 to ask local voters whether to repeal a controversial part of the city charter that brings in a third-party arbiter to intervene and decide wages and benefits if labor contract talks stall.
They then voted 4-1 to ask local voters whether to remove a city charter section that requires voter approval to reduce retirement benefits. Councilman John Ashbaugh dissented on both.
The council agreed to put both issues before city voters by mail-in ballot Aug. 30.
Councilman Andrew Carter’s calls for a discussion about changing or repealing binding arbitration and pension reform — with the support of newly elected Councilman Dan Carpenter and Councilwoman Kathy Smith — prompted Tuesday’s special meeting where these votes took place.
Carter has said the urgency is dictated by the fact that nearly all employee contracts expire at year’s end.
Binding arbitration refers to a mandate in the city charter that local voters approved in 2000, which entitles the unions for public safety employees to turn to a third-party arbiter if labor negotiations reach an impasse. The charter requires the city to abide by that referee’s decision.
In June 2008, an arbiter gave sworn police officers a 30 percent raise and increased dispatchers’ and other non-sworn police staff’s pay by 37 percent over a four-year contract.
Since that ruling, some local civic and business leaders have complained that the mandate has stripped the council of its budget authority and threatened financial ruin for the city.
City-employee unions say arbitration is fair because they can’t go on strike.
The debate mirrors what is taking place across the nation as governments search for ways to cut costs, while employee unions argue they have given enough.
At Tuesday’s meeting, to more visibly show their numbers, police union members and their supporters wore blue T-shirts, while firefighter union members and their backers dressed in red T-shirts.
At the moment council members voted to let city voters decide on the charter’s binding arbitration provision, the union representatives walked out of the meeting.
All but a few of the about three dozen who addressed the council from the audience of more than 150 favored putting both issues before local voters.
“The public deserves to have the right to review if what they bought is what they were being sold,” former Councilman Paul Brown said.
San Luis Obispo Fire Department Capt. Ray Hais countered that after the 2008 arbiter’s decision, the council never decided to put it on the ballot, and no citizen-led initiative drive had sprung up either.
“It’s created a divisive split within the city, dividing management and labor,” he said.
In addition to repealing or changing the binding-arbitration process, city leaders are also looking at pension reform as a way to cut costs as revenue declines.
This comes as the city’s anticipated $54 million of expenses for fiscal year 2011-12 — which starts July 1 — exceed revenue by roughly $3 million.
The city’s pension obligation accounts for 16 percent of the city’s operating budget. That number is expected to grow to 20 percent in the next five years.
Money to cover those growing costs would have to come from the city’s general fund — which pays for services such as road paving, tree trimming and maintaining city’s parks.
The proposed pension reform could include a two-tier pension system, in which new employees would receive less-generous pension benefits than current workers, whose benefits would remain the same. Or, new employees would have to contribute more toward their own retirement, reducing the amount taxpayers subsidize.