Op-Ed: Dollars and sense and Rye’s non-existent PBA contract

By PETER LANE

Sometime this month, September 2013, a panel of three arbitrators will issue a decision that settles Rye’s open issues with its police employees through the two-year period ending—Are you ready?—Dec. 31, 2010.

The salary portion of the award will, if these arbitrators act in their usual fashion, be fully retroactive.

That is, any percentage of salary increase for the year 2009 will be retroactive to Jan. 1, 2009, and any percentage of salary increase for the year 2010—after the 2009 salary increase has been added into an officer’s 2010 salary—will be retroactive to Jan. 1, 201.

The city will be obligated to pay these increased salaries going forward into the future.

Then, given the way our city manager and some on the City Council—notably outgoing Mayor Doug French and independent candidate for mayor Peter Jovanovich—manage the city’s labor relations with its police department, we will commence another cycle of working without a contract, engaging in costly arbitration and, sometime in the future, getting another decision for the two-year term ending Dec. 31, 2012.

By way of background: Once upon a time, the city and its PBA sat down in a sensible and mutually respectful fashion and negotiated a contract for a five-year term commencing Jan. 1, 2003. The City of New Rochelle recently negotiated a 10-year contract with its police department and Westchester County just entered into a six-year agreement with its police.

So folks, there actually is another model.

Essentially, we can consider the same factors in a negotiation that the arbitrators will consider in rendering their decision. We can look at comparable communities and determine fair and realistic ranges for salary increases, medical payment contributions, pension contributions and benefits, etc. Then we can look the other guy, or gal, in the eye, discuss our side’s concerns and try to reach an agreement with which each side can live. But that has not been the Rye way since the last contract expired at the end of 2008.

Now, even before we consider how the current way of doing business negatively impacts the morale of our police department, it’s hard to see, given the retroactive effect of any award, how the city and we taxpayers come out financially ahead in this local game of “contract hardball.”

On the debit side, we have legal fees that mount up geometrically when labor relations become adversarial. Lawyers tend to put in more time than they do when contracts are negotiated, even before the arbitration process begins. Then, when the process commences, we are paying for not only the litigator who represents us at the arbitration, but for the cost of the arbitrator we selected for the panel of three as well as half the cost of the neutral arbitrator agreed to by both sides.

A source who FOILed the city—What else is new?—claims the city has spent in the neighborhood of $500,000 in applicable legal fees to outside counsel over the past five years. In fairness, some of this would have been spent in the negotiation process and Vince Toomey, the city’s labor attorney, gives Rye the benefit of a very reasonable municipal rate.

Now, as to the credit side of this equation.

Economists have a concept referred to as “the present value of money.” I will not bore you with a formula, but this basic tenet of finance holds that money in hand today—or, in our case, money not currently spent on police salaries and benefits—is worth more than it will be worth in the future. That is because we are able to invest that money, which should enable it to grow into more money two, three or four years from now—and a corollary that inflation will have raised the prices of what we are able to currently purchase with it. I know this implies that each of us is a mini Warren Buffett instead of a person who buys Powerball tickets, but the people who espouse it are economists for goodness sake.

Now for those of you who are still with me after the prior paragraph, we have finally come to the morale component of this policy, a per se negative with any labor force even before we consider it’s not immediately obvious financial costs to our city when applied to the police department.

Cops, like the rest of us, are only human. They like to believe that they should be fairly compensated for their work and that they, and their families, should not have to live with the uncertainty that working without a contract creates. When they believe that their employer is treating them like second—class citizens, their morale suffers. Some of them leave for other police departments; some may call in sick when they would otherwise have worked their scheduled shifts and—a dirty little secret revealed here—their productivity suffers. This results in additional training and overtime costs and—dirty little secret continued—the loss of elastic revenues from diminishing traffic fines. The city has the relevant annual numbers, but, Rye being Rye, we would have to FOIL for them.

Now please come to your own conclusions, but it’s clear to me that the only plus that this Scott Pickup, Doug French and Peter Jovanovich way of doing business has to offer us is the present value of money theory.

And I’m sure that I don’t have to remind anyone how low interest rates have been these past
five years.

Peter Lane retired as the Rye City Court judge and an acting Westchester County Family Court judge at the end of 2009 and is now, among other things, a political consultant.