police contract arbitration

Tredyffrin Pays $83K for Police Contract Arbitration, or … was it really $133K?

The Board of Supervisors and the School Board have their first meetings of the New Year this week.  As is often the case, Tredyffrin’s Board of Supervisors meeting conflicts with the TESD Board meeting. Scheduled for Monday night is both the Board of Supervisor’s organizational and regular meeting at the township building and the T/E School Board will hold a special school board meeting to consider the 2013-14 budget at the T/E Administration Building.  Unfortunately, both meetings are at the same time – 7:30 PM.

The Board of Supervisor’s organizational meeting includes the adoption of the meeting schedule for the various township boards and commissions, naming of emergency service providers, adoption of township fee schedule, legal and accounting reviews, etc.

One of the interesting aspects of the organizational meeting each year is the naming of the Chair and Vice Chair of the Board of Supervisors.  The seven Board members nominate and vote on these positions.  Historically, these positions go to the longest-serving members on the Board.  However, in 2012, that tradition shifted with the naming of Michelle Kichline as Chair. Kichline had only served 2 years as supervisor and neither as a Vice Chair, but received the unanimous support of her fellow board members for the chair position.  Having served longer than Kichline, many had expected John DiBuonaventuro to receive the 2012 nod for Chair but instead he served as Vice Chair. The Board of Supervisors saw their share of controversy in 2012, so it will be curious to see if Michelle receives another vote of confidence to continue as Chair and JD to continue as Vice Chair.

After the ceremonious organizational meeting, there is a regular supervisors meeting, including a Public Hearing to “consider and enact an ordinance of the Township of Tredyffrin, Chester County, and the Commonwealth of Pennsylvania, fixing rates of taxation for the year 2013.”  We learned at the last BOS meeting in December that the township tax increase is set at 3.1%, down from the 5.5% originally forecast.

Since the December 17th supervisors meeting, we have learned of the Act 111 Arbitration Award issued for the collective bargaining agreement between the township and the police union. Much has been written about the agreement on Community Matters with many comments. If you are interested in details of the 4-year contract (2012-15), I would suggest you review posts from late December.  Once the arbitration award was announced, I submitted a right-to-know request for a complete accounting of the arbitration related expenses paid by the township.  It should be noted that this is the second police contract in a row that has gone directly to arbitration by the township.  In both instances, the impartial arbitrator came down on the side of the police union in regards to the post-retirement benefits. We know that retirement benefits , including pensions and healthcare, were major contributors to the long-standing debate between the two sides.

According to township manager Bill Martin, the arbitration costs to the township (taxpayers) re the police contract is as follows – Michael Zobrak, impartial arbitrator $14,136.46 and township arbitrators John McLaughlin, Patrick Harvey, Brian Pinheiro, etc. billed 273 hours for $69,337.50.  If my math is correct, the taxpayers paid $83,473.96 for the arbitration of the police contract.

Below are the details that Bill Martin sent for the township arbitrator costs.  John McLaughlin, Patrick Harvey and Brian Pinheiro are all partners in the Philadelphia law firm of Ballard Spahr.  The law firm billed the township 273 hours for a total of $69,337.50 which equates to $254/hr on the average.  On April 3, 2012 there are 100+ hours billed to the township under the name, ‘PFM’ — I am clueless as to what that means but I will contact the township manager for clarification.

I am struggling to understand these billable hours from Ballard Spahr.  It was my understanding that there was little (if any?) movement from the township’s initial position going into the arbitration process.  If that is the case, how is it that the total number of hours in 2012 (setting aside the hours from 2011) are so substantially higher than the total billable hours of  Michael Zobrak, the impartial arbitrator.

Something else I should point out is that on my right-to-know request in which I asked for ‘costs to date’ was dated January 1, 2013 and Martin’s response was dated January 4th. If you look at the last billing date from Ballard Spahr (below) it was back on Oct. 18, over 2 months prior to the signing of the arbitration agreement on December 23, 2012. It stands to reason that there are additional billable hours yet to be received from Ballard Spahr for those 2+ months, including the review of the arbitration award before its release.  I would maintain that the township has not seen the end of the costs — $83K may not be the entire costs.

TT Arbitrator Costs

I would suggest that we should also add the ICMA (International City/County Management Association) police department consulting fee of $49K to the total cost of the police contract negotiations.  Much of ICMA’s report was boilerplate language and their specific, cost-savings suggestions would require collective bargaining changes.  The way I see it, the township has already spent approximately $133K trying to lower police department expenses.  Based on the arbitration award, we know that the police department retained most of their prior contract benefits.

What bearing is the Act 111 arbitration award going to have on the township’s 2013 budget?  The supervisors and the finance director Tim Klarich did not have the benefit of a crystal ball in regards to the arbitration award when they calculated the 2013 budget. In addition, we still have the issue that there were 47 uniformed police in the 2012 township budget and the 2013 budget has the number reduced to 42.  The 42 uniformed police officers is two more officers than are currently in the department.  Now that the police contract is settled, will the supervisors OK the hiring of those two additional officers?

Why Tredyffrin’s Arbitration Award Wasn’t ‘In the Middle’

In the addendum to my previous post, “Tredyffrin Township Police Union Favored in Act 111 Arbitration Award”, I remarked that I had assumed that the independent arbitrator would make his award in the police contract arbitration ‘somewhere in the middle’.  During the arbitration process, John Petersen had assured me that the arbitrator would favor the police union in his decision, and  … we now know that my assumption was incorrect.

