Salaries Remain Enigmatic As City Budget Talks Continue
Salaries for employees could eventually work in favor or against city officials when it comes to how much they will spend in 2018.
In the 2018 executive budget, salaries are down $94,577, or .58 percent, for a total of $16,144,507 in the proposed spending plan. However, because the city currently has four collective bargaining units with expired contracts, it is unknown how much city officials will actually spend next year on employee salaries if new contract agreements go into place either through negotiations or binding arbitration hearings.
The four employee unions without a current contract include the International Association of Firefighters Local 1772; Kendall Club Police Benevolent Association; and two units of the Jamestown City Administrative Association, with one representing Jamestown Urban Renewal Agency employees and the second representing mid-level managers and some clerical workers.
Sam Teresi, Jamestown mayor, announced last week that the binding arbitration hearing with the city and its police union will take place in February. Teresi said the arbitration panel is the last step in the three-step process toward reaching a contract agreement with the police union. The first step is negotiations between management and the union, with the second step being mediation until a declaration of impasse is declared between the two sides.
In the meantime, Teresi said they are allowed to continue negotiating with the police union before the binding arbitration panel meets. He said the last time the city and the union came to an agreement in 2013, they were in a similar situation.
Last month, Teresi said negotiations with the fire department union has reached an impasse and they are waiting for the union to file the necessary papers to start the binding arbitration process.
For the two Jamestown City Administrative Association collective bargaining unions there is no binding arbitration, Teresi said in August. He said like with the police and fire unions, there is a negotiation and mediation process, which have been completed with no agreement reached. However, the third-step of the process isn’t binding arbitration, but a super mediation process commonly referred to as a fact-finder’s report. Teresi said the report can either be accepted, which will include the terms of a new contract, or can be rejected.
If rejected, the negotiation process is restarted. Also, Teresi said the municipality can impose a contract on union employees to last no more than one year, which cannot be less in any category than the previous expired contract. Both Jamestown City Administrative Association contracts ended at the start of this year.
No matter how each of the four expired union contracts are settled, a state law put into place four years ago could help the city when it comes to the binding arbitration hearings with the police and fire unions. In 2013 when Gov. Andrew Cuomo and the state Legislature created the Financial Restructuring Board For Local Governments, the new legislation also included reform to the binding arbitration process to help eligible municipalities, which Jamestown became when they entered the state program.
Under the 2013 legislation, which was extended in 2016, the statute established an ability to pay standard that arbitration panels are obligated to follow, giving far greater weight to a municipality’s ability to pay for services than under past law. For these localities, including Jamestown, arbitration panels must give 70 percent of the weight of their decision to the municipality’s ability to pay, and must specifically consider the requirements and limitations of the states historic real property tax cap.
The remaining 30 percent weight would be afforded to the other statutory criteria such as wage comparison, prior contracts and public interest. Under past binding arbitration law, there were no assigned weights to the four measures and no obligation to consider the real property tax cap.
Because of the duress the city is under financially, which includes hitting its constitutional tax limit and proposing a 2018 budget with a $946,679 deficit, the arbitration panel could favor the city more than the police and fire unions. In September, Teresi said the new law should help the city.
“We do not fear the process. The changes in the arbitration law were warranted and are good and reasonable, and work in the best interest of the city’s taxpayers. Furthermore, given our fiscal condition, I don’t know how an arbitration panel would legally be able to give a decision that fails to include the municipalities ability to pay,” Teresi said. “So we think an arbitration panel would be hard pressed to give salary increases for 2016 and 2017.”
The contracts for the International Association of Firefighters Local 1772 and Kendall Club Police Benevolent Association both expired at the end of 2015. Teresi said if an arbitration panel rules on the fire and police salaries, it will only be for the two years there wasn’t a contract.
However, despite the new binding arbitration law that weighs heavily the municipalities ability to pay salary increases, Teresi said city officials aren’t taking any chances. The 2018 proposed budget includes an unassigned fund balance of $732,444, which Teresi has recommended using none of it toward the 2018 spending plan.
Teresi said there are too many unknowns to use the city’s savings toward the 2018 budget. These unknowns included how much of a deficit the city government might end up with at the end of 2017. Right now, the 2018 budget proposal predicts the city will lose $272,612 in 2017. Also, he said the city has four unions with expired contracts that might reach an agreement during 2018. Currently, there are no salary increases proposed in the 2018 budget for the four collective bargaining units without a contract, but the mayor said that might change during next year and the city has to be prepared.
“We (city officials) don’t know how the arbitration process will turn out that we are going into,” Teresi said. “Also, we don’t know how the collective bargaining process will turn out with the management unions.”
The 2018 budget proposal includes a tax levy increase of $167,712, which is a 1.1 percent tax levy increase. With the tax levy increase, the city has once again hit its constitutional tax limit of $16,011,982. The constitutional tax limit is the amount of money a municipality can ask its property taxpayers to provide compared to the total assessed property value in the community. Each municipality in the state has a constitutional tax limit of 2 percent of the five-year average of the total assessed property value in the community.
The total budget is $35,724,391, which is a $700,897, or 2 percent, increase. The tax rate will be $23.98 per $1,000 assessed property value, which is a 21 cent increase. If the proposed budget is passed, the tax increase is under the state tax cap.