When the new mayor and two City Council members are sworn in to office in January, they'll become part of a politically charged group of elected officials that has been at odds over whether employees or taxpayers have been running City Hall.
Debates over whether Phoenix spends too much on its workforce or whether employee unions wield too much influence will cast the spotlight on the city's labor negotiations with its seven employee unions and associations that begin in January.
Proposals from the candidates to reform pensions, repeal the food tax and cut the city budget could directly or indirectly impact the city's more than 14,600 employees, whose personnel costs comprised roughly 60 percent of Phoenix's $2.41 billion operating budget in the 2010-11 fiscal year.
Earlier this year, City Council members disagreed over whether it was appropriate for city employees to get $30 million in raises and bonuses in this year's budget even though employees agreed to a 3.2 percent cut to wages and benefits in 2010, which saved the city $52 million. The $30 million in merit raises and longevity bonuses were part of previously negotiated labor contracts in place for more than 30 years.
The latest shot at unions came from the Goldwater Institute. A report from the conservative group revealed last week that Phoenix spends $3.7 million in taxpayer money annually to fund union activity and pay for union officer salaries - a practice both mayoral candidates Wes Gullett and Greg Stanton have said should stop.
While negotiations take place between city management and union officials, the new mayor and council will set the policy for how the talks should be handled.
City Manager David Cavazos acknowledges some changes are needed but says Phoenix has been successful during labor negotiations because it traditionally gets buy-in from employees.
"We have a situation where we need to look at how we do things differently moving forward," Cavazos said, adding that the situation is not one of "taxpayers versus unions."
"It's not a matter of if the management is for the public or for the employees. We're for both. It's not a question of one or the other."
The amount the city spends on employees in total is down, largely because of the 3.2 percent wage and benefit cuts negotiated two years ago, but the average cost of keeping a full-time employee on the payroll has increased every year for the past six years. The city's cost estimates factor in not only base wages but also overtime and benefits such as pension payouts, workers'-compensation insurance, health care and uniform allowances.
In 2005-06, the average cost of a single employee, including all factors, was $80,347. For 2010-11, it is estimated at $98,322. Much of that increase has been driven by rising costs of sworn police and fire personnel, whose average salary went up 10 percent from 2008-09 to 2009-10.
In 2005-06, the average base wage for an employee was $50,400 for 15,600 employees. That average wage is now at $60,650 for 14,600 employees for 2010-11.
Gullett said Phoenix management needs to be tougher on the unions and ask for more from the labor contracts because "the economy is in the tank and we can't afford these kinds of things anymore."
Gullett said in the next round of negotiations, he would tell Cavazos to focus on ensuring that pay raises aren't automatically given to employees, eliminating the city's contribution to employee retirement-savings plans that costs Phoenix $30 million to $40 million annually and require that union officers' salaries are paid through membership dues and not taxpayer money.
Stanton has said the city needs to overhaul the public-pension system through negotiations. He agrees that taxpayer money should not be used to fund union activity and union officers' salaries.
"Negotiations going forward will be tough, and many things that people are used to will have to change," Stanton said.
Cavazos believes the city has been tough.
He said he was able to negotiate concessions for the first time in city history last year. City employee groups agreed to the 3.2 percent wage and benefit cuts for two years to save the city $104 million - concessions he said no other major city in the country could achieve at the time.
Critics, however, say those savings are diminished because employees were still allowed merit and longevity bonuses costing the city more than $60 million over two years.
Human-resources director Janet Smith said whether the city asks for more pay cuts will depend on the economy, budget forecasts and policy direction from elected officials. The city is also waiting on the results of a salary and benefits study to see how Phoenix compares with the private sector and other cities when it comes to employee compensation. That study, due in mid-December, will also drive bargaining talks.
Today, Phoenix has seven labor unions and associations representing professionals such as police officers, electricians, secretaries and mechanics. Employees aren't required to join or pay dues, but the contracts they negotiate impact employees regardless of whether they're members.
Frank Piccioli, an officer with the American Federation of State, County and Municipal Employees Local 2960, said people have misunderstood the role of labor unions in Phoenix. The unions are there to protect employees, he said.
