City Lawsuit vs. Unions Gets First Court Hearing

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Judge Martha Tanner listens to city attorney Michael Bernard in a lawsuit hearing regarding the evergreen clause in the City's collective bargaining agreements on Tuesday, Nov. 10, 2015. Photo by Edmond Ortiz

State District Judge Martha Tanner presided over the first hearing in the City of San Antonio’s lawsuit challenging the 10-year evergreen clause long embedded in its collective bargaining agreements with the San Antonio Police Officers Association and the San Antonio Firefighters Association.

The City filed the lawsuit in November 2014, but a hearing was not scheduled until the the police union broke off talks with the City in late September, ending 19 months of on-again, off-again contract negotiations. The firefighters union never agreed to bargain with the City, even though the last five-year contract for the police and fire unions expired on Sept. 30, 2014.

The City’s lawsuit challenges the constitutionality of the evergreen clause, which keeps in place current contract terms, maintains longevity and Step increases until 2024 or until a new collective bargaining agreement is reached. City officials say the unusual longevity of the clause is a disincentive for union officials to bargain in good faith. Union officials counter that previous several generations of City leaders have agreed to the 10-year clause, which they see as protection against having to accept a bad contract.

Tuesday’s hearing centered on the City’s lawsuit against the firefighters union. A second hearing for the City and police union is scheduled for Nov. 17.

Former City Attorney Michael Bernard addresses reporters  lawsuit hearing on Tuesday, Nov. 10, 2015. Photo by Edmond Ortiz

Former City Attorney Michael Bernard talks to reporter after the hearing. Photo by Edmond Ortiz

Former City Attorney Michael Bernard presented the City’s arguments and asked Judge Tanner for a summary judgment ruling. Tanner rendered no decision Tuesday, but indicated she would review the pleadings and documents over the next week and then rule on the motion. If she denies the City’s motion, a trial date is expected to be set for some time in 2016. If she rules in favor of the City, attorneys for the police union are expected to appeal.

Meanwhile, the City continues to cover rising health care costs for union members, who are not receiving wage increases after union officials rejected the City’s last wage and benefits offer in September. Under the current contract, union members and dependents do not pay monthly premiums and contribute only small co-pays, while the City’s civilian workers pay premiums for themselves and their dependents and pay higher co-pays for physician consults, prescriptions and hospital stays.

Bernard said it’s an unreasonable burden on the City and taxpayers to absorb spiraling health care costs while union members have no incentive to help control those costs and do not contribute to their own health care. Health care programs paid for exclusively by employers are a thing of the past in most instances, and City officials say they have no accurate way to budget health care costs that are rising far faster than inflation or growth in the City’s general budget.

“Unknown costs being paid out of scheduled general (budget) funds creates an unscheduled debt,” Bernard told Judge Tanner.

Bernard also said the current contract has no language subjecting evergreen clause funding to annual appropriations scheduled by the City, therefore the City is bound to honor that obligation. The only recourse would be a summary judgment.

The unions have argued that the City has sufficient revenues to cover employee health costs.

“We do have the assets, but there’s no way to tell we will in 2018 or 2019,” Bernard said. “It’s not a question of solvency, but of debt.”

Bernard also said the City has multi-year contracts with language providing direction to the City Council on how to appropriate funds year after year. That is not the case with the union contracts, he said.

Citing one of many similar cases from around Texas, Bernard said nobody can tie up “a municipality’s hands perpetually” on a contract, and that it is essentially a violation of public policy.

Attorney Ricky Poole, representing the firefighters union Local 624, said the City is asking Judge Tanner to rule as unconstitutional contract language  that the City agreed to when officials signed the last five-year contract with the firefighters in 2009. The existing evergreen clause, he added, has been part of the  firefighters’ contract since 1986.

Attorney Ricky Poole, representing the San Antonio Professional Firefighters Association, addresses reporters following a lawsuit hearing on Tuesday, Nov. 10, 2015. Photo by Edmond Ortiz

Attorney Ricky Poole, representing the San Antonio Professional Firefighters Association, talks to reporters after the hearing. Photo by Edmond Ortiz.

Poole noted that no appellate court in Texas has ever upheld any collective bargaining agreement as a debt creator or unconstitutional for the governmental entity involved.

Poole frequently cited testimony given in a deposition by Assistant City Manager and former Budget Director Maria Villagomez. Poole said that employee health care costs accounted for only 1% of the city’s consolidated budget. Bernard later disputed that, saying the general fund budget that handles daily city operations, is the more pertinent scope of focus and, therefore, health costs make up a larger percentage than that.

Poole also claimed the City has argued that a sinking fund and tax would be needed in theory to pay for what it now sees as a debt — the funds being paid out during the evergreen clause period.

