Editorial: Yes for Measures A and B makes most financial sense

Binding arbitration has been used only once in San Luis Obispo, and that one time was disastrous enough. We shouldn’t take the chance on that happening again.

Here’s a refresher course on what occurred in 2008: Police Department salaries went up 30 percent for officers and 37 percent for dispatchers over the course of the four-year contract, when accounting for compounding.

That boosted salaries for San Luis Obispo police officers to among the highest in the state; starting pay for a San Luis Obispo officer rose to $75,000 per year, which at that time was 33 percent more than the entry-level police salary in Los Angeles.

Had the economy prospered, the city perhaps could have lived with that, though sooner or later, escalating wages and pensions were bound to outstrip the city’s ability to pay.

As it turned out, that grace period didn’t last long at all.

The economy tanked, and many cities — certainly not just San Luis Obispo — have been forced to cut staff, put projects on hold, reduce services, raise fees. And, in the process, they’ve re-evaluated whether they can afford to offer generous wages and benefits that, in many cases, are over and above what comparable employees earn in the private sector.

We believe it’s time for every agency — including San Luis Obispo — to take steps to remedy a situation that has already driven some cities to bankruptcy or the brink of bankruptcy.

One of the first steps is to ensure that decision-making power rests where it should — with elected representatives who are accountable to the voters.

For that reason, we strongly urge voting yes on Measure A and Measure B.

Here’s why:

Passage of Measure A would remove a cumbersome requirement in the city charter that mandates that voters approve reductions to employee pensions. Few cities have such a requirement, and why should they?

If the City Council can vote to raise pensions without a vote, why does it require voter approval to reduce them especially since those reductions must be negotiated with employee unions?

This is an unnecessary requirement that ties the city’s hands, even as other agencies adopt the “two-tier” pension system widely acknowledged as an absolute necessity if government agencies are to recover financially.

The city of Santa Maria, for example, adopted a two-tier system that raised the retirement age for newly hired police officers and firefighters from 50 to 55 and increased their pension contributions. Pensions for all other newly hired workers were reduced as well. Instead of earning 2.7 percent of their annual salary — multiplied by their number of years of city service — new nonsafety workers will retire with 2 percent of their salary.

Morro Bay also raised the retirement age for newly hired public safety workers from 50 to 55, and is negotiating to change the pension formula for other new employees.

Similar negotiations are occurring at many other cities in California, yet few of them are required to take the additional time-consuming and expensive step of going to the voters. We don’t believe Sand Luis Obispo should have to, either.

Passage of Measure B would overturn the binding arbitration measure for police and firefighters approved by voters in 2000.

We see two insurmountable flaws with the binding arbitration process.

Winner takes all: The arbiter, or arbitration panel, examines each side’s “last, best and final offer” and chooses between the two. This is not a good solution for either side. Certainly, San Luis Obispo police officers “won” when an arbiter chose their offer over the city’s, but next time, they could be on the losing side.

Next time, the arbiter could decide that the city’s hypothetical offer of, say, 8 percent is completely justified, and the police officers’ hypothetical request of 16 percent is not. It does not have the power to split the difference and grant 12 percent. That’s absurd.

A nonelected, outside arbiter or three-member panel has the final say.

The City Council was elected to make decisions for residents and budgeting is one of the most important of those.

The council is well versed in the needs of the city, not just today, but five, 10, 15 years from now. It is in the best position to make decisions that consider not only the employees and taxpayers who are on the hook for their salaries and benefits, but also the city’s long-term needs for items such as street maintenance, water and sewer improvements, parks and open space, equipment replacement, etc.

We recognize that the arbitration panel is required to consider a city’s financial health and ability to pay. However, judging by what occurred in 2008, it appears the arbiter did not look far enough into the future.

Which brings up another flaw: When an arbiter calls the shots, it’s too easy for the City Council to blame the mess on that person’s decision. As in: “It’s not our fault the streets aren’t being paved that parking fees have been raised that employees have been laid off. It’s the arbiter.”

The buck should stop with the City Council.

If council members make bad decisions — if they allow pay and benefits to drop to the point that morale is low and we can’t retain good employees — they should be booted out at the next election.

Conversely, if the salaries and benefits become so high and out-of-whack that they threaten to bankrupt the city, well, the council members responsible should not be re-elected.

If binding arbitration were a just, reasonable and effective way to resolve labor disputes, we would not be having an election to decide whether to overturn it. Nor would three other California cities already have voted to either dump or alter the process.

Binding arbitration is not just, reasonable or effective for San Luis Obispo.

The Tribune strongly urges a yes vote on Measure A and Measure B.

A closer look at the measures

Measure A

Asks San Luis Obispo voters to amend the city charter to eliminate a requirement that the City Council hold an election to obtain voter approval to terminate its contract with CalPERS or negotiate another contract with reduced employee benefits.

As it is now:

Voter approval is necessary in order for the city to reduce employee retirement benefits for future employees.

How it would change:

San Luis Obispo would continue to contract with CalPERS to provide city employees and retirees with retirement benefits; however, the city could negotiate lower pension benefits for new employees without voter approval.

The retirement benefits and formulas of existing employees would stay the same.

Measure B

Asks San Luis Obispo voters to repeal binding arbitration, which was approved by voters in 2000.

As it is now:

The final authority over disputes arising from police and fire contracts about wages, hours or terms and conditions of employment falls to a three-person arbitration panel.

Each party submits a last offer on each disputed issue to the arbitration board. The board picks either the city’s final offer or the union’s final offer.

After the arbitration decision is reached, the two sides have 10 days to meet privately and attempt to work out a further compromise.

At the end of that period, the arbitration award becomes binding on both parties. No further action by the City Council is allowed.

How it would change:

 Contract disputes between the city and its police and fire unions about wages, hours or terms and conditions of employment would be handled by existing state and local procedures.

 When those procedures have been exhausted, the city may implement its last, best and final offer.

 Police and fire unions would still be able to require the city to discuss issues with them that may impact their wages or benefits before the City Council adopts the annual budget. No third-party arbiter would be available to weigh in.

Dates to remember

Monday: First day ballots will be mailed to residents

Aug. 15: Last day to register to vote

Aug. 30: Election Day; drop-off centers will be open from 7 a.m. to 8 p.m. All ballots must be received by 8 p.m.