Negotiating teams for the City of San Antonio and San Antonio Police Officers Association sat down at the same table and traded proposals Tuesday in the first collective bargaining session held since mid-June.
In sharp contrast to the tense mood of talks that broke down in June, the atmosphere in the City Council B Session room was decidedly relaxed at the start and finish of the morning session, which lasted two hours, including a 30-minute timeout when both sides stepped out to caucus. Negotiators agreed to two more meetings, the first next Tuesday, Sept. 30, and a second the following Tuesday, Oct. 7.
The City and police union, however, remain far apart in terms of reaching agreement on a new contract. The City wants to reduce the cost of health care benefits for police as well as firefighters, who have not yet come to the negotiating table, from more than $14,000 a year per uniform employee to $10,000. The police union has for the first time on Tuesday signaled its willingness to have its members contribute to the cost of health care coverage, but union leaders also want a five-year schedule of pay increase to offset those cuts.
The police union wants a five-year contract to replace the one that expires on Sept. 30. The City, in turn, has proposed a three-year contract. Given the City’s stated determination to hold public safety costs at 66.5% of the general budget, that leaves the two sides tens of millions of dollars apart over the course of a new contract.
Still, the two sides are meeting and talking, and at least on Tuesday, the atmosphere was conciliatory.
The City’s negotiating team had a different look this session, with Deputy City Manager Erik Walsh and former City Attorney Michael Bernard taking seats alongside outside co-counsel Jeff Londa of Houston, Bettye Lynn of Fort Worth and First City Attorney Martha Sepeda. Londa led the negotiations, as in the past, but seemed to adopt a less pugnacious and more amicable approach. No one else on the City’s team spoke Tuesday.
Bernard later said he was hired by the City in August to serve as co-counsel, a move which went unannounced at the time.
The perception among City Hall watchers is that Mayor Ivy Taylor initiated the hiring of Bernard, who left his position as City Attorney after eight years last October to become a partner in the San Antonio office of Bracewell & Giuliani. Bernard’s hiring, sources said, was a way of defusing the tension between union leaders and city staff. City Manager Sheryl Sculley led the City’s effort to bring rapidly increasing health care benefits costs for police and firefighters under control, and as a result, became the target of intense union animosity after she won support from former Mayor Julián Castro and City Council.
Adding Walsh and Bernard to the team, observers on both sides of the talks said in off-the-record remarks, moves the attention away from personal animosities and refocuses attention on contract issues. Whether a face-saving effort that brings the police union back to talks will lead to a deal remains to be seen in the coming weeks.
The two sides differ markedly by their own admission. Londa has repeatedly cited the need for the City to reduce costs and save millions. Georgetown attorney Ron DeLord, the lead negotiator for the police union, said his side’s objective is to help the city get control of union health care costs while also protecting the hard-earned gains the police union has won over 38 years of collective bargaining.
The session began with Londa formally presenting what he called the City’s “July 10 alternative plan” that was sent to the police union informally as summer ended and formal talks had reached impasse in June. At the time, the police union did not respond to the City’s overture, insisting that negotiators first retract statements that union members could be unilaterally placed on the less generous civilian health care plan if they didn’t agree to a new contract.
The July 10 plan would cost the City an estimated $10,000 per uniformed officer, well under the $14,500 currently being spent, but well above the $7,300 the City spends on benefits for each civilian employee.
Londa said the City spent $29.5 million on police health care in 2013 and would spend $35.3 million this year. The goal, he said, was to reduce that number to $23 million. That would require union members to start paying monthly premiums, standard co-pays for office visits and prescriptions, and a greater share of out-of-pocket costs for themselves and their dependents.
Those numbers balloon to $51.4 million for 2013 and $58.6 million in 2014 when the health care costs for firefighters are added.
DeLord then opened the presentation by the union.
“We are committed to moving expeditiously, and if things fall in place, we can get a new contract,” DeLord said. “If we can’t, we can’t.”
DeLord asked Randy McGraw, the union’s El Paso-based benefits expert, to present SAPOA’s new plan. McGraw said the union was setting aside its two previous proposals, both rejected by the City, that called for creation of a trust fund that the City would fund with an annual $32 million contribution, allowing the police union to self-manage its health care plan.
The union’s new proposal offered three levels of coverage for its members, a Legacy Plan similar to the current level of benefits with very modest premiums and co-pays, a Value Plan with higher deductibles and co-pays and lesser premiums, and a Consumer-Driven Plan with higher deductibles, out-of-pocket costs and no premiums. The union plan caps annual payroll deductions to fund the plan at 7% annually, and estimates that the plan would save the City $35 million by 2019.
“If this plan were adopted, what do you estimate the total costs to the City would be?” Londa asked McGraw.
“If you’re talking contributions to the plan it would come close to $29 million,” McGraw said, or about what the City spent in 2013.
The two sides briefly discussed the implications of the so-called Cadillac Tax that takes effect in 2018 as part of the Affordable Care Act, a 40% excise tax the government will impose on the City for any benefits it provides that are deemed excessive. The tax is designed to slow the fast-rising cost of health care and stop recipients of benefit-rich plans from overspending on health care because they do not bear any of the costs themselves.
“The (police union) would be willing to agree to some mechanism to address the situation..and avoid the Cadillac tax,” McGraw said. “We recognize that’s an issue.”
The talks then turned to police pay.
The union plan calls for a 4% base pay increase on Jan. 1, 2015, a base pay increase of 3.5% on Oct. 1, 2016 and 3% increases on Oct. 1, 2017, 2018, and 2019. The union proposal shows its health care proposal saving the City $6.2 million over nine months in fiscal year 2015 with a corresponding $6.2 million increase in police payroll offsetting those savings. That, DeLord said, would hold the City’s current public safety spending to less than 67% of the general budget.
“You’re basically saying payroll increases wipe out any proposed healthcare savings,” Londa said.
“Our goal was to get our health care plan to look more like other health care plans, that in itself will produce savings,” DeLord said. “But we are trying to put those savings into a pay raise. We didn’t start with the premise that we should take money out of police paychecks give it to the City to spend on other things.”
DeLord said of the City’s July 10 plan, “The $10,000 is a made-up number.”
He said San Antonio’s unions had bargained with the City “for a very, very long time, 38 years,” much longer than such contract negotiations in other Texas cities, and that members expect to retain the hard-earned compensation won in those talks.
Londa observed that the two sides disagreed on their respective interpretation of the numbers in the union proposal, and would have to address those differences in the coming meetings. The two sides left the table with an exchange of civilities. Afterwards, however, DeLord looked on as Londa stood amid a huddle of television cameras and described the union proposal as untenable.
*Featured/top image: The San Antonio Police Officers Association negotiating team, including benefits expert Randy McGraw (center, left) and attorney and lead negotiator Ron DeLord (far right). Photo by Robert Rivard.
See all stories related to the current contract negotiations here.