RIVERSIDE, Calif. — San Bernardino can reject its current collective bargaining agreement with its firefighters' union, according to a tentative ruling from U.S. Bankruptcy Judge Meredith Jury.
In February, the bankrupt city began requiring its firefighters to contribute to their pensions benefits and moved to change the way it staffs fire stations in order to reduce overtime costs.
The San Bernardino City Professional Firefighters Local 891 objected, saying the city was violating the collective bargaining agreement with the city.
In a tentative ruling, Thursday, Jury said the city could reject the agreement as part of the Chapter 9 bankruptcy process and impose changes to cut costs.
Paul Glassman, a partner with Stradling Yocca Carlson & Rauth who is representing the city, said in court documents the firefighters' agreement is hampering the city's ability to restructure the fire department to achieve lower costs.
Those two issues appear to be the main sticking points in negotiations between the city and the firefighters' union, according to Jury.
She said that the city "proved its prima facie case" that the salaries agreed to under the collective bargaining agreement and the pension contributions are "burdensome to the city," before making her tentative ruling.
"There is was no question that the changes will have a substantial impact on the firefighters, who will have smaller paychecks," Jury said. She added that she was aware the firefighters count on overtime pay as a significant amount of their paychecks.
But the judge also said she doesn't see any other way for the city to come up with the workable plan of adjustment it needs to exit bankruptcy successfully.
"Personnel costs are a significant part of the budget, so the obvious place to make cost savings is in personnel," Jury said. "They have received concessions from the other unions."
She said personnel costs make up roughly 40% of the city's budget.
The city cannot defer infrastructure improvements any more than it has, "so where else are they going to make changes than in modifying how employees are staffed," Jury said. "It seems the only way to arrive at a successful plan of adjustment."
The city has already reached agreements with the California Public Employees' Retirement System and the San Bernardino Police Officers Association. It began negotiations with the bondholders and bond insurers in August.
She also rejected the firefighters union's motion to stay, a request that it file a separate lawsuit in state court.
Jury said federal law trumps state law and she is not going to let state court throw off the procedural timing.
"Where the city charter applies, I think it is cagey and I do think the firefighters have a gripe," Jury said. "But, they could file adversarial proceedings here and I will decide it."
Jury said her final ruling will simply state the city has a right to reject is current collective bargaining agreement; and that she rejected the motion to stay. She has not ruled on the specific disagreements between the city and the union regarding either pensions or overtime pay.
