NOTE:  We promised an update to our initial letter regarding the Council’s unanimous response to approve the raise and the bonus.  Below is a letter written to the Democracy Tent group that will be discussed in their Zoom meeting at 10 am, 5/12/20.  Town Attorney Rob Schultz will be in attendance.

Lee,

Thank you for inviting Rob to the meeting. I appreciate Rob’s willingness to discuss this with us.

I would like to address a number of statements that have been made regarding the negotiating process and the decision to grant salary/bonus increases at a time when the Town, the County, the State are all facing an unprecedented economic crisis. It is because of this crisis that I believe the decision made by the Council was deeply flawed and showed poor judgment.

Furthermore, we should all remember that the citizens of Los Gatos are the owners of the Town’s assets, not the Council. Decisions like this should not be influenced by personal philosophies about “modeling behavior that other employers would take”. Rather the decision should be based on what is best for residents of the Town of Los Gatos, taking all facts into consideration. The citizens deserve the most efficient and effective use of the Town’s assets.

My last point is, unless the residents exercise their right to be heard, we will continue to run the risk of having decisions such as this one handed to us without open debate and transparency.  We own this issue.

Here are some facts that everyone should understand, and I hope Rob addresses:

Rob is correct that current labor agreements with all three bargaining units do not expire until 2021. The TEA (Town Employee Association) and AFSCME (American Federation of State County and Municipal Employees Union) expire June 30, 2021 and the POA (Police Officers Association) expires September 30, 2021. All agreements are silent on salary increases for FY 21 but do require that the Town “re-open” salary discussions. The MMBA (Meyers-Milias-Brown Act) controls the process by which cities are to negotiate with bargaining units and requires negotiation in good faith. It also allows these negotiations to be held in “closed session”.

• There was overwhelming evidence for the Town to take a “good faith” position that now was not the time to increase any salaries or pay any bonuses because of the economic dislocation that was occurring and continues to unfold. This would have been a very reasonable and principled argument to make, based on objective evidence.
• The Mayor was incorrect in framing the decision along the lines that the Town’s employees were “incredibly deserving and hard-working” with the implication if the Town did not agree to these increases the Town was some-how uncaring. That was never the issue. You can hold both views that the Town’s employees are deserving, hard-working AND that it is not fiscally prudent to give any increases at this time.
• Despite the assurances that the Town Manager made that Town had the FY 21 budget to handle these increases, there is no guarantee that this is correct. The truth of the matter is that no one, including the Town Manager and the Council has any idea as to what will happen to the Town’s finances over the next few years. Claiming that the money is in the budget, does not guarantee that the Town can afford a $1 million increase in salary. What happens if the Town’s revenues decline more than what is programmed in the budget? Then what?
• The only obligation the Town ever had was to “meet and confer” with the bargaining units. The Town was under no obligation to accept any union demands. The Town could legitimately have held firm on the position that now was not the time to grant any raises or bonuses. (Adamant insistence on a bargaining position which is well grounded in facts does not equate to a refusal to bargain or violate the duty to bargain in good faith. It is merely a legitimate position adamantly maintained.  I am sure that Rob can affirm this.)
• The Town Council held 4 closed door meetings to discuss the bargaining units demands.
  1. The first meeting was February 4, which was prior to the Covid 19 outbreak.
  2. The remaining three meetings were held on March 24, April 7, and April 28, well after the Covid 19 outbreak was in full view.
  3. On February 10, the Santa Clara County Board of Supervisors declared a local emergency and local public health emergency.
  4. On March 4, the Governor declared a state emergency and
  5. On March 16, the Health Officer of Santa Clara County issued a “shelter in place” order.

The point is that the Council was fully aware of the impact of Covid 19 by their March 24 meeting and should have instructed the negotiating team to pull all prior proposals and to adopt a position of “now was not the time”. 

