JAMESTOWN – The case involving the City of Jamestown challenging a recent arbitration panel’s decision involving a contract with its police union will go before the State Supreme Court in Chautauqua County later this month.
Last October the three-member arbitration panel ruled 2 to 1 that – among other things – the city must provide a retroactive, 2 percent salary increase for all members of the Jamestown Kendall Club police union for the years covering 2016 and 2017. In November the Jamestown City Council voted 7 to 1 in favor of challenging the arbitration decision, saying it would be a violation of its fiduciary duty to comply with an award that city officials believe violates a 2013 arbitration statute that is supposed to weigh the ability for the municipality to pay (Civil Service Law S 209).
In an interview this week with WRFA, Jamestown Mayor Sam Teresi reasserted the city’s position on the matter.
“The city’s arbitration panel member [then-clerk Todd Thomas] felt that the decision was not in compliance with the revised state arbitration law from 2013 in the fact there was no consideration whatsoever as to the city’s ability to pay, with a 70-percent weighting on the overall decision on that factor alone,” Teresi said. “If you read the October arbitration decision, there is very little that talks about that. There was three days of testimony that was virtually ignored by the panel about the city being at its constitutional taxing limit. We had one full day of testimony and cross examination about the city’s legal ability and practical ability to go in and raid its water and electrical utilities’ profits that no longer exist in sufficient supply to basically pay this raise.”
While the mayor and city council say the 70-percent weight factor wasn’t fully addressed in the arbitration panel’s decision, the the Kendall Club painted a different picture in both its arguments before the arbitration panel as well as in its pre-filing documents in the case that will go before the State Supreme Court. They say the statute was indeed fully considered and that was clearly reflected in the majority decision of the arbitration panel.
The 44-page decision by the Arbitration Panel also specifically addresses the weighting threshold. It reads, in part:
“As Jamestown has been designated a ‘Fiscally eligible municipality,’ the Panel is required to give preponderant weight to the City’s ability to pay in making its determinations. As the City has argued that it does not have the ability to grant improvement in wages and benefits, the threshold question for the Panel is whether any increases in employee compensation can be awarded. There is certainly evidence in the record that the city faces fiscal challenges.”
While acknowledging the concerns the city brought forward in its argument, the arbitration panel also stated:
“With respect to the city’s position, however, the record contains countervailing evidence that weakens the case for a two-year freeze in police pay. Despite stresses it faced, the City’s careful and skillful budgeting resulted in a surplus of more than $1.2 million in 2017, despite the fact that, unlike in previous years, it received no profit-sharing revenue from its Board of Public Utilities. The Office of the State Comptroller, in its assessment of the City’s finances, issued ‘no designation’ of fiscal stress for 2016, and the Union’s expert witness, Kevin Decker, testified persuasively that the data available for 2017 strongly suggested an even better score from the Comptroller for that year. Also relevant is the fact that the city voluntarily agreed to 2016 and 2017 pay increases for all of its other bargaining units, a result that is difficult to square with the argument that there is simply no ability at all to grant any wage increase to the police officers.”
In addition, the arbitration decision addressed use of profits from the Jamestown Board of Public Utilities for the city’s general operating budget.
“There is no dispute that a municipality is entitled to a fair return on its investment in a utility. It is also undisputed that for several years prior to 2017 the City sought and received a profit-sharing payment from the BPU (most recently about $482,000), in addition to the payments that the BPU makes annually in lieu of property taxes. The city points out that it does not have the unfettered authority to use an unlimited amount of the BPU’s revenues for general municipal purposes… but to say that authority in this regard is not ‘unfettered’ or ‘unlimited’ is not to say that it cannot be exercised at all. In this case the City made a business decision not to seek any profit-sharing payments from the BPU for 2017, and we do not doubt that this decision was a reasoned one given the BPU’s needs. At the same time, one of the consequences was the forgoing of revenue that could have been used to help underwrite a police-pay increase of some magnitude, rather than implement a pay freeze for two years. An argument that granting a pay increase funded in part by the BPU would have involved risk is not the same as the argument that there is no ability to pay.”
After acknowledging the weighting factor and focusing on the city’s case that it wasn’t financially capable of issuing a salary increase for police, the arbitration panel still concluded “that some pay increases of some magnitude are within the city’s ability to pay, although none approaching the [5 percent] increases demanded by the Union.”
MAYOR RESPONDS TO PLATTSBURGH CASE
The Kendall Club also argues in the upcoming State Supreme Court case that a recent and similar court case from Plattsburgh, NY involving a contract with its firefighters’ union has already addressed the challenge by Jamestown officials. They claim that case set a precedent that the State Supreme Court isn’t responsible for second guessing a decision from a duly created state arbitration panel, so long as the 70-percent weighting factor, along with all other applicable state law, was considered in making a final decision.
Still, Teresi says there are different circumstances at play between the financial challenges facing Plattsburgh and those affecting Jamestown.
“Different place. Different impacts on the budget. Different court. As well as different financial abilities from that community. My guess is without knowing Plattsburgh’s numbers but being sufficiently aware of what’s happening in most cities across the state, Plattsburgh also has financial challenges on the table. I do not believe, however, that they are one of the communities like Jamestown that are at or near their constitutional taxing limit,” The mayor noted.
Teresi also provided more details on the cost associated with the arbitration ruling, saying the retroactive increase were to go forward it would cost the city an estimated $800,000 in this year’s budget. He also said that more costs could come forward if a similar increase were required for the Jamestown Professional Firefighters Association, whose contract for 2016 and 17 is also at an impasse with the city and is awaiting the final outcome of the police union case.
The arguments in Supreme Court involving the police contract arbitration decision are scheduled for Monday, March 18. The Kendall Club is being represented by legal counsel from Fessenden, Laumer & De Angelo while the city will be represented by Bond, Schoeneck & King.
Meanwhile, WRFA’s full interview with Mayor Teresi, including additional comments on the arbitration case as well as the upcoming BPU substation Annexation Case, will be broadcast Thursday (March 7) afternoon at 5pm, Friday (March 8) afternoon at 2pm, and Sunday (March 10) at noon.