Sick Leave snapshot Trial info

Recently AFSCME along with our brothers at ASPTEA went to court with the city over the sick leave snap shot imposed on us by the last city manager. This case has been going on for years and we finally had our day in court (okay, 7 days) in front of a judge. This will affect almost every member of every union as well as the retirees. This is literally thousands of dollars per employee in your pension program when you retire. The cost has been great and the time put in by the union staff has been tremendous but it is a good fight and we are in the right!

This is a run down of the court case and the testimony. Thanks go out to Jason Stokes of ASPTEA for this wonderful day by day run down of the court time. Union time was used by all the groups for this case as is current law. Please donate the time given to back to you by the city (8 hours) for union time this July to help us continue this fight and others. Without this time we cannot fight for your rights. This additonal time will show up in your July paycheck and donating it back to us keeps us running.

The Sick Leave Snapshot trial began today. Both sides presented their opening arguments. Retired ASPTEA Secretary Charlene Limbeck testified first, followed by Jason Stokes and then Ron Ramirez. Frank Piccioli (AFSCME 2960), Luis Schmidt, (AFSCME 2384), Colleen Lockwood and Debra Novak-Scott (AFSCME 2960) were expected to testify today. Opening arguments however took most of the day with Ron Rameriz from ASPTEA taking the stand to clearly state that the unions and associations were always united in the opposition to this and that it was past practice for decades.

It began with Ron Ramirez concluding his testimony from the previous day. The next witness was AFSCME Local 2960 President Frank Piccioli. AFSCME Local 2384 President Luis Schmidt followed and testified until the lunch break. Both AFSCME Presidents spoke strongly how this was past practice, how it was reflected not only in the Contract but in the paychecks of people. The also made it clear that the city has always known this was standard practice and that taking it away by an AR was wrong and illegal. When we returned from lunch, Luis’ testimony was placed on hold so that the City could call retired Labor Relations Administrator, Lori Steward. This was necessary as Ms. Steward had to return to San Antonio, Texas where she... is currently a City employee, working for former Phoenix Assistant City Manager Sheryl Sculley. Ms. Steward appears to have benefited greatly from the pensionable sick leave conversion as she testified that she had reached the "2080 Club" several years ago. I found Ms. Steward’s testimony to be very evasive. At one point, the Judge himself asked her direct yes or no questions that she chose to respond to with something other than a yes or no. An observer was overheard to say, “I bet if they asked her name right now, she wouldn’t give it.” The day concluded with Luis back on the stand.

Next to testify was retired Budget and Research Director Kathy Gleason. Ms. Gleason was not nearly as evasive as Ms. Steward. She did claim that she believed that no one had ever approved the sick leave payouts at retirement and that it was, for lack of a better term, an administrative oversight even though she wasn't on the COPERS Board until 1997, one year after implementation. Ms. Gleason, a retiree, stated that it was her opinion that sick leave should never have been pensionable under the charter, but she did not come to that realization until after she retired. She was directly asked why, if she believed this to be an illegal practice, did she vote for a snapshot. In effect continuing, but capping, what she believed to be an illegal practice. Her response was that they were "splitting the baby". Her opinion was that if the practice was eliminated, it would call into question whether current retirees would need to pay back what they had been given. Therefore, the COPERS Board decided not to take that path and just cap the payouts at time already earned. She did admit that the Board could have grandfathered existing employees, but that's not what they chose. Too bad. Had they made that decision, you wouldn't be reading this post.

Our side produced the City's Comprehensive Annual Financial Report (CAFR) which showed that since the implementation of the sick leave payout, when ASPTEA negotiated it, outside auditors hired by the City have not only been aware of the policy but had listed it as a liability. Subsequent CAFR's, not only indicated the addition of the sick leave benefit for the other bargaining units, they detailed the cost and formula used to determine the amount of pensionable compensation from sick leave. It should be noted that the CAFR is signed off by the Finance Director (a COPERS Board member) and received by the City Manager (a COPERS Board member) and presented to the Mayor and Council.

The City attempted to explain that the impact to our retirees was minimal. Being that we filed the lawsuit very shortly after the snapshot was imposed, the only employees Immediately affected were those that had retired in that short window between the effective date of the snapshot and the filing of the lawsuit. However, we were able to show that the pension benefit reduction continues to grow on a daily basis and the more time that passes, the greater the damage becomes.

The next two witnesses were current COPERS Administrator Scott Miller, followed by former COPERS Administrator Donna Buelow. Both provided the expected testimony in support of the snapshot. The day ended with our attorney questioning Ms. Buelow. The examination took an interesting turn when questions regarding changes made to address “highly compensated employees” became the focus of discussion

Her testimony was consistent with every other City witness. Basically, she doesn’t think sick leave should be calculated for anything other than service credit, she had never considered that possibility until her superiors advised her of this in 2012, and subsequently took absolutely no action to make this belief known to anyone once she arrived at this conclusion. Next up was Debra Novak-Scott (2960).

Ms. Novak-Scott, a veteran of more than 2 decades of contract negotiations, PERB charges, grievances, discipline appeals, etc., was a formidable witness for our side. She once again made clear that this benefit was negotiated into our contracts. The benefit came at a cost, it was never negotiated out and the City never provided a credit to the units for removing it. The conclusion of Ms. Novak-Scott’s testimony also represented the conclusion of our case. Next up would be the City’s case.

