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.

Sam Teresi

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.

Jamestown Mayor Sam Teresi (second from right) and police chief Harry Snellings (far right) during the Nov. 26 voting session of the Jamestown City Council, when the council voted 7 to 1 in favor of challenging a recent binding arbitration ruling involving  a contract with the city police union.

JAMESTOWN – As Jamestown City officials await their day in court to challenge a recent binding arbitration decision involving the city police union, a court in another region of the state has already made a ruling in a similar case, favoring the union over the municipality.

Last month the New York Supreme Court 3rd Appellate Division upheld a State Supreme Court decision supporting an arbitration panel’s ruling involving a labor contract dispute between the city of Plattsburgh and its firefighters union, Plattsburgh Firefighters Association Local 2421. According to an article in The Sun newspaper based out of Plattsburgh, a three-member arbitration panel ruled 2-to-1 that the city must pay members of its firefighters’ union $740,000 in backpay and retroactive wage increases.

The Appellate Division decision involving Plattsburgh came more than 18 months after the arbitration panel first directed Plattsburgh to pay the union a 2 percent raise and retroactive payments for wages between 2012-2013.

If the Plattsburgh arbitration decision sounds somewhat familiar to local residents, it’s because a similar scenario is now playing out in Jamestown.

JAMESTOWN CHALLENGES RECENT ARBITRATION RULING

Sam Teresi

In October 2018, a three-member arbitration panel ruled 2-to-1 that the city of Jamestown had to give a 2 percent salary increase for all members of the Jamestown Kendall Club police union for both 2016 and 2017 and that the city had to honor the retroactive increase by mid December 2018.  But in November the Jamestown City Council voted 7 to 1 to challenge the arbitration ruling on the grounds that the ruling violates a state arbitration statute that is supposed to weigh the ability for the municipality to pay (Civil Service Law S 209). According to that section of the civil service law, 70 percent of the arbitration panel’s decision is supposed to be based on the ability to pay by the municipality. Jamestown officials contend the arbitration panel didn’t follow that section of the law – even though in its decision, the arbitration majority opinion specifically stated that they did weigh all evidence and did fact follow the 70 percent statute of state law.

“All the parties agreed that the 70 percent weighting factor in the new statute applied to Jamestown because of Jamestown’s fiscal condition. The statute says that with qualifying financially distressed municipalities, the decision needs to be weighted at a factor of 70 percent on the ability to pay issue,” Jamestown Mayor Sam Teresi said following the November vote.

According to Teresi, if the city honored the arbitration ruling, Jamestown would have to pay about $400,000 just to cover the retroactive payments for 2016, 2017, and 2018. Even more money would have to be paid for 2019, not only because of the compounded police union raises, but also because the city’s firefighters union would also likely see similar raises – due to those two city employee groups have very similar contracts. The firefighters union contract with the city for 2016 and 2017 is also at an impasse.

“Bottom line, the city can’t afford it,” Teresi said in November. “We can’t raise property taxes to pay for an expensive, outlandish award like this. We can’t rely upon other sources of revenue to come in and cover a gap of that amount. And furthermore, the way that it’s going to elevate the base moving forth with future contract negotiations, we simply can’t afford that either.”

PLATTSBURGH ALSO ARGUES 70-PERCENT WEIGHTING FACTOR IN CHALLENGE

The New York Cities Fiscal Stress Test for fiscal year 2017

Similar to Jamestown, the city of Plattsburgh filed an appeal against the 2017 arbitration ruling for its firefighters’ union, sending the issue to the Clinton County Supreme Court. Just like Jamestown, Plattsburgh city officials believed that the arbitration panel didn’t “take fully into account the level of financial distress the city faces,” arguing the arbitration panel was required to factor 70 percent of its final determination based on the city’s evidence of financial distress.

As part of its case, Plattsburgh argued that since the New York State Comptroller’s Office designated the city as being in “moderate fiscal stress” on its most recent Fiscal Stress List, the second-most dire category, it would be unable to pay. Despite that piece of evidence, the arbitration panel ruled it wasn’t enough to stop a raise from taking place. Jamestown doesn’t even appear on the comptrollers distressed cities list so it had to resort to other pieces of evidence – including the city reaching its constitutional taxing limit – to make its case.

In the Plattsburgh appeal, the Clinton County Supreme Court ruled in January 2018 and upheld the arbitration panel’s decision. When the city appealed a second time, the issue was sent to the state State Appellate Division. There, the court felt that it were in no position to second-guess the arbitration panel’s process for weighing the evidence and that it must defer to the arbitration panel, upholding its initial ruling and handing down its decision last month.

JAMESTOWN PAYS $25,000 TO FIGHT ARBITRATION RULING

As for Jamestown, the city council in November approved a $25,000 payment to the law firm Bond, Schonek and King to represent the city in Chautauqua County Supreme Court to challenge the local arbitration ruling. At the time, it appeared Teresi was unaware that the Plattsburgh case was playing out, basing its argument on the 70-percent statute in state law.

“We’re in a little bit of uncharted waters here because the statute is relatively new and this is the first test on what the statue means by 70 percent weighting factor on ability to pay by fiscally distressed communities,” Teresi said in November 2018 after the council voted to hire a law firm to challenge the arbitration decision.

WRFA reached out to Teresi Thursday afternoon for comment regarding the Plattsburgh case but have yet to hear back from him.

Arguments in that Jamestown arbitration challenge could come as soon as next month in Chautauqua County Supreme Court.