The firefighters union does not want a panel of arbitrators to require that health care benefits for its membership be managed by a union-operated entity, a union attorney said Thursday.
Carving out firefighter health care from the City of San Antonio’s control into a separate trust was a proposal floated by the union during contract negotiations earlier this year. Such a trust would set its own benefits and premiums for members. The City balked then and this week at the idea.
But the most recent union proposal – currently being vetted by three arbitrators who will decide the final terms of the union’s labor contract with the City – merely calls for an exploratory committee or working group to be established to discuss the possibility of a such a trust in the future, said Richard Poulson, an attorney representing the union.
“The firefighters are not proposing a trust,” Poulson said. “The firefighter proposal is for a working group for parties to explore [establishing one] in good faith.”
But it’s still unclear how the current proposals from either side are worded as they have not been made public; for now, supporting documents from both the City and union are confidential as requested by the panel. Taking photos is not allowed in the conference room.
The union won the right to this binding arbitration process through a hard-fought public vote in November 2018. Under the amended City charter resulting from the vote, the union unilaterally invoked its right to call for the process in July after traditional negotiation sessions and private mediation talks broke down.
The union-proposed committee would not be much different from the City’s proposal to set up a six-member working group – with three City officials and three union representatives – to discuss issues related to health care and other departmental business, Poulson said.
“Couldn’t that [City-proposed] working group consider where it might make sense to set up a health care trust?” he asked.
“That’s not the intent of [the City’s] proposal,” said Lori Steward, the City’s human resources director.
Throughout the three days of arbitration meetings so far, several witnesses for the City have said there’s no motivation for the City to pursue a health care trust option; the only benefit would be for the union to have control. Union officials have said that it would require a $15 million payment from the City to establish the trust.
Deputy City Manager María Villagómez said because the City does not have $15 million to spare for such a trust, it would have to cut other City services budgets or raise revenues.
While the two sides remain tens of millions of dollars apart in terms of wage increases and health care proposals, the two sides seemed to at least agree that more communication and transparency are needed between them.
“Not just when we are negotiating a collective bargaining agreement,” Villagómez said. The City proposed that the six-member group meet quarterly to review health care programs, cost trends, and other fire department issues that affect union members.
Thursday marked the third nonconsecutive day of arbitration meetings during which the City has argued that its proposal is in line with – if not exceeds – deals that firefighters in other Texas cities receive while maintaining the City’s ability to serve taxpayers.
Under a contract that expired in 2014, the City covers the health care premiums for firefighters and their dependents, a primary driver for ballooning costs. In the absence of a replacement contract, a 10-year evergreen clause keeps the basic terms in place until 2024. The City has proposed that the fire union receive essentially the same benefit plan options that the police union agreed to in its 2016 contract that expires in 2021.
One of the fire union’s top critiques of the City during arbitration so far is that officials aren’t doing enough to find the money to meet the needs of its first responders. The union will likely deliver its opening statement and start calling its own witnesses on Monday, sources said.
If the panel adopts the City’s proposal as is, Villagómez said, the cost of the 2.5-year contract to the City would be about $1.6 million more than it’s currently paying over that time. The City estimates it would avoid paying about $23 million in health care costs by implementing two new plan options but spend $24.6 million more in wage increases, she said.
When asked by an arbitrator why the City wants a 2.5-year contract, Villagómez declined to answer, citing advice from the City’s attorney.
The City proposed a one-time signing bonus for members equivalent to 3 percent of base pay and 3 percent wage increases in 2021 and 2022.
The union’s contract would cost roughly $265 million per year under the City’s proposal.
The union proposed a 14 percent wage increase for all members upon signing a one-year contract. That increase, unlike a one-time lump sum, would be carried forward into subsequent years.
The union’s one-year contract proposal would cost an additional $42 million during the first year, Villagoómez said.
“Does the City have sufficient recurring revenue to allow a 14 percent increase without cutting other services to the taxpayers of San Antonio?” the City’s attorney Donna McElroy asked Villagómez.
“No,” she said, adding that the City would have to cut services or raise taxes.
Under the new voter-approved charter language, known as Proposition C, the arbitrator panel may consider a number of factors in its deliberation of the next labor contract, including impact to the City’s budget, taxpayers, hazards of employment, cost of living, and more, Poulson noted.
But some voters were made aware of the potential cuts to services by way of the City’s notice of charter amendment election published in newspapers and online, he said.
That notice said binding arbitration allowed for by Proposition C “could have substantial negative impacts on the City’s budget. … This could force the city of San Antonio to find other revenue sources and/or reduce public services to meet the legal requirement of a balanced budget.”
While members of the City Council are elected by voters, Poulson said, “there are other ways that voters can weigh in and let us know their intention. … After considering the [notice] by the City, voters approved it.”
However, it’s unclear how many voters read the City’s notice.
The arbitration panel also heard from Noel Horan, a 40-year veteran of the San Antonio Fire Department, who now serves as a senior special project manager in the support services division of the fire chief’s office. The City called Horan to testify about the health and wellness efforts the City has funded throughout the years.
Horan said the City’s proposed changes to the department’s drug testing and disciplinary policies would benefit firefighters and the City.
Currently, firefighters are given a five-day warning ahead of random drug tests and union members can’t be disciplined for various infractions after 180 days. Under changes the City proposes, firefighters would receive no notice of random testing. Furthermore, because bad behavior sometimes isn’t reported to the chief or revealed right away, discipline would be barred after 180 days once the fire chief is made aware of or should have been aware of any infraction.
The arbitration period will last 20 days with optional extensions if needed, City attorneys have said. Meetings are currently scheduled nearly every day through Tuesday, Dec. 17. The panel has the authority to take as much time as it needs to craft a binding contract while taking both sides’ proposals into consideration.
The panel is made up of local attorney Phil Pfeiffer, who was selected by the City; Portland, Oregon, labor attorney Michael Tedesco, picked by the San Antonio Professional Firefighters Association; and retired Judge John J. Specia Jr., whom Pfeiffer and Tedesco selected.