However, before the next witness could be called, the City’s attorneys requested that the case be dismissed based upon their belief that we have failed to meet our burden of proving our case. That is an extremely brief summary of the 30-minute statement made by the attorney for the City. Of course, facing the possibility of the entire case being thrown out at that moment, we were all holding our breath. Fortunately, Judge Brain took no more than a second to deny the motion, actually disputing some of the claims made.

So with the trial continuing, the City called their first witness, Ms. Lisa Esquivel. Lisa’s testimony was again the standard fare that has been offered by previous City witnesses (Steward, Gleason and Buelow).It did become interesting when a series of questions were asked regarding the Unit 2 and Unit 7 negotiations. The questions were basically whether or not either AFSCME or ASPTEA ever mentioned during negotiations that imposing the snapshot was a violation of their contract, the city charter, the Arizona or U.S. constitution. Ms. Esquivel consistently answered “No”. That was until Judge Brain asked for clarification and cited the City’s own negotiation minutes for ASPTEA; specifically, when Ron Ramirez stated that the actions were illegal and diminished and impaired pension benefits in violation of Arizona’s constitution. Ms. Esquivel’s response was that she didn’t remember that statement but wouldn’t dispute it since it was in the minutes that she had signed as accurate. That was the end of the testimony for the day.

However, some interesting information did present itself. Ms. Smith, consistent with the other city witnesses, stated that her belief was that the payout of sick leave as pensionable income was a mistake. She also stated that she didn’t believe it qualifies as compensation under the charter of the City of Phoenix.

Under cross-examination from our attorney, she admitted that she was aware of her fiduciary responsibility as a COPERS board member. She stated that her fiduciary responsibility required that all COPERS related decisions must benefit the COPERS members. She then admitted that the snapshot would not be a benefit. Considering her position, who her supervisor was, the direction he clearly wanted to take, and that nagging fiduciary responsibility, one can only question if Ms. Smith found herself in a professional/ethical dilemma that I can only see as a conflict of interest.

Ms. Smith testified that she had arrived at the belief that sick leave is not compensation under the City Charter because the charter does not specifically list sick leave as compensation. When asked by our attorney if the charter specifically details all the terms of the pension plan, Ms. Smith answered “yes”. She was then asked to locate in the charter where stand-by pay, call-out pay, tool allowance, uniform allowance, etc., are listed as compensation that is pensionable. Ms. Smith was finally forced to admit the reality that the other city witnesses have avoided. The COPERS Board has the authority to interpret the language of the charter as it relates to the pension. In related testimony, Ms. Smith admitted that the Personnel Rules give the authority of administering the Leave Program (sick and vacation) and compensation to the H.R. Director (Section 8 and 3a.2). So, as the sole individual responsible for administering these programs, she apparently continued a practice she believed shouldn’t have occurred in the first place. Next, Ms. Smith was asked to explain the difference between Administrative Regulations (A.R.’s) and Personnel Rules. Ms. Smith explained that changes to the A.R.’s are the prerogative of the City Manager and changes to Personnel Rules require a public hearing and a vote of the City Council. Ms. Smith then testified that no public hearing or council vote was held to change that Personnel Rule.

The day ended with one final question, regarding compensatory time. For those of you who have never worked for the city in an hourly (non-exempt) capacity, Comp time is available in lieu of receiving pay for overtime or holidays that have been worked. It’s important to remember that up to this point the city has contended that sick leave is not compensation. So with that understanding, Ms. Smith was asked to refer to the ASPTEA MOA, specifically Article 3.4, which also corresponds with A.R. 2.21. Both read that upon promotion from an hourly position to an exempt position, the employee has until the end of the calendar year to either cash out their comp time bank or take the time as leave. If there is any time remaining at the end of the calendar year, that time will convert to the vacation leave bank. If the vacation leave bank is at it’s maximum allowable limit, the time will be converted to sick time. This clearly shows that sick leave is compensation. Unfortunately, the day ended before Ms. Smith had the opportunity to answer this question.

Next was the City’s final witness, Deputy City Manager Rick Naimark. Like Ms. Smith, and the City witnesses who testified previously, Mr. Naimark, also a COPERS Board member (City Manager designee), had never considered the legality of the sick leave payout until his boss, David Cavazos, told him to. Coincidentally, Ms. Smith, COPERS Board member Jeff Dewitt (Finance Director and direct report to Mr. Cavazos), and the City Treasurer, also a COPERS Board member and direct report to Jeff Dewitt, never considered this either. So this epiphany occurred simultaneously for several COPERS Board members immediately following the City Manager’s decision to impose the Sick Leave Snapshot. Our attorneys made several attempts to direct the court to the fact that the COPERS Board appears to be “stacked” in favor of management, but unfortunately each attempt was objected to by opposing counsel as “irrelevant”. What was interesting about all the testimony presented by those COPERS Board members was that while they claim they don’t believe that in 1996 the Board voted to approve the sick leave payout, they also only voted to “acknowledge” Mr. Cavazos’ Sick Leave Snapshot in A.R. 2.441. Attempts to define what it meant to “acknowledge” the A.R. were consistently met with the response that the discussion occurred in Executive Session, and therefore was subject to attorney-client privilege.

What did get on the record was that when Mayor Gordon formed the Pension Reform Committee, consisting of citizens, business leaders, retirees and 1 labor representative, they voted down the “Snapshot” idea and instead recommended to the Council to initiate this change only upon newly hired employees.

Thanks again for everyone’s support. Ultimately this is why employee associations/unions exist. Alone, any one of us would have an impossible task going toe to toe with a Goliath like the City. Regardless of the outcome, I am proud that we have stood together in solidarity to protect our rights, the bargaining process and the promises made to us