It might take a financial referee or two to sort out the accounting differences and assumptions that separate health care consultants who locked horns in the latest round of collective bargaining talks between the City of San Antonio and the San Antonio Police Officers Association.
Yet another bargaining session ended Monday without much progress because of each side’s mutual distrust of the other’s numbers and what they add up to over the life of a proposed three-year or four-year contract. City negotiators challenged their union counterparts to submit the union financial tables to independent actuaries, as they say is routinely done with all City financials.
The police union’s lawyer Ron DeLord called a brief recess and returned to the table with an offer to jointly hire an actuary to test each side’s numbers. The city’s lead lawyer Jeff Londa said the City would respond to that proposal in the coming days.
No date was set to meet again, although both sides agreed that could happen soon once they resolve whether to bring in actuarial experts to sift through the numbers and see if they can be reconciled.
It won’t be easy. The City’s negotiating team is operating under the assumption that public safety spending has been capped at 66% of the General Budget by City Council, and Londa has said that number is not negotiable. The police union’s negotiating team believes the City’s growing revenue base justifies giving the unions a new contract that includes some health care cuts and other concessions in return for generous wage increases.
Negotiations between the two sides began in April in anticipation of the existing five-year current contract expiring on Sept. 30. That date came and went without an agreement, and while both sides say a deal is possible this year, it’s looking less likely. The firefighters union, operating on the same expiration date for its five-year contract, has ignored the City’s repeated invitations to start collective bargaining talks.
The impediment to good faith bargaining and reaching a new agreement, say City negotiators, is the highly unusual 10-year “evergreen clause” embedded in both the police and firefighter union contracts, meaning the wage and benefits remain in effect after a contract expires for up to 10 years. Most municipal-union contracts have evergreen clauses that extend for 30-90 days and thus serve as an inducement for unions to bargain in good faith.
Union lawyer Ron DeLord offered to reduce that 10-year term to four years in a new contract, but the City team remains adamant about eliminating it or modifying it to a short-term bridge to the next contract.
“If a court makes a ruling on evergreen when we are in the middle of the new contract than we will agree to make a change in the contract to comply,” DeLord said, suggesting the union believes the City might seek legal relief on the matter if it can’t win agreement at the bargaining table.
Londa said afterwards that the City does not believe the evergreen clause would stand a legal test.
“The clause is not constitutional,” Londa said. “It’s a deterrent to the unions reaching a new agreement because they have no incentive to bargain in good faith.”
Police union President Mike Halle said the City’s unwillingness to budge from the 66% figure, which assumes $10,900 a year in health care spending on each union member, makes it more difficult to reach a compromise.
“It’s difficult to negotiate this way and that’s one of the reasons why we have a long evergreen,” Halle said.
A Note of Optimism
The session began Monday with an unexpected sense of progress as the union team put forward a proposal with new health care numbers and a significant concession, agreeing to a three-year phaseout of the City’s $1 million-plus annual contribution to a union fund that members use to pay personal criminal and civil legal expenses. The union has not disclosed how much money is in the fund or how exactly it has been used.
The police union also dropped its demand for a five-year contract to replace the one that expired on Sept. 30 and said it would agree to a four-year contract. The City has offered a three-year deal. Other less significant issues, such as how long patrol vehicles are kept in service, also seemed on the way toward resolution.
DeLord optimistically concluded the police union’s presentation by noting that 10 contract issue had been resolved, five or six were nearing resolution, and only that number of items remained. A new contract, he suggested, was within “striking distance.”
But the two biggest issues, wages and health care, remain unresolved.
Health Care Costs & Wages
Randy McGraw, the union’s health care consultant, outlined three different health care plans that could be offered to union members. Each one, he asserted, would yield the savings the City is seeking to limit per capita costs to $10,900.
Afterwards, Jason Sanchez, a union financial officer, repeated the union’s proposed wage increases over the life of the four-year contract: 4% in both 2015 and 2016, a 1% increase in 2017, and a 3% increase in 2018. City negotiators have offered a 1.5% bonus in 2015, followed by 1% increases in 2016 and 2017.
The City has consistently rejected union proposals, saying they lacked real savings and that any health care savings would be canceled out by wage increases that would result in increased public safety spending. The union, in turn, has rejected all of the City’s proposals.
“The wages are the biggest issue, the health care costs are the second biggest issue,” Londa said after the meeting.
The City’s team recessed for more than 90 minutes after Monday’s union presentation. Buddy Morris, the City’s health care consultant, said they used the time to share the union proposals by telephone conference with independent actuaries who provided real-time analysis of the numbers.
The conclusion? The City’s team returned to the table to announce the new numbers were not acceptable. Londa said the City appreciated the opportunity to end its annual contribution to the controversial legal fund, but noted that would only yield $2-3 million over the life of a three-year contract, far less than the City is hoping to cut from health care costs that have been rising at double-digit rates for union members while remaining flat for civilian employees, whose coverage only carries a per capita cost of $7,300. The City has said 2014 costs for union members was nearly double at $14,400.
Morris challenged McGraw directly for the first time in talks that began in April, saying the per capita cost of the new union proposal would be $12,200, well over McGraw’s claims they would not exceed $10,900. Morris criticized McGraw and the union for presenting numbers and financial assumptions lacking any actuarial certification. Morris challenged the union team to submit their financial calculations for independent review, as he said the City does with its projections.
“We are highly recommending that you guys get on board with certifying these numbers with us,” Morris said. “You guys are smart guys. You know we can’t go to City Council, we can’t go to the public, with numbers that won’t hold up.”
Londa said the City’s latest proposal, delivered in October, reduced health care costs while giving the union $22.4 million in bonus and wage increases to a three-year contract.
Responding to union complaints that it has put offer after offer on the table, all rejected by the City, Londa said the union’s Sept. 23 proposal in the first three years added $70.7 million in new spending, a $48 million gap. The union’s Oct. 21 proposal, he said, added $80.9 million, a $58.5 million gap. Monday’s proposal he said, added $71.3 million, a $48.8 million gap.
“Wages are a very expensive item,” Londa told DeLord. “I guess the good news is the union has come down from its last proposal to its current proposal. The bad news is that it’s still higher than the proposal the union made on Sept. 23.
“So I hardly think, as the union proposes, that we are within striking distance of a deal,” Londa said.
“I would like to let Buddy and Randy pick a mutually agreeable actuary … we’ll split the cost and, as soon as they can get that done, we’ll come back to the table and we’ll know what the math is,” DeLord said.
“The numbers are the numbers,” Londa said.
“The numbers are what they are,” DeLord responded.
The negotiators used virtually the same words Monday to describe their contrary positions. The four-hour session ended with little agreement or evidence of a deal on the near horizon.
“It’s difficult because we’re not making progress, we’re not moving in a positive direction,” Londa told reporters after the session. Citing the 66% of the general budget mandate and the $10,900 per capita health care ceiling, Londa repeated, “We are not going higher.”
*Featured/top image: From left: Police union health care expert Randy McGraw, SAPOA President Mike Helle, and attorney Ron DeLord listen to the City’s outline of its health care counter offer. Photo by Iris Dimmick.
See all stories related to the current contract negotiations here.