July 14 -- The San Luis Obispo city firefighters who filed a lawsuit filed in federal court and a formal grievance over alleged miscalculated overtime pay will receive a total of $2,609, according to a proposed settlement agreement coming before San Luis Obispo City Council for approval Tuesday.
The 25 firefighters seeking three years of back wages will each receive varying amounts of compensation up to $603, based on the union’s own calculations. The union’s attorneys and hired experts, however, will be paid a combined $52,449.
Despite the settlement’s very low payout to the firefighters, Jimmy Witt, vice president of International Association of Firefighters Local 3523, said the union is satisfied with the agreement. He said the union settled the lawsuit due in part to the city’s current budgetary constraints and the potential for massive legal fees on both sides.
“We look forward to working more congruently with city leadership in the future, and remain focused on providing the highest level of service to our community,” Witt said Friday.
Relations between the city and the fire department’s rank and file have been strained for several years, highlighted by lengthy labor contract negotiations. Along with the settlement, the resolution going before the council includes a three-year contract good through Dec. 31, 2020, that includes a 1-2 percent cost of living increase over that time as well as a 3 percent increase in employees’ pension contributions.
City Manager Derek Johnson didn’t address the city’s relationship with the union in his response to an email seeking comment Friday, but he echoed Witt’s statement that the settlement allows the city to avoid additional litigation costs. It also achieves the city’s goals of ratifying the union’s overdue contract, allows the city to save money by cutting firefighters’ overtime and will inch the city towards closing a $8.9 million budget gap due to rising pension costs, Johnson said.
Under the terms of the proposed settlement, the city will pay a total of $55,058, which City Attorney Christine Dietrick said will be paid through the general fund. In addition to the firefighters’ payout, $39,650 will go toward the union members’ attorneys, and $12,799 will reimburse the union’s costs for hiring experts to calculate the city’s liability.
The employees’ formal grievance will also be dismissed as part of the settlement.
The union members’ lawsuit alleged the city violated the Fair Labor Standards Act, which states that an employee’s regular rate of pay includes cash payments given in lieu of health coverage. The lawsuit alleges that between 2013 and 2016, the city excluded those payments when calculating employees’ overtime rates.
Witt said that the union was confident that, had they gone to trial, they would have been awarded nearly $100,000 in back pay associated with the city’s alleged overtime pay error.
Shortly after the lawsuit was filed, union members filed the grievance after the city amended its 2016-17 budget to create three additional firefighters positions without meeting and conferring with the union first. The city, however, maintains that staffing levels are within the purview of administration and fall outside the scope of bargaining requirements.
Fire Chief Garrett Olson said at the time that the additional staffing would be cost-neutral as the three new firefighters would work under a proposed Leave Pool Staffing Program that would fill vacancies caused by vacations, sickness, injury or turnover, rather than paying another firefighter overtime to cover the shift.
The city is currently tying to close a roughly $8.9 million budget gap due to a CalPERS discount rate reduction increasing projected retirement costs to agencies across the state.
The city estimates that employee concessions will save the city about $1.9 million by fiscal year 2020-21, according to a staff report.
A Tribune review of records provided by the city in March 2017 showed that overtime pay made up about a quarter of the Fire Department’s total staffing costs over the previous five years.
During that period, total overtime for emergency fire personnel averaged $1.9 million annually. The city’s total annual budget at the time was about $71.3 million.
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