After receiving numerous written statements from the public which were highly critical to the recommendation to accept the revised MOU’s (Memo of Understanding) for the two bargaining units, the Council proceeded to approve the MOU’s for the two bargaining units.  The POA MOU is still under negotiation. Why the Council chose not to bring all three proposals at the same time so the public could understand the total increases being given, is a mystery. The closed- door sessions dealt with all three bargaining units simultaneously and all three units were limited to a reopening on just salary. This piecemeal approach diminishes transparency, openness, and a complete understanding of the budget impact.

At Tuesday’s meeting, Rob correctly pointed out that the Council did have the option to not accept the revised MOU. They had a very legitimate case for this, namely the economic uncertainty facing the Town was real and highly uncertain. This would have sent all parties BACK to the bargaining table. This would have been a very reasonable action to take and a good outcome. It would give additional time for all parties to re-consider their positions, taking into consideration new information and additional fact finding. It should also be pointed out that there was no “deadline” on reaching an agreement. The current MOU’s do not expire until 2021 and are silent as to when the “re-opening” negotiations were to conclude. In fact, the Town has in the past faced situations where MOU’s have expired, and the Town has not come to a new agreement and continues to negotiate post the MOU expiration date.

Council also approved the same COLA (i.e. 1%) terms for the Management, Confidential and Temporary units, none of whom were eligible for any increases. This was done based on the Town Managers recommendation. Apparently, the recommendations for such changes is at the discretion of the Town Manager “based on budget considerations and other factors at the time”.

While admittedly the dollar impact of granting a 1% COLA to the Management classifications is approximately $50,000, it is the “tone-deafness” of the recommendation at a time when many in the community are suffering from the impact of Covid 19, which makes me question the Town Manager’s judgment. In comparison, the Town of Los Altos is considering at their May 12 Council meeting a recommendation from their Town Manager to defer all salary increases for management and executive employees until late 2020. The reason stated was “given the emergency due to Covid 19 and the reduction of revenues to the City, the recommendation is for this group is no adjustments to pay ranges or benefits at this time but to defer this discussion to later in 2020.”

What everyone needs to realize, this was a political not economic decision made by the Council with no resident input or oversight. While I do not question the Council’s intent, I do question their judgment and the very flawed process they used in negotiating this outcome. The process is inherently non-transparent and hides from public view a very important decision that impacts the residents.

Therefore, I proposed the Council adopt the City of Menlo Park’s policy on public input and outreach regarding labor negotiations. Their policy requires a public hearing in advance of labor negotiations. This provides an opportunity for the public to be informed about the Town’s labor negotiations before the Town commences negotiations and to provide the Town Council with valuable resident input before the negotiations begin. It works well for the City of Menlo Park and it will work for the Town of Los Gatos. I was encouraged to see that the Council was moving to adopt this policy.

Lastly, I would like everyone to engage in this thought experiment. Let us assume the Town does have $1 million to spend next year. The question is, should the Council increase salary expense by $1 million or are there better uses of the Town’s resources? I would have preferred the Council to engage with the residents on this point and actively explore alternatives, rather than pursuing a “closed door session” approach where we were “informed” of their decision after the fact. Maybe a better solution would have been to only grant a 1% COLA to the three bargaining units (which would have reduced the amount to $500,000) and set aside the balance for other badly needed programs.

For example, the Los Altos Council is voting on at their next Council meeting to allocate $250,000 in one-time funds to a Small Business Assistance Grant Program.  The Los Altos Community Foundation and Los Altos Chamber of Commerce, in partnership with the City, will work to raise additional money to supplement the program funds. The program will offer immediate financial assistance to nonprofits and small businesses located in Los Altos to aid in maintaining their business and workforce. If the Town of Los Gatos did this, we could have funded this entire program by reducing the $1 million salary increase to a 1% COLA adjustment. But since the residents were never involved in the discussion, we never had a voice in the decision.

I trust that this will add additional context to Tuesday’s discussion with Rob.

Phil Koen

Los Gatos Community Alliance