In response to my  statement that a “further explanation of the arbitration process would be helpful”, John provided the following opinion for Community Matters:

We are where we are because of what was agreed upon in the past. An arbitrator’s role is to find the most “equitable” solution absent the parties agreeing to such. Normally, there is at least some level of negotiation prior to arbitration. It’s always best if the parties themselves can come to an amicable resolution. While there may be disagreement, when parties can mutually agree, it implies a certain level of functionality as to the working relationship. That doesn’t mean that arbitration itself implies dysfunction. Often, there are some points parties cannot resolve. Again, an arbitrator’s role is to resolve those points in contention – in the most equitable fashion possible.

When I learned that the township refused to negotiate, instead opting for arbitration, in hindsight, I was not surprised. It indicates a level of dysfunction that has become the hallmark of this government. As I have said before, the municipal government, like the school board, sought to claw back everything it has negotiated in the past 20-25 years.

There’s a legal concept in commercial law known as “Course of dealing.” In the absence of a written agreement, courts and arbitrators will look to how the parties dealt with one another in the past. In collective bargaining scenarios, there is of course, a written agreement and there is a clear record of past dealings. Going back to my first sentence – we are where we are because of what was agreed upon in the past. It may be, and actually is quite likely, the municipal government, like the school board, has buyer’s remorse.

Given current circumstances, the benefits conferred upon the union appear to be “too good.” Some will attempt to claim victim status by either blaming Harrisburg or by saying that their hands were tied.

Some here trot out the phrase “Labor peace” in terms of the cost. I like that phrase and I think in Tredyffrin, it applies. Once upon a time, there was a premium on labor peace. There was time that those in charge thought it unseemly that Tredyffrin would be the subject of a strike. Once upon a time, there was at the very least, a cordial working relationship with unions. That however, was a different time and the people were very different.

Other municipalities like Lower Merion apparently had the foresight to negotiate these things in a different way. This means that what is in the “Middle” for one group may not represent the middle for another group. The middle, relative to the facts and circumstances of each situation, is the same for all in that it represents the equitable mid-point for that agreement. When compared to other groups however, the specific data point that represents the mid-point, assuming there could be a normalized scale amongst disparate contracts, would be very different as between Radnor, Lower Merion and Tredyffrin. Nevertheless, arbitrators will look at those other situations as a barometer for what is reasonable.

This gets into another commercial legal concept known as “Trade usage.”  All of this tends to put boundaries on where the result will end up.

When I heard about the time it was taking for this arbitration, the answer was very clear to me. It was interesting to note that some had questioned why the arbitrator in the police matter had not made a decision. I had posed to Pattye the following: “Perhaps the arbitrator is making a decision, by not making a decision.” Pattye asked me to clarify. I said, “It may be that the arbitrator sees as the most equitable resolution something that more closely matches the status quo.” Arbitrators, like judges, would prefer to have the parties themselves arrive at a resolution. In this case, there were two fundamental problems. 1 – The parties were miles apart and 2 – the township government, as I understand it, refused to negotiate and instead, leave its fate to an arbitrator.

Given the experience of the school board and given the general role of what arbitration is, the township’s stance in this matter was rather foolish and a bit disheartening. There’s a bigger problem here – one that cannot be solved with money. I have commented for years how this government does not work together, either as a board, or as to the entities, it has to deal with. We are now seeing this problem expand to other things like the Planning Commission. Governments are top-down organizations. They lead from the top and the top is what sets the example and moral tone for how the rest of the township government operates. The day isn’t long enough to count the problems incident to the staff, volunteer boards and elected officials. The only thing the township government excels at is dysfunction. If that is the “Gold standard” – then Tredyffrin is second to none.

At the end of the day, it was my contention that the Arbitrator was likely, a bit miffed at the township for what was a wholly unreasonable stance – both not willing to negotiate and its desire to end all post-retirement benefits. As sure as I was about the outcome of the negotiations between the school board and the teachers, I as more sure about the police matter. Why? Because of the facts and circumstances here made it clear where the most equitable solution was. Further, Tredyffrin’s situation is not that far out of whack with other jurisdictions.  And where things may be better for the union in Tredyffrin, it’s only because the government agreed to such.

You don’t get t0 wipe away your bad business decisions at the expense of the other party. That’s not how the real world works. It’s not how judges and arbitrators will decide. Unless of course, it finds there was an unfair bargaining position – which in this matter was not the case. It is for those reasons I concluded as such. As to whether Michelle and the board already knew that or not, I don’t know. Speaking as a lawyer, I would have to think that any competent lawyer would know that refusing to negotiate is itself, an unreasonable thing and that an arbitrator may well find that such a position offends the system. I did see the meeting where she said to Pattye that she didn’t know why it was taking so long. Candidly, I chuckled at that response.

In this case, I think Tredyffrin was taken to the woodshed and made an example of. Other municipalities will or at least should think carefully about, following Tredyffrin’s folly strategy in a negotiating strategy that involves not negotiating.

As to the contention that the township’s unfunded liability should have anything to do with the arbitrator’s decision, that is pure nonsense. One has nothing to do with the other. That unfunded liability was an unfunded liability of choice. Those benefits were what were agreed to in the past.  This is more evidence that the township sought to claw everything back in one shot – an unrealistic scenario. I’ve said it before and I’ll say it again, the township’s and school board’s legal guidance leaves a lot to be desired.

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