Fresno must pay $575,000 in back wages to blue-collar workers

The Fresno BeeJune 18, 2014 

In a January 2013 file photo, union representative Marina Magdaleno leads a group into Fresno City Hall carrying signatures for a petition drive against the city's plan to outsourcing of residential trash pickup.

ERIC PAUL ZAMORA — THE FRESNO BEE

Fresno City Hall's failure to invite Marina Magdaleno to a cup of coffee is costing taxpayers hundreds of thousands of dollars.

A state labor-relations board has ordered Fresno to pay an estimated $575,000 in back wages and interest to hundreds of blue-collar workers, saying they were illegally furloughed during the city's financial crisis.

Magdaleno, the blue-collar union's business representative, filed an unfair labor practices claim nearly three years ago. She and the union alleged the city violated state law by failing to "meet and confer" with union officials -- the proverbial cup of coffee -- before imposing a 40-hour-per-worker furlough in the 2011-12 fiscal year.

An administrative law judge and the state Public Employment Relations Board (PERB) agreed. The board's ruling and a settlement between the two sides call for the city to pay wages for the lost week and 7% interest for 18 months.

City Manager Bruce Rudd said the total comes to less than $400,000. Magdaleno said the tab is $500,029 in wages and $75,454 in interest.

Stationary Engineers Local 39 has about 700 members, Magdaleno said. Not all were furloughed, she said.

"We never should have gotten to this point," Magdaleno said. "They did something illegal. They had no right to do that."

Rudd spoke carefully.

"Technically, according to PERB, we should have met and conferred," he said.

There are two pieces to the story.

The city in the 2010-11 fiscal year was, in Rudd's words, "teetering" on the edge of bankruptcy. City officials met and conferred with various unions on furloughs.

City Hall had the authority to furlough certain workers to keep the city afloat. The unions had a right to formally discuss the impact of furloughs with city officials.

The city went through the necessary steps with Local 39 in 2010-11. The city wanted another 40-hour furlough in 2011-12. This time, both sides agree, things were handled differently.

City officials said the union had plenty of warning that a second year of furloughs was coming. For example, the city said everyone knew from the beginning it was thinking about two years of furloughs. This met legal requirements, they said.

There may have been hints, Magdaleno countered, but there was no "meet and confer" for the second year.

Magdaleno and Rudd agree on one point -- the city could have had its way simply by meeting in the prescribed manner, even if it was essentially for show.

Then there's the source of money to make the workers whole.

"I'd wager 90% of that was paid by the enterprise department," Rudd said. "There was very little impact to the general fund."

Enterprise departments such as public utilities (water, sewer, community sanitation, trash, where many Local 39 members work) are funded largely with customer fees. The monthly bill is to cover labor, operations, reserves -- no more, no less. Money from enterprise departments is not to drift into general fund departments such as public safety.

It was the general fund's health that had city officials worried a few years ago. Still, the administration of Mayor Ashley Swearengin insisted that workers in enterprise departments share in the belt-tightening.

Union officials such as Magdaleno said it made no sense to punish the pocketbooks of enterprise department workers when the furlough savings couldn't be moved to bleeding general fund departments.

Enterprise-department accounts are losing the savings City Hall wanted from Local 39 two years ago -- and paying 7% interest, to boot.

The reporter can be reached at (559) 441-6272 or ghostetter@fresnobee.com. Read his City Beat blog at fresnobee.com/city-beat.

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