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VOL. 126 | NO. 148 | Monday, August 1, 2011

Budget Redux

A union lawsuit against the city jeopardizes new fiscal year

By Bill Dries

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Every July 1, the city’s budget deliberations are supposed to be over and the fiscal year should be under way.

Firefighters stand alongside sanitation workers and other union members outside City Hall recently as hundreds gathered to protest pay cuts during budget deliberations by the Memphis City Council.

(Photo: Lance Murphey)

Even when that happens, which is most of the time, there is an understanding that the budget is a plan that may change because of conditions that cause Memphis to spend more than it planned or for revenues to fluctuate. But items like how much to pay city employees are always set in stone. Except this year.

What was already a contentious budget season is in overtime with some City Council members claiming they didn’t know what they were voting on at the last meeting in June when they approved the budget based on an agreement made during private caucuses. Other council members reluctantly agreed to a multi-year approach to reordering the city’s financial priorities advocated by Memphis Mayor A C Wharton Jr. That’s after pushing as hard as they could to do it all in the space of a single fiscal year and coming up short of the seven council votes needed for passage. They aren’t anxious to see that undone.

A 4.6 percent pay cut for city employees and a voluntary buyout of sanitation workers are key terms of the agreement. Eleven days into the new fiscal year, the 13 unions representing city employees took the formal step to reopen the budget season by filing a federal lawsuit against the city of Memphis.

The coalition of the unions is the same coalition that agreed in February to go without any pay raises at the outset of the budget season to help the city through what all agree have been tough economic conditions. But they said there was nothing in their memoranda of understanding (MOU) about a pay cut or a buyout of sanitation workers. As a result, they claim the city administration and the unions are at a contract impasse that the council has to specifically decide.

“The unions reasonably relied on the city’s execution of the memoranda, as well as the provisions of the impasse ordinance, to accept the negotiations are successfully concluded,” the lawsuit reads. “By failing to present its final economic terms in negotiations and by abrogating the agreement resulting from negotiations, the city deprived the unions of their right to petition the City Council for redress under the impasse ordinance.”

The unions want a federal court injunction that orders the economic terms to go through the impasse procedure, in place since 1978 strikes by police and firefighters. They are also seeking compensatory and punitive damages from the city and class action status for the lawsuit. Wharton hasn’t ruled out some continuing adjustments to the budget.

“As of this moment, I have not heard a sufficient number of council members come to me to say they want to undo it,” he said. “Fine tune it? Yes, we’re open to that just as on the holiday pay. We had to adjust that because of some difficulty.”

Wharton originally planned to get the 4.6 percent pay cut through city employees taking 12 of their paid holidays as unpaid holidays or furlough days. It became a pay cut when council member Joe Brown questioned whether the administration could undo paid holidays agreed to by ordinance. The other alternative to the pay cut is laying off several hundred more city employees.

Shelley Seeberg, the administrator of AFSCME Local 1733, the union that represents sanitation workers, said the city should look elsewhere.

The Memphis situation isn’t unique. Governments elsewhere are facing lawsuits roughly similar to the local lawsuit.

AFSCME International filed suit in Illinois over that state’s decision to cancel raises for thousands of state employees. State employee unions in Rhode Island this year filed suit over plans by the governor and the state legislature to curtail pension and retiree health care benefits for state and local government employees.

And the state of California has been in court with public employee unions for more than two years over furloughs during the administration of Gov. Arnold Schwarzenegger.

“I hope it’s not a trend for the future. I think the reality is that lawsuit was filed because we believe our MOUs – 30 years plus – have to be upheld by this administration and this City Council. We bargained in good faith.”

– Shelley Seeburg, Administrator of AFSCME Local 1733

“I hope it’s not a trend for the future,” Seeberg said. “I think the reality is that lawsuit was filed because we believe our MOUs – 30 years plus – have to be upheld by this administration and this City Council. We bargained in good faith.”

But the lawsuit has had the effect of slowing down the reopening of the budget while sentiment on all sides is still fresh. And that is why the filing of the lawsuit didn’t ruffle many feathers in the administration. Wharton, an attorney, said just hours after it was filed, he thought it was the right thing to do to get a definitive answer.

“There always will be discussions and folks looking back and questioning,” he said. “That’s a part of city life. That’s life in the big city.”

Firefighters union leaders had a separate item at impasse before the lawsuit was filed. But the council delayed action on the impasse after City Attorney Herman Morris cited the lawsuit, which he said touched on issues involved in the impasse item.

“It appears to raise a number of issues,” Morris said. “It (the lawsuit) addresses and pulls into the courts the very issues that the council would discuss and would presume to act upon. … This matter has moved into the courts and that’s where it should be resolved.”

Some council members weren’t so sure, but were willing to defer the item until the first council session in August. By then the city might have filed its first response to the lawsuit in federal court.

Memphis Fire Fighters Association vice president Joe Norman agreed to the two-week delay but says the item has nothing to do with the lawsuit. He was willing to give the city time to respond to the lawsuit before pushing ahead on the earlier impasse.

“This impasse was declared about four months before the lawsuit was filed,” he said. “I don’t think this two-week delay has anything to do with the lawsuit. We are ready to move forward. … But there will be no adverse impact on the firefighters with this delayed for two weeks.”

The unions have also shifted political scenery attempting to link the budget battle to another emotional and complex issue involving lots of money. AFSCME organized a daylong protest on the Main Street Mall in front of City Hall July 19 that drew MCS parents. The protests, then and during budget season, lack the aura and relentless emotion of the 1968 sanitation workers strike AFSCME leaders in particular have evoked.

“They need to start keeping their promises to workers,” Seeberg said. “That MOU is a promise and it’s something that’s been built on since the 1960s. We all know what that fight was about. Now we are out here today having the same argument.”

The protests are also rooted in a timeless political strategy that is less emotional and more calculated: Let the decision makers see the room where they will vote filled with those who support their position – vocally and in such a way that they are immediately identifiable.

The protests have been about those kinds of numbers in an election year for City Hall.

There has been an attempt or two at street theater – a few dogmatic rants about the union cause and class warfare in general.

But the political wallop has been city workers massed at City Hall on Tuesdays – segmented by the colors of T-shirts and safety vests – cops in dark blue, firefighters in red, sanitation workers in lime green.

Seeberg, meanwhile, is pushing on other fronts suggesting new budget priorities away from the focus on the size of the city’s work force and its pay and benefits.

She was at the last meeting of the Memphis-Shelby County Industrial Development Board recently, a forum whose actions fall more along the traditional fault line of management and labor.

She and other union leaders have repeatedly attacked tax breaks given by the board to companies and their management moving to or expanding in Memphis.

“This is a time of crisis. The budget is like a pie,” she said. “We are giving away substantial revenue here that people need to be aware of.”

PROPERTY SALES 57 280 1,209
MORTGAGES 55 244 916
BUILDING PERMITS 158 699 2,751