Most of the city’s union leaders gathered in front of City Hall Wednesday to present a united front.
If the city wants the savings that come with a five-year labor deal, it will have to increase staffers’ pay by 14.5 percent to restore the cuts of years past, they said.
The press conference followed weeks of negotiations between city and union leaders.
Mayor Bob Filner and City Council members have publicly said they’d favor five-year labor deals, which would trim $25.2 million from the city’s pension bill next year and more than $140 million over the course of such a pact. The savings would come from a formal commitment to freeze staffers’ pensionable pay, which allows the city’s pension system to assume reduced pension payouts in coming years.
But the unions say those talks are stalled by a lack of acceptable proposals from the city.
The San Diego Municipal Employees Association, the city’s largest union, posted an update to members on Wednesday that described the city’s latest offer to increase staffers’ non-pensionable pay by 6 percent over five years. Otherwise, the group wrote, they’d have to settle for a one-year pact without increases.
Later Wednesday, the Municipal Employees Association stood with the city’s fire, police, deputy city attorney and Teamsters unions to demand something more substantial that they called a balanced approach. (The city’s blue-collar union did not attend.)
“This proposal keeps either balanced budgets or surpluses into the future in the city by freezing pensionable pay for five more years,” said Michael Zucchet, general manager of the Municipal Employees Association as he stood before a crush of reporters and city staffers.
Here are the major takeaways from that press conference.
A five-year deal looks increasingly unlikely.
Last week, council members tentatively supported the idea of a five-year pact as they discussed the mayor’s first budget proposal.
Council President Todd Gloria described it as a “no-brainer” while conservative council members, including Kevin Faulconer and Scott Sherman, were more reserved.
They wanted a long-term deal but it has to be the right deal, they said.
Faulconer said he’s against salary hikes that “the city can’t afford.”
In a press release after the Wednesday gathering, Faulconer said the city can’t afford “double-digit, across-the-board government pay increases.”
But that’s what the unions want. They decided to share that with the masses on Wednesday to persuade the city to change its position.
“Until the city moves, we’re making our position clear,” Zucchet said.
The unions argue the city could increase staffers’ non-pensionable pay by 14.5 percent and spend an extra $150 million on street and infrastructure repair, and still see budget surpluses in all but one of the next five years.
It’s unclear whether that’s correct. Zucchet said the unions relied on the city’s updated five-year outlook to predict potential surpluses. The Mayor’s office did not immediately confirm the unions’ numbers.
What the unions want wouldn’t come cheap.
Union leaders’ latest proposal calls for a nearly $175 million increase in non-pensionable compensation over five years.
Police and firefighters would get a 2 percent increase next year; other city staffers would see a 1 percent hike. By the end of the five-years, all staffers would see a 14.5 percent raise.
Those increases are larger than the projected savings associated with five-year labor deals.
A report provided by the city’s pension system predicts a $140.6 million decrease in the city’s pension bills over the next five years. The city’s operating fund foots the majority of the bill and would see roughly $109 million in savings over that period.
The non-pensionable pay increase the unions want would overshadow those savings.
Still, the unions argue the five-year deals would offset the burden of any raises. They also point to large surpluses expected in the city’s day-to-day budget in 2017 and 2018. Those surpluses grow with five-year deals, the unions say.
But the math is clear. The unions’ five-year proposal comes with a price tag.
A conversation is in order: When do raises make sense?
City staffers haven’t received across-the-board raises in years.
The last one came in 2008, when then-Mayor Jerry Sanders increased police pay because he said it was necessary to recruit and retain officers. Other city staffers have gone far longer without pay hikes.
A memo from the city’s independent budget analyst showed about half of city staffers have received raises due to promotions or previously agreed upon increases based on qualification or the amount of time they spent on the job.
But not everyone has benefited and simply increasing staffers’ compensation by 6 percent, as the city’s latest proposal apparently suggests, would only restore their pay to 2009 levels. That year, city employees took a 6 percent cut in pay and benefits. Staffers have also seen pensionable pay freezes.
The unions’ proposal unveiled Wednesday would gradually restore pay to 2009 levels by fiscal year 2016 and add non-pensionable cost-of-living increases of about 1.7 percent a year, on average.
Council members must weigh several variables, including economic forecasts, as they consider raises but if they choose not to increase employee compensation this year it may raise a new question: The city appears to have weathered the worst of its financial troubles, so when should staffers benefit?
Lisa Halverstadt is a reporter at Voice of San Diego. Know of something she should check out? You can contact her directly at lisa.halverstadt@voiceofsandiego.org or 619.325.0528.
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