The Fire Fighter Pay Debacle: How did the City get into this Mess?

Hello readers, this post written by Bill King is an excellent recap of the Prop B issues. 

Re-posted from the Bill King Blog

The Fire Fighter Pay Debacle: How did the City get into this Mess?

Last Friday, Sylvester Turner issued a rambling, three-page letter in which he blamed Houston voters and Houston fire fighters for the Proposition B debacle in which the City now finds itself.

There is one person who is 100% to blame for this fiasco: Sylvester Turner. On numerous occasions he has doubled down on his "take-or-leave-it" strategy with the fire fighters and passed up multiple opportunities to resolve the dispute on reasonable terms. Instead of responsibly managing this labor dispute, he has allowed his personal pique to drive him down a destructive path that now imperils our public safety and the City's finances.

It is increasingly clear that Turner never had any intention of implementing Proposition B. Instead, he has single-mindedly pursued a litigation strategy to overturn the results of the election. We know this because in January, Turner held a meeting with a "small group of executives" to discuss "navigating implementation of the proposition while at the same time mounting a legal challenge." [see attached]  Note this was after the district court had ruled against the City in December and was saying publicly he was working on implementing Proposition B.

  

There were certainly legitimate reasons to be against Proposition B. I have many thoughtful friends who voted against it. And while I voted for it, I expressed my reservations about the approach. [read here] But the merits of Proposition B are now moot. The people have spoken, and it is Turner's job to implement it on the most reasonable terms he can negotiate, not continue to try to overturn the will of Houston voters in court.

  

How Did We Get Here?

This story begins in the 2015 mayoral election. As many of you will recall, for the first time in a mayoral campaign, I raised the issue of the City's pensions, pointing out that the City had accumulated billions in debt to the pensions and that the expense was skyrocketing. Eventually, all of the candidates for mayor in 2015 conceded that the pensions were a problem and that something would have to be done.

  

However, most of the leading candidates, including Turner and me, pledged that earned benefits were off limits. That is, if an employee had already earned a particular benefit through their service to the City, it could not be changed retroactively. But when Turner proposed his pension "reform" in 2017, he broke that promise by including retroactive changes to earned benefits.

  

The police and municipal plans at the time were about 60% and 50% funded, respectively. They agreed to their benefit reductions in exchange for an infusion of cash into their plans from the $1 billion in bonds the City would eventually issue.[i]

The fire fighters, who had historically insisted that their plan be funded, did not need any infusion of cash. Their plan was about 85% funded. So, Turner had nothing to offer them. Nonetheless, the fire fighters offered to make some adjustments to their plan that would have resulted in about $800 million in savings. But Turner rejected that offer and instead persuaded his former colleagues in the Legislature to cut the fire fighters' earned benefits by roughly $150,000 per fire fighter. The fire fighters did not receive anything in exchange for the cuts (like the cash infusion received by the police and municipal plans).

  

Not surprisingly the fire fighters were upset. In their view, the City had shorted them raises over the last 20 years because they had insisted on greater funding for their pension plan. By 2018, the fire fighters' pay was running about 20% below what Houston police and about 15% below fire departments in other major Texas cities.

In the contract negotiations after the pension bill was passed, the fire fighters demanded that some of this ground be made up. But the City offered just 4% more over two years. The fire fighters rightfully saw this offer as a slap in the face. The talks quickly broke down and an impasse was declared.

  

The Turner administration has repeatedly claimed that it offered 9% over three years. However, that offer was never formally made during the collective bargaining session, but instead was made informally after the impasse - primarily as a public relations stunt.

  

The State's collective bargaining statute provides a procedure for resolving labor disputes once an impasse is declared. The first alternative is binding arbitration, but both sides must agree. The union requested arbitration [see attached], but the City refused [see attached]. Had Turner agreed to arbitration, this matter would have been settled back in 2017 and there would never have been a Proposition B election. While it is impossible to know what the result of arbitration would have been, the union would have never received anything close to what the City is now on the hook for.

Under the statute, if arbitration is refused, the union may file an action in district court to resolve the dispute because it is illegal for public sector workers to strike. This provision was designed by the Legislature to protect the public from any interruption in public safety protections.[ii]

Almost all lawsuits filed under this law are routinely referred to arbitration and routinely resolved. But again, the City refused and embarked on a dilatory litigation strategy to delay a resolution for as long as possible. It became clear to the union that it might be years before its issues were resolved. As a result, the union decided to go over Turner's head to his bosses, the Houston voters. In just ten days, the fire fighters collected over 60,000 signatures on their pay parity petition.

  

Turner attempted to dodge putting the proposition on the November ballot by not counting the petitions as the City has frequently done in the past. But a court ordered the election and the rest is, as they say, history.

  

It was Turner's betrayal of his promise to fire fighters regarding their pensions that started this debacle. But he had multiple off ramps: arbitration on two occasions, a good-faith litigation of the collective bargaining lawsuit, and, of course, actually sitting down and talking with the union leadership at any time. The fact that he was unable to take any of these was, and continues to be, a complete failure of leadership. Ego and misplaced pride are jeopardizing the welfare of our fire fighters and the safety of the residents of our great city. We deserve better.