Simple As A, B, C
Three measures would affect Salinas pocketbooks.
Thursday, October 1, 1998
At first look, Salinas ballot Measures A, B and C appear simple enough, but look again: They reach deeper into the city''s pocketbook and emotions than first glance reveals.
Measure A amends the city charter by establishing binding arbitration for Salinas Fire Department employees--at a cost of $600 per day that the city would have to split with firefighters. Measure B adds to the charter by mandating voter approval of certain binding arbitration decisions--essentially giving voters control of arbitration if the costs get too high. Measure C continues assessing the business license tax at its current rate--a rate that helps fund city services.
Measure C has to do with extending an increase in the city of Salinas'' business license tax--an increase that was already adopted by the Salinas City Council in 1995, but which now requires voter approval to stay in effect, under the terms of Proposition 218 passed in the 1996 November election.
If Measure C fails, business license tax will be rolled back to the pre-1994 rates, with an annual revenue loss of about $650,000, says Salinas finance director John Copeland. If that happens, the city may well have to reduce services, choosing between police and fire, parks and libraries.
The business tax increase actually goes back to 1994, when Salinas business license taxes were increased by the Salinas City Council. The increase carried a "sunset provision" to eliminate the raised rates in 1996. But in 1995, an ordinance was adopted to delete the sunset provision and extend the business license tax increase
The taxes are levied in two ways, explains Copeland. Retail businesses are charged a percentage of gross receipts on a sliding scale. Professions are charged a flat fee. Manufacturing and packing sheds are exempt. Financial institutions and nonprofits are exempt by state law. In 1994, Copeland says, the significant increase was in the flat fee side. Professionals went from $50 to $200, although the retail scale was also increased.
According to Copeland, the city originally decided to increase the business tax in 1994 to compensate for state budget cuts and a deflated economy. "The city," he says, "took steps to cut costs, then addressed revenue by raising the utility tax and business license tax, many of which had been in place since the 1960s." Business license tax revenues go to the general fund, which supports police, fire, streets, parks and libraries.
But some opponents of Measure C say business taxes in Salinas are collected unevenly. "The city says it needs more money," says Dennis Ostrander, Sr., of Pat''s Monograms & Uniforms, "but doesn''t collect the money due them. There are people who are not paying. They send notices but don''t do anything about it. There''s no enforcement."
Copeland says it is the responsibility of the business to renew their licenses. "If they don''t," he says, "we try to follow up. There are some problem areas, but most renew."
Other opponents, including Mark Dierolf of the Consumers Against Unfair Taxes, point out that county businesses outside the city limits don''t pay a business license tax but compete with Salinas businesses, which do pay a tax.
The Salinas Valley Chamber of Commerce continues to support the increased business license tax rates, but is again asking the city to review the rates. A review was done after the last increase but came to no resolution, says Carol Kurtz.
"We''re asking that a new, more fair system be put on the ballot in the year 2000," says Kurtz.
Measure A made it onto the ballot via petition spearheaded by the Salinas firefighters. Current state law requires all parties to meet and negotiate in good faith on terms and conditions of employment, but allows a city council to act unilaterally to implement its last best offer if agreement is not reached in the negotiating process. Measure A would require unresolved disputes by Salinas firefighters to go to arbitration.
"Binding arbitration is all about fairness," says Steve Furtado, president of the International Association of Fire Fighters Local 1270. "It''s a fair system to settle any disputes in a cost-effective way between the city and fire fighters."
"We''re not really talking wages," adds Furtado. "Arbitration is intended for resolution of grievances which arise from interpretation of contract language."
Arbitration is a way of dealing with disputes between employers and employees. Should Measure A pass, disputes between the city and firefighters would be resolved by a panel consisting of one city appointee, one firefighters'' appointee, and one arbitrator appointee from a state-approved panel, at a cost of $600 a day to be evenly split by the city and firefighters.
During the last three years, according to Furtado, firefighters have had 27 grievances or disputes. Historically, says Furtado, grievances have involved contract language issues like promotions, failure to meet and confer on working conditions, fitness program, pay for working out of class (temporary assignment to a higher job classification), or uniforms.
"The language," he explains, "is vague. But it''s the best language we could get at the time."
Not all the disputes get settled. Under the proposed amendment to city Charter Section 120, fire department labor disputes would be submitted to a three-member board of arbitrators. One member would be selected by the city and one by the recognized employee organization; together, they would select the third member from a state list of arbitrators. Decisions of the arbitration panel are binding. The entire process is governed by state law and includes a 10-day period during which differences can be resolved or decisions amended.
According to Furtado, savings are in court costs and time. Arbitration "would be used only after both sides have exhausted all avenues. Cities that have arbitration rarely use it," he says, "because both parties would rather come to agreement without going to arbitration. They don''t want a third party to impose a decision." Furtado says a number of California cities have already passed binding arbitration measures, including the cities of Santa Cruz and Gilroy. A binding arbitration measure is also on the ballot in Watsonville.
But the city sees the issue as one of democratic process. Hence, the reason why Measure B is on the ballot. Measure B is a city-proposed charter amendment that requires majority voter approval of any binding arbitration award in which the cost to the city is more than $12,000 per year greater than its last offer to fire department employees for wages or benefits.
"We think (Measure A) erodes the public representation process," explains Jorge Rifa, assistant city manager. "Measure B restores, for residents of Salinas, the opportunity to approve the financial impact of decisions made by a trio of arbitrators answerable to no one. At least the council, as representatives of the city, is answerable to voters with respect to collective bargaining."
Rifa also notes that Measure A applies to all Salinas Fire Department employees, including supervisory, management and clerical staff, not just firefighters.
"People," says Rifa, "expect the City Council to balance the many, many competing needs and wants against limited resources. Taking decisions out of the council''s hands and giving authority to an arbitration panel really handcuffs the ability of the City Council to handle things."
According to Furtado, binding arbitration is about fairness and "bringing the arbitrator''s decision to a vote undermines the concept of binding arbitration." Measure B, he says, "does a disservice to voters by clouding the issue."
Rifa sees binding arbitration somewhat differently. He says it allows financial decisions to be made by someone with no "equity stake in the city." According to Rifa, Measure B "protects the democratic process and allows the community the most flexibility and accountability to the voters."