Davis City Employees Association rejects proposed health, retirement cuts

The Davis City Employees Association (DCEA) hasn’t received a salary raise since 2009, and simultaneously rejected retirement and healthcare cuts proposed by the City of Davis. During the Nov. 19 Davis City Council meeting, the City of Davis voted for the second time in two years to pass on the issue. As a result, the DCEA reports no longer having sufficient incentive to pursue further negotiation.

In 2009, all city bargaining units were due to renew their agreements with the city, with respect to salary raises, healthcare and retiree benefits. The city proposed that city units pay their own CalPERS contribution (seven percent of annual income) and reduce monthly cash out to $500, in exchange for a 12.5 percent salary increase over several years.

Most of the groups agreed, with the exception of DCEA representatives. Arguing that their constituents would still suffer from decreased income following the proceedings, they didn’t agree to the proposal and consequently haven’t received any scheduled raises. This is along with the addition of the CalPERS payment.

The DCEA represents City of Davis employees in jobs such as public works maintenance, water systems, custodial, park and road maintenance, electrician and mechanic.

Dave Owen, president of the DCEA, said that there is nothing left to gain and the DCEA only stands to lose more retirement benefits and health cash out.

“They’ve stripped everything out of our benefits that they wanted. The only thing they didn’t get was the only thing they couldn’t take, which is retiree/medical benefits,” Owen said. “They said they’re constrained financially and that their hands are tied in terms of what they can do for us financially with raises to offset the fees.”

 “Me Too” clauses hinder negotiations

Approximately $1.2 million will be paid to make DCEA whole for the legal proceedings and city’s initial rebuff in 2012. The total reparations made were $2.46 million, with the rest going to other bargaining units included in the Favored Nations clauses. Under the Favored Nations clauses, commonly known as “Me Too” clauses, if a bargaining unit receives a good deal, the other units can upgrade their benefits to the same level.

With the clauses, there is an incentive to piggyback on other unrelated bargaining units. The City of Davis defended the “Me Too” clauses as a way to remain equitable and avoid penalizing groups for cooperating earlier.

Ken Akins, the attorney for DCEA, held a strong position against the “Me Too” clauses.

“I’ve been doing this for 40 years, and I can tell you that … ‘Me Too’ Clauses … are repugnant,” Akins said.

Up to the first imposition in November 2012, city managers were the city negotiators.

“Previously from whoever was the negotiator or city manager, at least you could get a straight answer,” Owen said. “During the second round of negotiations when we asked [city representatives from a private firm] for a figure of how much they were trying to save, we got a ‘Dave, it’s complicated.’”

There was no mention of “Me Too” clauses in the first round of negotiations. When the private law firm Renne, Sloan, Holtzman & Sakai was brought in to represent the city, so came up the “Me Too” clauses.

An administrative law judge determined that the city had acted illegally in 2012, when it attempted to move past negotiations before fact finding was complete. To procure the $1.2 million in funds needed to make reparations, nine Public Works employees were indefinitely laid off.

Strain on DCEA will increase as their workforce is reduced while city infrastructure expands, leading to reliance on contractors. Owens is against contracting out labor.

“The Davis community is going to have to come to a decision soon about what the ‘Davis way’ means. Do you stay the course and be a place that treats your employees decently, or are you going to … do things as cheaply as possible and let the chips fall where they may?” Owens said. “You can already see in the parks which have been serviced by contractors that the service levels have dropped.”

 Healthcare cuts

With respect to healthcare, the City of Davis seeks to decrease the cash out pay for employee health plans from approximately $1,900 to $500 monthly. New DCEA employees would immediately take the cut, while those with seniority would decrease their cash-out in increments over four years.

Essentially, cash-out is money offered to city employees every month to buy health insurance. The issue is that the cash out has been a significant source of income for public works employees, and cutting it could lead up to a 25 percent reduction in income.

The city proposed to raise salaries while cutting back on health benefits and retirement. The city defends its decision as financially responsible, while the DCEA argues that Davis is more financially healthy than most cities and was jumping on the recession bandwagon to make cuts when everybody else was.

During the Nov. 19 council meeting, Councilmember Brett Lee noted the contrast between the current state of affairs and the legislation in place.

“In the boom times … we were able to give raises and increase benefits, staffing and services. Sadly we’re no longer in that situation, so there’s a balancing act because we want to make sure the city is around and financially viable 20, 30 years from now,” Lee said.

Mayor Joe Krovoza emphasized fiscal sustainability at the city  council meeting.

“In general, we’ve been increasing take-home pay to employees while trying to reduce city spending, such as long-term healthcare…to ensure that jobs and benefits are as predictable as possible for as long as possible,” Krovoza said. “While I’m going to vote [to impose], I want to make it clear that the city wants to move forward in negotiations … I do not like being in this situation of having people be on this roller coaster, we want predictable benefits and pay.”