Alameda pays its union dues

2023 was a banner year for organized labor.

First came the auto workers represented by the UAW, who won a contract with the Big Three automakers providing for a series of raises totaling 25 percent over the next four years.  Then came the screen writers represented by the Writers Guild and the actors represented by SAG‑AFTRA, who got new contracts with the Hollywood studios granting pay raises and job protections.

And 2024 isn’t starting off too badly, either, at least locally.  Just ask the Alameda firefighters’ union.

Under a new 24‑month contract between the City and IAFF Local 689 approved by Council on January 16, firefighters’ union members will receive a series of raises totaling 13.5 percent (14.2 percent compounded) over an 18‑month period.  The first raise took effect immediately and, as a result, a top‑tier firefighter’s annual base salary jumped from $117,843 to $122,557, and a top‑tier fire captain’s from $146,180 to $152,027, with much more on the way.

Our readers, even those who get their news from Tik-Tok, probably heard about the UAW contract, which was hailed by President Joe Biden as an “historic agreement,” and perhaps the entertainment industry contracts as well.  But not many are likely to know anything about the IAFF Local 689 contract, since it was done, well, on the QT.

The existing firefighters’ union contract was set to expire on December 19, 2023.  The parties began negotiating for a new MOU in August 2023, and through the end of last year Council discussed the topic in five closed sessions not open to the public.  As she typically does, Mayor Marilyn Ezzy Ashcraft reported only that staff had “provided information” and/or that Council had “given direction to staff” during these closed sessions.

Apparently, the City and the firefighters’ union agreed on terms by year‑end.  Rather than place the item seeking Council validation on the regular agenda, the “agenda‑setting” committee (of which the Mayor is a member) put it on the consent calendar.  At the January 16 meeting, no Council member pulled the item for plenary discussion, and the contract was approved by a 3‑to‑2 voice vote, with Councilmembers Trish Spencer and Tony Daysog registering dissents.  (Ms. Spencer objected to voting on a new MOU before a staff‑promised “consultant’s analysis” of the fire department had been completed; she offered no criticism of the actual contract terms.  Mr. Daysog did not explain his no vote.)

Under the Council Rules of Order, the consent calendar is reserved for “routine” matters.  According to the staff report, the “financial impact” of the new IAFF contract will be approximately $2.2 million in fiscal year 2023‑24 and approximately $2.8 million in FY 2024‑25. The “total cost” is estimated at $5.7 million.  To the Merry‑Go‑Round’s way of thinking, expenses of that magnitude take the matter out of the realm of the routine.

So today we’ll present some information that, had any Council member cared to ask for it in an open meeting, would have enabled the public to assess the consequences of the deal for the firefighters – and the City.

At the end of last year, the firefighters were working under a contract that had been approved by Council in April 2015 (when Marie Gilmore was mayor and John Russo was city manager) and extended in December 2020.

The April 2015 contract provided for annual raises in all but one year from 2015 through 2020, but it contained an unusual feature:  instead of a fixed percentage, the raise would be determined using what the City called the “Balanced Revenue Index.”  This index compared the amount of taxes collected by the City in five categories from one year to the next.  Half of the overall percentage change became the percentage raise for the following year, subject to a minimum and a maximum.

Whether intentionally or inadvertently, the effect of this methodology was to allow an abnormally high one‑time increase in one of the specified categories of tax revenue to influence the amount of the next year’s raise, which then would be incorporated into the salary level going forward.  For example, property transfer taxes went up 22.7 percent between 2014 and 2015, which fed into the 4.36 percent raise paid in 2016 (and which then became part of the base salary to which future raises were applied).

Firefighters’ union members fared quite well under this arrangement.  Here’s a table showing the annual raises from 2015 through 2020, compared to the increase in inflation over the same period (measured by the San Francisco-Oakland‑Hayward CPI‑U):

As the table shows, in four of the five years in which the contract provided for a raise, the pay hike beat inflation.  (On a compounded basis, the total raise, even with the zero year, added up to 20.73 percent compared to a 19.04 percent rise in inflation.)

The April 2015 contract ran through December 2021.  A year before expiration, the firefighters’ union and the City agreed to extend the MOU for another two years – i.e., until December 2023.  The staff report does not disclose who asked for the extension or why, but the timing is notable:  the COVID‑19 pandemic had begun in March 2020, and many cities were threatening to reduce headcount and/or cut salaries to make up for the expected loss of revenue.  Perhaps IAFF Local 689 wanted to avoid the same fate for its members.  In any event, despite an objection by City Treasurer Kevin Kennedy, Council approved the extension by a 4‑to‑1 vote.

Under the extended contract, no raise would be paid in 2021, but the firefighters would get a flat two percent raise in both 2022 and 2023.  So what happened to the BRI?  The staff report doesn’t say, but we recall that someone in City management – we think it was Interim City Manager Liz Warmerdam – had come to realize that determining raises using the BRI formula wasn’t such a good deal for the City after all.  (Ms. Gilmore lost her re‑election bid in 2014, and Mr. Russo resigned to go to Riverside in May 2015.)  The City abandoned the BRI calculation in the contract it negotiated with the Alameda City Employees Association in 2019, and, as far as we know, it has not reappeared in any contract since then.