For example, when a city employee died on the job, the union worked to secure benefits for the widow left to raise five children alone. The union helped her with the mortgage payment, gas money and electricity bills until her husband's benefits kicked in.
The labor groups also coordinate safety sessions and on-the-job training to prevent the city from facing lawsuits and liability.
He said he takes offense when terms like "union boss" and "union thug" get thrown around because the labor groups representing rank-and-file employees have always worked cooperatively with the city.
Two years ago, when the city asked for 3.2 percent wage and benefit cuts, the unions didn't balk.
"We did everything they wanted," Piccioli said. "Never in the history of Phoenix have the unions given back money, and now it's frustrating to be demonized."
He said the political influence that public-employee unions wield creates a conflict of interest for members of the Phoenix City Council. During election cycles, labor groups offer endorsements and support to candidates that help officials get elected. The threat of losing that political support could cloud their decisions on city business that impacts employees and the public.
City unions and employees are forbidden from endorsing candidates or donating money to political campaigns, but the larger statewide associations representing city unions can. And it is mostly the public-safety associations, not rank-and-file unions like AFSCME, that are more politically active.
The United Phoenix Fire Fighters Association and the Phoenix Law Enforcement Association, for example, can't get involved in the Phoenix mayoral election. But the Professional Firefighters of Arizona and Arizona Police Association have endorsed Stanton for mayor. The Professional Firefighters of Arizona have also created an independent expenditure organization to spend unlimited funds to influence the election.
Pete Gorraiz, head of the United Phoenix Fire Fighters Association, doesn't see a problem with statewide public-safety associations endorsing candidates.
"I don't know why anyone would begrudge us the same opportunity to participate in city politics as the lobbyists, the vendors and the developers do," he said.
Debates over whether Phoenix spends too much on its workforce or whether employee unions wield too much influence will cast the spotlight on the city's labor negotiations with its seven employee unions and associations that begin in January.
Proposals from the candidates to reform pensions, repeal the food tax and cut the city budget could directly or indirectly impact the city's more than 14,600 employees, whose personnel costs comprised roughly 60 percent of Phoenix's $2.41 billion operating budget in the 2010-11 fiscal year.
Earlier this year, City Council members disagreed over whether it was appropriate for city employees to get $30 million in raises and bonuses in this year's budget even though employees agreed to a 3.2 percent cut to wages and benefits in 2010, which saved the city $52 million. The $30 million in merit raises and longevity bonuses were part of previously negotiated labor contracts in place for more than 30 years.
The latest shot at unions came from the Goldwater Institute. A report from the conservative group revealed last week that Phoenix spends $3.7 million in taxpayer money annually to fund union activity and pay for union officer salaries - a practice both mayoral candidates Wes Gullett and Greg Stanton have said should stop.
While negotiations take place between city management and union officials, the new mayor and council will set the policy for how the talks should be handled.
City Manager David Cavazos acknowledges some changes are needed but says Phoenix has been successful during labor negotiations because it traditionally gets buy-in from employees.
"We have a situation where we need to look at how we do things differently moving forward," Cavazos said, adding that the situation is not one of "taxpayers versus unions."
"It's not a matter of if the management is for the public or for the employees. We're for both. It's not a question of one or the other."
Employee costs
In 2005-06, Phoenix spent $1.26 billion on employee costs. That number peaked at $1.54 billion at the height of the recession in 2008-09 and dropped to $1.44 billion in 2010-11.The amount the city spends on employees in total is down, largely because of the 3.2 percent wage and benefit cuts negotiated two years ago, but the average cost of keeping a full-time employee on the payroll has increased every year for the past six years. The city's cost estimates factor in not only base wages but also overtime and benefits such as pension payouts, workers'-compensation insurance, health care and uniform allowances.
In 2005-06, the average cost of a single employee, including all factors, was $80,347. For 2010-11, it is estimated at $98,322. Much of that increase has been driven by rising costs of sworn police and fire personnel, whose average salary went up 10 percent from 2008-09 to 2009-10.
