City To State: Time To Change Binding Arb Rules

Paul Bass Photo

New Haven’s mayor sent Hartford a message: Yes, we need money. Just as important, we need to revolutionize the way we settle labor disputes.

Mayor John DeStefano (pictured) issued that call Tuesday at a press conference to highlight the city’s agenda for the upcoming state legislative session.

Mostly he reiterated priorities already described to city aldermen at a public briefing two weeks ago. These include preventing cuts in PILOT (Payments In Lieu of Taxes) and ECS (educational cost-sharing) grants (the latter alone could blow a $22 million hole in next year’s city budget), permission for New Haven to use traffic-light cameras to catch intersection-runners, and enacting a levy on bars in concentrated club districts.

On Tuesday, DeStefano also detailed a proposal the city’s pushing this year to change the way cities and unions can settle contract disputes.

The call comes as New Haven is negotiating with 13 unions whose contracts have expired, and two more (police and fire) that expire on June 30. With the city facing a projected $52 million budget gap in the next fiscal year, and therefore seeking dramatic pension and health insurance givebacks, the atmosphere has turned contentious.

Right now, if the two sides can’t agree on terms, the matter may ultimately go to binding arbitration: The city picks an arbitrator. The union picks an arbitrator. They agree together on a third arbitrator.

That system’s broken, DeStefano argued. As a result cities are saddled with expensive pension and health-care plans that risk bankrupting them.

You inevitably get a system that splits the baby and lowers the expectation of any meaningful change,” DeStefano argued.

Any third arbitrator who wants to continue getting hired has to make sure not to offend either side, even if he or she concludes that one side is right, the mayor argued. If an arbitrator were to decide that the city can’t afford to maintain the current pension plan, for instance, unions probably wouldn’t agree to hire him or her the next time around.

To remedy that, DeStefano proposed that the governor appoint an independent panel to choose the neutral third arbitrators — similar to the way the state chooses superior court judges — and give those arbitrators terms rather than select them for one case at a time.

He also recommended that other government unions adopt the same rules that affect police and fire unions. Under law, those unions have to reach a new contract by the time the old one expires.

He pointed to the ongoing dispute over the city’s contract with school custodians. The city wants either to privatize the crew or obtain significant changes in work rules and pensions and health care. The union has mounted an aggressive campaign in response.

We stand here 19 months later still in the process” of negotiation, DeStefano said. That doesn’t make a lot of sense for anybody.”

DeStefano’s proposal didn’t impress Cherlyn Poindexter, president of AFSCME Local 3144, the city management union.

If the mayor wants this it can’t be good for unions,” Poindexter said.

I’m pretty sure there are people who went to arbitration and it worked well for them. In today’s economy, everybody’s against the union. If the economy’s bad, the arbitrator might go against the unions. A lot of the things going on we have no control over.”

New Haven State. Sen. Martin Looney and State Rep. Roland Lemar (at left in photo below) said Tuesday it’s too early to predict how the city’s proposal might fare this session.

Systemic Argument

State Rep. Roland Lemar with Mayor DeStefano

Often government or its unions don’t bother taking a case to arbitration because, given the system’s current limitations, you know you may not win” even if you feel you have a strong argument on your side, DeStefano argued Tuesday. You tend to dumb down.”

During the current budget crisis, government can’t afford to dumb down” or settle for minor changes, DeStefano argued. He pointed to a recent report about how Democratic and Republican governors alike are seeking deep changes in pensions and health care policies. That includes Democrats with historically strong relationships with labor.

Examples of what budget gaps have meant for some other cities: Newark laid off 163 cops, only to see them rehired on overtime to deal with a subsequent shooting spree; Prichard, Alabama, filed for bankruptcy and stopped sending retirees checks; Pittsburgh now faces a state takeover of its pension system.

In New Haven, the city is selling off garages and buildings and probably looking at layoffs and severe budget cuts to tackle the $52 million projected budget gap next year. Pensions and health benefits are the biggest long-term institutionalized budget-busters, DeStefano said. Not only that: The pension systems are running out of money. Without changes, the police and fire retirement funds would run out of money in 15 years, while other city employees’ fund would run out in 16, according to the mayor.

Meanwhile, the average age of the 22 police and fire employees who retired in 2010 was 52. Cops can retire after 20 years; many then take new jobs elsewhere while collecting police pensions. With military service and sick time figured in, some can retire after as few as 15 years, according to DeStefano. Meanwhile, cops and firefighters’ pensions are based on how much money they were paid at the end of their career, including sometimes loads of overtime; not based on their salaries. As a result, 2010’s retirees are collecting $1.6 million combined in annual pensions this year — 95 percent of their combined salaries.

And under current rules, cops receive pensions based on the money they earned in the past year, including overtime, not just their salaries; and top cops can retire at the salary grade for the position above the one they held. For instance, Assistant Chief Ariel Melendez is retiring with a $124,500 annual pension; his current salary is $105,000.

DeStefano said Tuesday that he won’t hire a new assistant chief to replace Melendez until those pension rules change.

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