According to Poole, San Antonio is on the verge of not having its firefighters signed up on a collective bargaining agreement for the first time in 40 years, and that could set a troubling legal precedent statewide and perhaps beyond.

“That would go against legislative policy, intent in legislation, which says public employees have a right to collectively bargain,” Poole said. He added that such a right in Texas is vital because public employees cannot go on strike.

Poole and Bernard also exchanged legal arguments about how the City has handled the expiration of both union contracts through the annual fiscal year budget process. The City deferred funding some street maintenance in fiscal year 2015 to support continued costs for police officers and firefighters. Bernard said the City has had to “cut” back on other services to cover the added health care costs.

Poole said the City instead found a way, in budgeting, to take care of firefighters after the contracts had lapsed. He added if the City wants recourse – theoretically – it could decrease firefighting staffing levels but instead is increasing it to keep up with city growth.

The police union is due to have a similar hearing on Nov. 17. In that case, both sides have filed summary judgment motions.

“We don’t believe the contract is unconstitutional,” Poole told reporters after the hearing. “The City has never treated this contract as a debt. Despite the City Attorney stating it’s not a debt, the City is here today to argue it’s a debt.”

“The state Supreme Court has ruled that any financial obligation created by a contract is a debt, and you handle a debt in one of several ways,” Bernard said. “You pay for it up front, in which case you don’t have a constitutional problem, or you create what’s called a sinking fund, a tax that’s dedicated to pay that debt, or the contract is void.”

 

 *Top image: Judge Martha Tanner listens to former City Attorney Michael Bernard’s presentation on behalf of the City. Photo by Edmond Ortiz.

Related Stories:

Read all the stories on the City and police union negotiations in the Rivard report archive.

Evergreen Clause Lawsuit Debated as Courtroom Date Looms

City Moves Forward With Police Union Contract Lawsuit

Police Union: Drop Lawsuit or Negotiations are Dead

City Makes New Offer, But Union Officials Stay Away

7 thoughts on “City Lawsuit vs. Unions Gets First Court Hearing

  1. I find it almost comical that the City argues that their then City Attorney, Michael Bernard, signed an unconstitutional contract with the Fire Association.
    Now, 6 years later, they hire back the SAME attorney to argue that he signed an unconstitutional contract and it should be voided… If he did that bad of a job back then, why does he deserve to be paid taxpayer’s dollars a second time?

  2. Perhaps he and the city officials who previously agreed to the clause did not anticipate that the police/fire unions would so significantly abuse it in bad faith.

  3. I find it almost comical that the City argues that their then City Attorney, Michael Bernard, signed an unconstitutional contract with the Fire Association.
    Now, 6 years later, they hire back the SAME attorney to argue that he signed an unconstitutional contract and it should be voided… If he did that bad of a job back then, why does he deserve to be paid taxpayer’s dollars a second time?

  4. I appreciate that your response started with the word “perhaps”. This implies that you believe your opinion is subject to modification if you had more information on your theory. Information contained in L624’s court submittals shows that in 2005, the city was not ready to start negotiations until after the previous contract expired, which resulted in a contract being agreed to almost 20 months later. In 2009, the city was not ready to sit down at the table until they and L624 were already three months into Evergreen, and that resulted in a contract almost 21 months later. Back in the early 1990s, the Firefighters Association went without a contract for almost 3 years on a different set of issues.
    The purpose of the Evergreen is to allow time to negotiate a fair contract for both parties correctly on the first try, while also recognizing the fact that public safety unions do not have the ability to strike to get their point across. The reality for the Fire Association is that they have been unfairly under attack by the city administration since August 2013 when the city manager initiated her Legacy Cost Task Force proceedings in an effort to create artificial leverage for negotiations against both public safety unions. Even the chair of that task force, Reed Williams, stated before City Council in his opening statement on the task force report that all the assumptions in the report should be thrown out. To complicate matters, the city has to date refused to provide open records request information specific to health care costs and personnel costs. Then the City doubled down on the insanity and filed lawsuits against the fire and police associations in November 2014. Even the City’s Director of Management and Budget, Maria VillaGomez, stated in her deposition that what the city allegedly is paying in increased health care costs is still less than what an average cost of living adjustment would be for the firefighters. The math is obvious that with the current Evergreen scenario, the city is actually spending less money than they would have spent on a fair wage increase. The fact of the matter is that our elected officials have bought into the city manager’s rhetoric and may now realize that there employee, Sheryl Scully, has seriously underestimated the resolve of the 1600 members of the Firefighters Association.
    To address the remainder of your response, it has nothing to do with the constitutionality of the Evergreen clause. It merely admits that the city manager’s plan has backfired on her and her followers. Now that this scenario is being played out in a neutral setting which can discriminate truth from rhetoric, the public will start to receive an education on how bad Sheryl Scully’s plan is. Now I ask you, where is the abuse really at?