In 2005-06, the average base wage for an employee was $50,400 for 15,600 employees. That average wage is now at $60,650 for 14,600 employees for 2010-11.
Gullett said Phoenix management needs to be tougher on the unions and ask for more from the labor contracts because "the economy is in the tank and we can't afford these kinds of things anymore."
Gullett said in the next round of negotiations, he would tell Cavazos to focus on ensuring that pay raises aren't automatically given to employees, eliminating the city's contribution to employee retirement-savings plans that costs Phoenix $30 million to $40 million annually and require that union officers' salaries are paid through membership dues and not taxpayer money.
Stanton has said the city needs to overhaul the public-pension system through negotiations. He agrees that taxpayer money should not be used to fund union activity and union officers' salaries.
"Negotiations going forward will be tough, and many things that people are used to will have to change," Stanton said.
Cavazos believes the city has been tough.
He said he was able to negotiate concessions for the first time in city history last year. City employee groups agreed to the 3.2 percent wage and benefit cuts for two years to save the city $104 million - concessions he said no other major city in the country could achieve at the time.
Critics, however, say those savings are diminished because employees were still allowed merit and longevity bonuses costing the city more than $60 million over two years.
Human-resources director Janet Smith said whether the city asks for more pay cuts will depend on the economy, budget forecasts and policy direction from elected officials. The city is also waiting on the results of a salary and benefits study to see how Phoenix compares with the private sector and other cities when it comes to employee compensation. That study, due in mid-December, will also drive bargaining talks.
The role of unions
City employee unions and associations have existed in Phoenix since 1975. That is when the city struck a deal with employees to allow the labor groups to form labor negotiations as a trade-off for a no-strike provision to prevent work stoppages or slowdowns.Today, Phoenix has seven labor unions and associations representing professionals such as police officers, electricians, secretaries and mechanics. Employees aren't required to join or pay dues, but the contracts they negotiate impact employees regardless of whether they're members.
Frank Piccioli, an officer with the American Federation of State, County and Municipal Employees Local 2960, said people have misunderstood the role of labor unions in Phoenix. The unions are there to protect employees, he said.
For example, when a city employee died on the job, the union worked to secure benefits for the widow left to raise five children alone. The union helped her with the mortgage payment, gas money and electricity bills until her husband's benefits kicked in.
The labor groups also coordinate safety sessions and on-the-job training to prevent the city from facing lawsuits and liability.
He said he takes offense when terms like "union boss" and "union thug" get thrown around because the labor groups representing rank-and-file employees have always worked cooperatively with the city.
Two years ago, when the city asked for 3.2 percent wage and benefit cuts, the unions didn't balk.
"We did everything they wanted," Piccioli said. "Never in the history of Phoenix have the unions given back money, and now it's frustrating to be demonized."
Politics and unions
Nick Dranias, an attorney and director of constitutional policy at the Goldwater Institute, said he has concerns about the role of elected officials in the next round of labor negotiations.He said the political influence that public-employee unions wield creates a conflict of interest for members of the Phoenix City Council. During election cycles, labor groups offer endorsements and support to candidates that help officials get elected. The threat of losing that political support could cloud their decisions on city business that impacts employees and the public.
City unions and employees are forbidden from endorsing candidates or donating money to political campaigns, but the larger statewide associations representing city unions can. And it is mostly the public-safety associations, not rank-and-file unions like AFSCME, that are more politically active.
The United Phoenix Fire Fighters Association and the Phoenix Law Enforcement Association, for example, can't get involved in the Phoenix mayoral election. But the Professional Firefighters of Arizona and Arizona Police Association have endorsed Stanton for mayor. The Professional Firefighters of Arizona have also created an independent expenditure organization to spend unlimited funds to influence the election.
Pete Gorraiz, head of the United Phoenix Fire Fighters Association, doesn't see a problem with statewide public-safety associations endorsing candidates.
"I don't know why anyone would begrudge us the same opportunity to participate in city politics as the lobbyists, the vendors and the developers do," he said.
-Lynn Bui
*As always, if you locate any Piccioli's Points in your daily searches that I have missed, please send them to me so I can add them!*
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