After nearly three years of talk, three more hours of talk at San Diego City Hall today on the stalled city outsourcing program led to more talk.

City Council sent Mayor Jerry Sanders and his team back to the bargaining table to break the deadlock between the Mayor’s Office and the two affected labor unions. Council now can set conditions for future talks, and it emerged from an hour-long closed session with its negotiators and attorneys with no public comment Tuesday night.

The city now will follow a new process outlined by City Attorney Jan Goldsmith on how to break labor impasses that swings power from the mayor to the City Council. It forces a city team to go back to negotiate with the city’s white- and blue-collar unions. The question, addressed here, is how if at all the Mayor’s Office will continue to be part of the process.

Tuesday’s deadlock was over the guide for the outsourcing program, known as “managed competition,” that would allow the private sector to compete with city workers for public services. The guide sets the ground rules for how that process would work, for example if the city’s health care costs factor into the competition.

Health care looked to be one of the deciding factors for council to reject the mayor’s offer on Tuesday afternoon. Labor groups argued that health care costs should be removed from bid comparisons between private companies and city workers. The rationale is that contractors shouldn’t win city services by denying or reducing worker benefits. Like the majority of the other issues at impasse Tuesday the Mayor’s Office — and a previous City Council — had agreed to those concessions last summer.

But that came before a labor law ruling tossed those previous agreements.

Council wasn’t convinced that the mayor should have changed his mind as a result, and Council President Ben Hueso didn’t want to be accused of the same thing.

“I’m not flip-flopping,” Hueso said.

Councilwoman Sherri Lightner called some of the mayor’s proposals “not fair.” Councilwoman Marti Emerald echoed that opinion.

“I think we should roll back the clock at least to July of ’08 when the previous City Council approved many of the conditions that are being disputed tonight,” Emerald said. “I look forward to going back into closed session. I hope the negotiating team has gotten the message that this isn’t just about saving money, it’s about honoring the workforce.”

Earlier in the day at a press conference, Sanders was asked why he changed his mind on the health care issue. He invoked last summer’s labor ruling and that his agreement on health care hadn’t been part of prior labor negotiations.

“Once [a judge] ruled none of this was valid, then I think it’s perfectly legitimate for us to say we’re sorry we’re going to renegotiate this whole thing, and that had not been part of the negotiations,” Sanders said. “Secondly, the labor policy right now where whenever we outsource anything the living wage that has a kicker in it for health care so that’s already been built into that.”

City staff repeated this argument later in the hearing.

Hueso wasn’t having it. He noted a point made by MEA earlier in the meeting, that the union had offered to follow San Diego County’s outsourcing rules but city staff rejected that idea.

“It’s kind of a sad testament to the fact that yes we do pay our employees less, yes they do have less benefits than the county employees and to go a step further to create savings … we would have to forego providing health care to our employees.”

Council voted 6-2 to send the mayor back to the table. Councilmen Carl DeMaio and Kevin Faulconer, council’s two strongest proponents of managed competition, voted against the measure.

— LIAM DILLON

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