Bill Sponsors / Authors:

  Rep. Mary Ann Perez
  District 144

  Sen. John Whitmire
  D - Houston

 

Supporting Documents / Links:

•   Bill Kelly Opposition
  March 20, 2023
•   Mayor Pro Tem Council Member Dave Martin Opposition
  April 25, 2023
•   Finance Director Will Jones Opposition
  April 24, 2023
•   Fire Chief Sam Pena Opposition
  April 25, 2023
•   City Attorney Arturo Michel Opposition
  April 25, 2023
•   Mayor Sylvester Turner Opposition
  May 1, 2023

Senate Bill 736 - Binding Arbitration

As Mayor Sylvester Turner works with Houston City Council to pass the FY 2024 budget, members of the Houston Fire Department are scheduled to receive a 6% raise beginning July 1st.

• That will be the 3rd straight 6% raise given to members of our Houston Fire Department, totaling an 18% cumulative raise over a 3-year period.

Senate Bill 736 will impose additional costs by now requiring mandatory arbitration between Local 341 and the City of Houston for an annual contract. Pay is not the only item subject to collective bargaining, as working conditions are subject to negotiations. Over the last 7 years, the City of Houston has invested over $155 Million in the Houston Fire Department to address firefighter and cadet pay; health and safety needs; equipment and fleet apparatus replacement; and adding additional response units to the emergency response system. All awards imposed by unelected arbitrators would be on top of the 18% pay-raise and impact the city’s ability to fund every other operational and quality of life obligation for the Fire Department.

The City of Houston’s Director of Government Relations, Fire Chief, City Attorney, Finance Director, and Mayor Pro Tem all testified against the measure. The Greater Houston Partnership joined in opposition as well.

Unlike the voter approved mandatory arbitration measures in San Antonio and Austin, Senate Bill 736 does not prescribe standards to be used by the arbitrators in making a decision.  In those cities, arbitrators must and may only consider certain items including revenues available to and contractual obligations of the city and the impact of any arbitration ruling on the taxpayers of the city.

Conditions such as the following should be taken into consideration:

• City of Houston is obligated to pay fire fighter overtime 15% sooner per week than any other municipality in Texas- overtime begins at 46.7 hours weekly instead of the 53 hours weekly threshold that is standard for all other municipal fire departments in Texas. This requires tens of millions of dollars in added overtime obligations each fiscal year.
• The City of Houston has a voter approved property tax revenue cap, and yet the arbitrators are not required to take this into consideration.
• As mentioned earlier, the City of Houston has become a national model in reducing unfunded pension liabilities and increasing funding ratios for pension systems. Changes to current employee compensation will affect pension calculations and yearly payments mandated by state law – but arbiters are not instructed to consider those costs.

The City of Houston offered amendments to the legislation that addressed both the effective date and the financial guardrails for arbiters to consider. Those amendments were not accepted by Senator Whitmire or Representative Perez.

As Mayor Turner stated in his open letter the City of Houston is not against using arbitration as part of the collective bargaining process. The primary opposition was passing a state law that mandates binding arbitration without explicit and reasonable parameters.

Upon passage, the Mayor issued the following statement regarding the permanence of this change:

 “And what everyone needs to understand is that this is not city ordinance that can be changed on a local level if things are doing in the wrong direction. The authors of this bills and placing this is state statute, and the legislature meets every two years. It is difficult to abolish a state statute when it has proven counterproductive.”

The Governor signed the bill on June 2, 2023.