Mayor: San Antonio Deal No Guide for Houston FF Contract

After a panel of arbitrators produced a deal that ended San Antonio’s six-year contract stalemate with its fire union, firefighters in Houston saw a potential road map to end their own prolonged logjam with City Hall here.

The response from Mayor Sylvester Turner, however, has been a resounding no.

Turner often cites a downgrade in San Antonio’s credit rating as part of his rationale against the idea.

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That downgrade by Fitch, one of three main credit rating agencies, however, was in response to a voter referendum that gave San Antonio’s firefighters the power to unilaterally send contract talks with that city to arbitration.

The San Antonio deal ultimately produced by arbitration largely was seen as a win for the city. Fitch and S&P Global remain skeptical of the arbitration process, but both have lauded the new contract. S&P Global said it “should help preserve the city’s stable credit quality.” San Antonio’s leaders have welcomed the outcome, and even union leadership has called it a “great deal” — though it fell well short of what they had asked for.

Houston has been in a similar stalemate with its fire union since 2014. The union has used the San Antonio breakthrough to renew calls for Turner to agree to arbitration. Council member Amy Peck echoed that request at a city council meeting last month.

“It solves the problem,” said Marty Lancton, president of the Houston Professional Fire Fighters Association.

The union here does not have the power to force arbitration; in Houston and other cities, the two sides must agree to use the process.

Turner steadfastly has refused.

In addition to the city’s credit rating, the mayor cites concerns about the process itself, saying arbitration would be equivalent to outsourcing one of the city’s primary responsibilities.

“Quite frankly, the people elected me to do my job. They’re paying me to do my job, and not to farm my job out to anyone else,” Turner said. “Even though the end result was fine, when you do binding arbitration you take it totally out of our budgetary process, and you leave it up to someone else to determine the fate of Houston taxpayers. We’re not going to do that.”

The ratings agencies, while positive about the San Antonio deal, share Turner’s procedural concerns.

“I think the issue with arbitration is that is removes the local government’s ability to control their own budget,” said Karolina Norris, associate director on the south local government team for S&P Global.

The Houston Fire Department’s fiscal 2020 budget is $507 million, roughly 20 percent of the city’s operating fund.

Steve Murray, lead Houston analyst for Fitch, said in reference to the San Antonio contract, “I don’t know if we could draw a conclusion from one deal.”

Fitch is owned by Hearst Corp., which also owns the Houston Chronicle.

San Antonio was the first large Texas city to produce a public safety contract through arbitration, a process in which three independent panelists produce a deal both sides must accept. The new, five-year contract gives firefighters a total of 17 percent in compounded pay raises and requires them to pay toward their health care for the first time, offsetting much of the cost for the city. It adds a projected $23 million increase over five years to the city’s $1.3 billion operating fund, which analysts called “minimal.”

Credit ratings affect cities’ ability to finance debt. When they are downgraded, they have to spend more money on financing and less to construct roads, sidewalks and facilities. It is not clear whether San Antonio has suffered financially in that regard. The other two agencies — S&P and Moody’s — maintained the city’s AAA rating when Fitch issued its downgrade.

The ongoing stalemate in Houston means there likely will not be movement until there is more clarity in two active court cases.

Like San Antonio’s union, firefighters in Houston pursued a referendum to give them leverage in negotiations. While San Antonio sought power to send talks to arbitration, Houston firefighters in 2018 went straight to voters for a raise, asking the public to make their pay equal to higher paid police of similar rank and seniority.

Voters approved the measure, known as Prop B, but it was later declared unconstitutional when the police union argued it conflicted with a chapter of the Local Government Code. That portion of state law lays out the collective bargaining process and says firefighters should receive comparable pay to that of the private sector.

The firefighters have appealed that case.

There also is an active case dating back to when the two sides first reached impasse in 2017. The union sued the city, accusing it of negotiating in bad faith.

The city asked a judge to dismiss the suit and was rejected. It has appealed the ruling, asking higher courts to review certain parts of the collective bargaining process.

That is where the union says the city is contradicting itself. In the Prop B case, the city is arguing there is already a process to negotiate pay: collective bargaining. In the impasse case, the city is asking a judge to declare key parts of collective bargaining — the standard of pay and the judicial mechanism to enforce it — unconstitutional.

“They’re arguing two different, legally incoherent opinions,” Lancton said.

The city points to a letter it filed saying it still supports collective bargaining, but the union says the two provisions the city is arguing against represent the heart of the process.

Turner has said he is prepared to return to collective bargaining, and said it is up to the union to agree to that.

The union provided the Chronicle a letter showing it requested collective bargaining on Feb. 7, conditional on the city dropping its appeal in the impasse case or a judge ruling on the matter.

“I’m not going to get into no tit-tat now,” Turner said.

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