Tough bargaining: Unionized Santa Cruz city workers face difficulties of affordability, inflation, budgets

Members of SEIU Local 521 gathered outside the Board of Supervisors meeting
(Photo by Kevin Painchaud / Lookout Santa Cruz)

Five months into contract negotiations, the city’s trash collectors, water treatment worker and park maintenance people, among many others, aim for a new contract amid spiraling affordability issues. Are they as far apart as they seem? Might there be a strike?

In January, Santa Cruz County employees narrowly avoided a strike after their union, Service Employees International Union Local 521 (SEIU Local 521), came to a tentative agreement mere hours before the scheduled walkout. The agreement included wage increases totaling 9% across the board for three years.

Now, the city of Santa Cruz and its nearly 600 SEIU members, who provide such services as trash collection, water treatment, parking enforcement, park maintenance and more, aim to complete contract negotiations. They next meet to bargain on July 25, to negotiate a new agreement. The old agreement expired in April, with the two parties agreeing to continue negotiations. The city made its latest offer about three weeks ago.

Lately, SEIU has circulated a petition intended to push the Santa Cruz City Council to “support common-sense solutions” in order to secure a contract, citing poor safety, insufficient job security, and low wages as major ongoing issues. The union is also starting to discuss the possibility of a strike.

The union bargains for a one-year contract that includes a 10% cost of living adjustment (COLA), a meal allowance increase to $23 from $15 and a boot allowance increase to $300. It further asks for a signing bonus of $4,500 for all SEIU members upon contract ratification, and an agreement that employees will no longer pay the 2.5% employer pension contribution effective Jan. 1, 2023.

“We’re looking for a reasonable contract,” Parking Services Supervisor and SEIU Chapter President Ken Bare told Lookout. “We don’t wish the city any ill will, but we need to get a contract that’s livable for us.”

Deputy Santa Cruz City Manager Lisa Murphy said that the city has proposed a compensation package equivalent to a 5.84% total compensation increase. That includes a 3.5% COLA, and a one-time $1,500, in recognition for working through the pandemic.

“This current budget does not have the additional funds available to meet SEIU’s demands,” said Murphy. She contrasts the city’s estimate of what its offer would cost, $700,000 annually, with the cost of fully meeting the union’s proposal. She said that would add about $2.25 million in city expenses.

Clearly, the impacts of COVID stresses, inflation and rising affordability issues make often-difficult labor negotiations harder this year, for both employees and governments. Further, the narrow failure of Measure F, which city voters just turned down by a 50-vote margin, means the city has $6 million — or about 5% of its would-be total budget — less to spend.

A Santa Cruz City Parks and Recreation worker cleans up syringes near the Water Street bridge.
(SEIU Local 521)

What are the issues?

“We want to be treated with dignity and respect, and a portion of that is an actual wage that works to support ourselves and our families in this community that we serve,” said Water Department Engineering Technician and bargaining team member David Tannaci.

“I was born and raised in Santa Cruz, and I love working for the city, but it gets hard,” said Water Department Grade 3 Operator Alberto “Beco” Palomino. “I have to do side work on the weekends to be able to save up any money.”

“[The city’s] offer of 3.5% isn’t coming anywhere close, and as for the remainder of the issues we asked for, the city said they were open to addressing them, but would have the cost subtracted from the 3.5% COLA increase,” said Bare. “They’ve really attempted to make us negotiate against ourselves. That really isn’t fair if they don’t want to negotiate a cost of living.

Along with the COLA increase, employees requested an increase of their current $15 meal stipend and an improved allotment for work supplies, currently set at $175 per year.

“It’s a lot more than $15 for breakfast and for lunch, and if I’m called in at 4 a.m., there’s not a whole lot of places to go get a meal for $15,” said Palomino.

“We’re not asking for much, we just want to have something where we can actually get ourselves a meal while working for the city in a wet trench in the middle of the night,” said Tannaci. “I think that’s well within reason.”

Union members say that they often require specialized equipment to do their job and the expenses allowed are insufficient.

Bare, Tannaci, Palomino
From left to right: Parking Services Supervisor and SEIU chapter president Ken Bare, Water Department Engineering Technician David Tannaci, and Water Department Grade 3 Operator Alberto “Beco” Palomino.
(SEIU Local 521)

“Things like safety boots are expensive, and I believe there was only one model that was under $175 the last time we had to get new ones,” said Bare.

“I just had to get new boots, and I think I came out of pocket $100, and I didn’t get reimbursed for that,” said Palomino. “The boots that would have been covered were not sufficient. Since I work in water, they need to be waterproof.”

“I think much of what we’re talking about are concerns around quality, which then raises concerns about the trust of the community in us as the provider,” said Tannaci. “We want long- term solutions, and we’re tired of them taking their financial angst out on us as a temporary band-aid when in reality the only people suffering are those in our community, and we the workers.”

The Prism of Numbers

In justification of their requests, SEIU members cite numbers showing that the city’s total compensation for all employee groups to be 7% below similar jurisdictions, considering similar structure, population, and budget, as reported in a 2021 city-commissioned study. For SEIU members specifically, total compensation is 8.7% below similar jurisdictions and monthly compensation is 15.3% below.

The city acknowledges that comparison, and says it has made up some of that gap.

“The city has made significant strides toward increasing our competitiveness in the market by raising employee salaries by 10% in the previous contract,” said Murphy, adding that the city also provides an average of $2,800 a month for a family’s medical benefits. “Since the previous compensation study in 2018, the city improved from 14.6% below the market median to 7% below the market median.”

(The study, conducted by Koff and Associates Consulting, states that a classification within 5% above or below median is typically considered to be competitive in the labor market, but that the city adopted its own standard of 10%.)

Supporting its wage demands, the union has cited what it says is a $36 million city general fund surplus at the end of the 2021 fiscal year, with $6.2 million in unassigned funds available. It says that money can be applied to the new contract.

Santa Cruz City Manager Matt Huffaker says that’s not possible.

“The majority of General Fund reserves that SEIU has reported are actually restricted and can only be used for one-time needs like economic emergencies, natural disasters, stabilizing pension costs, and paying for needed infrastructure projects,” he said. “Using these reserves is prohibited and would only worsen our operating deficit.”

For the 2022-2023 fiscal year, the city staff fully depleted the unassigned fund balance, he said.

Huffaker acknowledges both the difficulty of affordability for all wage-earners and further points to budget pressures that increased with the failure of Measure F.

“There’s no question that our community and employees are deeply impacted by the greatest housing and affordability crisis of our generation,” said Huffaker. “With the failure of Measure F, there’s no sugar coating it, we are in a very difficult place.”

Might a strike be on the horizon? Eyes point to the coming negotiation meetings, but the word is in the air.

“The union is democratic, and we are having a general membership meeting where I believe things of that nature will be discussed,” sums up Bare.

Meanwhile, the city’s workers look around and compare what they get to those who do similar work in the region and in the county.

“My brother-in-law is a grade 2 operator in Scotts Valley, and he makes more money than me while in the grade below me,” said Beco Palomino. “One would say, ‘Well, why don’t you go work for Scotts Valley,’ that would be nice, but they don’t have openings like we do.”

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