City Says Law Wasn’t Applied In Arbitration Panel Ruling

Jamestown officials view the state’s 2013 directive to give 70 percent weight to a municipality’s ability to pay as the state’s attempt to fill a gap in court-defined binding arbitration case law that has been ignored by its most recent arbitration panel.

The city is asking the state Supreme Court in Mayville to make a judgement pursuant to Article 75 of the Civil Practice Law And Rules and strike down the arbitration award granted to the Kendall Club in October.

Attorneys for the city say a 1977 case involving the city of Buffalo don’t show deference to arbitration panels but instead state the arbitration panel’s salary increases were upheld because the state Legislature hadn’t provided specific weighting of factors to balance the priorities of cities and employees. The 2013 state law mandating 70 percent weight be given to financially eligible municipalities’ ability to pay an arbitration award was a correction of that flaw, the city writes in its memorandum of law, that was not followed by the arbitration panel in the most recent arbitration between Jamestown and the Kendall Club PBA.

While case law is conclusive regarding courts’ typical deference in these cases, the city’s attorneys state Jamestown is a different case than most cities.

“The city’s status of being the only city in the state at its constitutional tax limit, when given a 70 percent weight, should have been determinative,” wrote Terry M. O’Neil, an attorney from Bond, Schoeneck and King representing the city. “On its face, a municipality that has no ability to increase tax revenue should not have two 2 percent retroactive pay increases foisted upon it. The 70 percent weighting is a legislative mandate that cannot be swept aside in one conclusory nod.”

One of the things O’Neil cites as problematic is the arbitration panel failing to calculate a dollar amount the award would cost the city.

The includes the cost of retroactive awards being compounded on a forward basis into 2017, 2018 and 2019. Also a problem, according to the city, is that the arbitration panel’s decision did not show how it used a 70 percent weighting and only mentioned the 70 percent weighting once in its decision. Instead, the panel relied on a “preponderant” weight to the city’s ability to pay.

“Guided by its own amorphous standard, the majority went on to engage in a “split the baby” type of analysis without even using actual dollar figures to describe the impact of the award,” O’Neil wrote. “Moreover, it made no actual findings as to the specific and reliable source of funding to pay the raises. Again, the failure to calculate and provide an exact dollar amount and take into account the value of the amount with respect to the real property tax cap violates the Taylor Law. A 70 percent weighting cannot be applied to an unspecified dollar amount. While we do not doubt the good faith of the majority, their direction from the state was not rough justice, but was instead specifically weighted fact finding.”

The city also argues that any reliance on Board of Public Utilities profits is arbitrary and capricious because the arbitration panel ignores the fact the BPU is an independent entity with its own board of directors and regulation by the state Public Service Commission. O’Neil wrote that the panel recognized the city was at its constitutional taxing limit and “speculated” that the city could increase its revenue from the BPU — and that an increase from the BPU could pay salary increases. But, in 2016, a year when the city received a dividend payment from the BPU, the city budgeted no money for police raises and ended the year with a deficit. O’Neil wrote that there is no evidence that BPU revenues will be sufficient to pay raises in 2018 or 2019 given that the BPU’s electric division has not been meeting its targeted rate of return set by the Public Service Commission. O’Neill reasons, similarly, that continued additional $1 million state aid payments are transitory in nature and shouldn’t be relied on in perpetuity.

“The only reliable and consistent way for the city to raise funds to pay salary increases is to increase taxes — which the city is legally barred from doing,” O’Neil wrote. “Appropriations from the BPU are sporadic and if made are based on factors outside the control of the city. Just as the city cannot rely on an annual payment from the state to balance its budget, the city cannot rely on speculative payments from the BPU to fund guaranteed salary increases.”

Lastly, O’Neil writes that the majority didn’t consider past collective bargaining agreements in making its award other than justifying the raises to the Kendall Club with recent raises to other unions. Both the CSEA and AFCSME, O’Neil wrote, received no wage increases in 2012, 2013 and 2014 and a half-percent raise in 2015 while both groups also agreed to eliminate retiree health coverage for new employees hired after Jan. 1, 2015, when those employees reach Medicare eligibility. The Kendall Club received a 2 percent raise in 2012, 2.75 percent in 2014 and 2.75 percent in 2015.

“The majority’s order, with no means to pay for it and no funds budgeted for it, will make further reductions likely, and at a bare minimum prevent funding where the city and its constituents have determined it is most needed,” O’Neil wrote. “In this vein, the majority made itself a legislative body, one that determined to rob from Peter to pay Paul.”