    Now I ask you, where is the real abuse, and which party is defending their rights?

    • Mark,

      What exactly is the unions purpose in wanting a 10 yr evergreen? The city has said they want a shorter evergreen so that both sides have an incentive to agree on a new cba faster. That position is one that sounds rational and responsible to the public especially when you consider fire hasn’t even come to the table. The publics perception is that the unions want a long evergreen so they can use it as leverage for more benefits/money. the perception is also that the unions are out of touch with reality and want what most people consider unreasonable- to not feel the effects of rising healthcare the way citizens and other public safety unions have. Please enlighten us on how a longer evergreen is in the publics interest.

  5. Joey, here is a web link to a good website offering good examples of how an evergreen clause works on contracts in the business world ( http://www.fwpclaw.com/news/legal-news/the-benefits-and-enforceability-of-evergreen-contracts/ ).
    Specific to your question in the context of collective bargaining between the Fire Association and the City, it gets a bit more involved and has quite a bit of history which, unfortunately, city staff has failed to provide to the media and the public in general.
    From my perspective, most media coverage to date has focused on the assertion that the Evergreen only serves the Fire Union’s purposes. Nothing could be further from the truth. As I stated before, specific to public safety, the biggest reason for using an evergreen clause is to provide continuity of the contract provisions because public safety personnel do not have the right to strike to make their point clear to management. In both concept and practice, an evergreen clause provides the time required to negotiate a contract correctly on the first try.
    I guess what the real question should be is what does the city get out of the evergreen provision in the firefighters contract? The answer is full of non-economic provisions that the city has negotiated for over years and years of collective bargaining, such as promotions, management rights, a grievance process that is fair to both management and the firefighters, and other miscellaneous provisions not covered in state law. This particular set of circumstances came up on the record in the negotiations between the Police Officers Association and the City last summer. The Police Officers Association negotiator had to remind the city negotiators on the record of all they would stand to lose if the city unilaterally cancelled the contract. The city would lose the right to appoint management personnel, lose assessment centers in the promotional process, as well as other things that they have negotiated for and gained through the negotiations process over the last 40 years. Ask the city for a copy of their video that day, and you will see Jeff Londa, their Houston attorney, physically push his chair away from Bettye Lynn, their Fort Worth attorney after she made the city’s flawed argument. The body language was indisputable that Londa knew hat Lynn had screwed up…
    Going back to the city trying to make this a one sided issue specific to the Evergreen, the city would have you believe that fire and police get automatic pay raises every fiscal year during evergreen but nothing could be further from the truth. Specific to the 10 year time frame, that was secondary to the City Attorney’s recommendation back in 1989 to City Council. It is unfortunate that while city employees do not have to negotiate to get a cost of living adjustment every fiscal year, firefighters and police do have to negotiate for the same type of cost of living adjustment. If you look at the City Attorney’s website at sanantonio.gov, you can see all the past fire and police contracts there. If you look at them closely you will see that there were several times that the firefighters took a 0% wage increase due to ongoing negotiations in Evergreen. The information submitted to the court shows that the alleged increase in health care costs for firefighters insurance is still less than what an average wage increase would have cost.
    The root problem here is not the evergreen provision, which is technically referred to as a Duration of Agreement clause, it is the fact that our current city manager severely underestimated the resolve of the firefighters regarding negotiating a contract under unfair conditions that she has attempted to orchestrate over the last two years. First she refused to answer Open Records Requests in a fair fashion, then she doubled down on the insanity and sued both public safety associations based on flawed advice from the two attorneys mentioned above.
    It should have become evident to everyone out there, including City Council, that her plan has failed to provide whatever results they were seeking, and they should encourage her to enjoy her retirement years elsewhere.

    • Most people think about fair in relation to the way they and others similarly situated folks are treated. I guess that’s where the problem is. most people don’t think it’s fair that healthcare costs keep rising and organizations won”t or can’t absorb all of those costs. But that’s not the city managers or the city’s fault, that’s a systemic problem with healthcare and most people have accepted that they must absorb those costs until there are significant improvements to the healthcare system as a whole.

      And we know public safety has chosen the lesser of two evils in forgoing raises in lieu of a Cadillac insurance plan. And yes civilians get cola’s when public safety hasn’t but that’s miniscule compared to all of the extra compensation public safety gets that civilians don’t. In fact, civilian pay looks downright bare bones compared to all of the ways uniformed get paid and that’s okay.

      I don’t think the public is against the concept of an evergreen for the reasons you cited, but hypothesizing that it might take ten years to come to an agreement is pretty ridiculous, at least from the folks I know.

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