And now to the present.  The new IAFF contract provides for an up‑front bonus of $1,500 for fire captains, $1,300 for fire apparatus operators, and $1,200 for firefighters, payable immediately upon Council approval of the contract.  It then sets forth a series of four raises paid to all IAFF Local 689 members during the next 18 months:  (1) 4 percent payable immediately upon Council approval; (2) 4 percent payable in July 2024;
(3) 3 percent payable in January 2025; and (4) 2.5 percent payable in July 2025.

Of these four raises, two – the 4 percent raise in July 2024 and the 2.5 percent raise in July 2025 – are described in the MOU as “equity wage increases.”  We were pretty sure that the word “equity” meant something different in a union contract than it does in a “Diversity, Equity, Inclusion, and Belonging” plan, and when we asked City Manager Jennifer Ott for clarification, it turned out we were right.

“Equity’” in the context of a labor agreement refers to “placement of total compensation within the employment market,” Ms. Ott told us.  She explained:

In compensation, one of the most frequent methods of determining a salary range is to look to other cities that employ the same position to see what the “going rate” is for the position in the market in which you are located. In order to stay competitive and to make sure that we are paying employees equitably within the market, the City has used this common practice to determine appropriate wages. In general, when able, the City tries to stay right in the middle of the market in terms of total compensation, which takes not only base salary but other pay and benefits into consideration. When a classification is getting an “equity wage increase,” it means that their total compensation has fallen below the median or middle of the market and the increase is to bring them up to that middle point.

(We asked Ms. Ott to send us any recent survey done by or for the City of firefighter compensation in other jurisdictions, but we did not receive anything by publication date.)

The percentage increases set forth in the new IAFF contract apply to the base salary earned by union members at each “step” in the salary scale.  (There are seven steps for “firefighters,” one for “fire apparatus operator,” and three for fire captains.)  But Alameda firefighters usually also earn significant overtime pay.  During 2022, for example, one fire captain earned $106,555 in overtime; a fire apparatus operator made $62,090; and a firefighter pulled down $76,509.  Overtime is compensated at one‑and‑a‑half times the regular pay rate, so increasing the base salary also increases overtime earnings even if overtime hours remain the same.

Moreover, every Alameda firefighter is required to be an Emergency Medical Technician, and, as such, receives additional compensation equal to 4 percent of “top‑step” firefighter pay.  And if the firefighter gets a paramedic’s license, the bonus rises to 12.5 percent of base salary.  Fire Chief Nicholas Luby told us that 52 employees currently have paramedic licenses, so roughly half of the sworn workforce qualifies for the full paramedic differential.

In addition, the new IAFF contract provides for additional compensation for certain jobs:  firefighters assigned to ambulances get a bonus of 7.5 percent of “top‑step” firefighter pay, and firefighters assigned to the CARE Team get a 9.5 percent bonus.  This extra pay is computed on an hourly basis and covers only the hours actually worked in the assigned job.  Chief Luby told us that the total additional cost of the CARE differential under the new contract is estimated to be $27,000.

Since all of the foregoing differentials are applied to base salaries, the raises provided by the contract result in higher supplemental pay as well.

Finally, the IAFF contract also provides for “incentive pay” for firefighters who qualify for a three-level “career development incentive program.”  (As we recall, this, too, was a Russo invention.)  The new contract removed years of service as a requirement for each level and increased the percentages for the basic and intermediate levels.  The “awards” are paid at the rate of 4 percent of base salary for Level I, “4% plus 5% (compounded)” of base salary for Level II, and “4% plus 5% plus 5% (compounded)” of base salary for Level III.   Again, when the base salary goes up, the incentive pay does, too.

Chief Luby told us that 100 fire department employees – virtually the entire sworn workforce – currently are getting career development incentive pay (56 of them at the highest level).  The total cost of the program under the new contract is $1.4 million per fiscal year.

Perhaps a hypothetical example will illustrate the overall impact of the new IAFF contract.  We worked with Human Resources Director Jessica Romeo to prepare a table showing what a firefighter who was hired in June 2021 and has a paramedic’s license would have earned in December 2023 under the prior contract and will earn in July 2025 under the new one.  (In both cases, the total does not include overtime pay or any ambulance or CARE team differential.)  Here’s the result:

In the unlikely event that the firefighter was assigned exclusively to an ambulance crew for the entire year, he’d get an extra $8,838.21 under the prior contract and $10,092.35 under the new one.  In the equally unlikely event that the firefighter spent all of his hours on the CARE Team, he’d get an extra $8,838.21 under the prior contract and $12,783.68 under the new one.

(Readers can get a more detailed version of Ms. Romeo’s analysis by clicking the link below.)

Bottom line:  In fewer than two years, our hypothetical firefighter will get a pay increase of at least $35,000.  A portion of this, of course, is a result of the additional time in service – but the rest is attributable to the new contract.

Years ago, IAFF political director and then president (and now deputy fire chief) Jeff Delbono used to insist that Alameda firefighters were grossly underpaid compared to their counterparts in other jurisdictions.  A handful of tight‑fisted Alamedans maintained, with equal vehemence, that our local firefighters were grossly overpaid.  We have no desire to get in the middle of that debate.  Instead, we’ll note that President Biden frequently declares that government should focus on creating, in his phrase, “high‑paying union jobs.”  Given the new IAFF Local 689 contract, maybe the President ought to hold his next campaign rally in front of Alameda Fire Station No. 1.

Full hypothetical salary analysis:  Revised_Hypothetical firefighter salary