In the Matter of the Impasse Between))
CITY OF DESERT HOT SPRINGS

)
)
-and)
)
DESERT HOT SPRINGS POLICE OFFICERS )ASSOCIATION))FACTFINDING PANEL'S
FINDINGS, CONCLUSIONSAND RECOMMENDATIONSPERB Case No. LA-IM-153-M

Composition of the Factfinding Panel:
Neutral Chairman:

ROBERT BERGESON, ArbitratorlFactfinder
13351-D Riverside Drive #142
Sherman Oaks, CA 91423

City Panel Member:

DANIEL CASSIDY, Partner
Liebert Cassidy Whitmore
6033 W. Century Blvd., Suite 500
Los Angeles, CA 90045

Association Panel Member:

RALPH ROYDS, President
Public Labor Advisors, Inc.
6285 E. Spring Street, Suite 355
Long Beach, CA 90808

PresenterslParticipants in the Factfmding Process:For the City:LAURA KALTY, Esq.
Liebert Cassidy Whitmore

AMY AGUER, Admin. Services Director
ROBERT ADAMS, Interim City Manager
KENNETH PUN, Managing Partner
The Pun Group Accountants & Advisors
For the Association:

WENDELL PHILLIPS, General Counsel
MIKE V ALENTICH, President
JOSE GUERRERO, Board Member
CORlNN LINDSEY, Treasurer

BACKGROUND
Desert Hot Springs (DHS or City) was incorporated in 1963. Although its approximate 24
square miles were home tojust 16,582 residents in 2000, today the City has about 27,000 citizens.
Notwithstanding such growth, as California cities go, Desert Hot Springs is relatively small.
Regardless, its problems are huge. Among them are a high crime rate and looming fiscal insolvency.
Thus, few factfindings involve circumstances as dire as exist here. Indeed, it is no exaggeration to
say that the very survival of Desert Hot Springs Police Department (DHSPD) is at stake, at least
insofar as what accountants term a "going concern."
The evidence presented to this factfinding panel (Panel) suggests a number offactors havebeen responsible for the City's plight.
First of all, DHS' budget has often been only marginally balanced. For example, the City
came close to filing for bankruptcy a number of years ago as the result of losing a lawsuit which
resulted in a judgment of$2.1 million. Then in 20 12, the City opened a Health and WelIness (H& W)
Center. Although that facility provides some excellent services to the community in terms ofa Boysand Girls Club, the Borrego Coommunity Healthcare Foundation and what is referred to as theDesert Recreation District, as'discussed below, the cost of operation in comparison to the modest
income generated by user fees for such services has been difficult for the City to maintain.
Confusingly, about a year ago, the City paid for an outside audit of its finances.
Notwithstanding the ongoing cost ofoperating the H&W Center, no mention was made in the audit
ofthat burden on the City's general fund. Perhaps that was because during the 2012-2013 fiscal year,
the City obtained $700,000 from the federal govermnent for running the H&W Center. However,that is one-time money whereas the below-articulated difference between the cost ofoperation anduser fees acquired will be ongoing. In contrast to the aforementioned audit, a well-articulated June2013 report(Report) by Urban Futures, Inc. (UFI), with which the City also contracted, was repletewith bad news.
The UFI Report projected that by the end of fiscal year 2013-2014, the City would face abudget deficit of at least $2 million. No evidence was presented to suggest that but for cuts since-2-made, that prognostication was overstated.
Among the problems identified in the Report are that DHS "is primarily a bedroom
community." By that was meant that the tax base enjoyed by peer cities includes a big box store like
Costco or Home Depot or a "flagship" automotive dealership which bringsmuch needed sales tax
revenue whereas DHS is bereft of such a tax producer. Moreover, said UFI, the City has little in theway of economic development programs in the works, a topic which is addressed in more depth
below. Nevertheless, as also discussed in the Report and discussed below, "opportunities" exist forrevenue enhancement through tax increases.
Also identified in the Report is that notwithstanding its fiscal problems, the City's sales tax
rate remains 7.75%, or identical to that of other municipalities not facing a financial emergency andlower than the 8.75%rate charged in Cathedral City and Palm Springs. Forreasons not entirely clear
from the record provided to the Panel, the City Council has opposed the raising ofthe sales tax rate
as a means of reducing the deficit.
With regard to public safety, the UFI Report states that "Given ... our experience with other
Coachella Valley cities, the percent of[the] General Fund allocated to Public Safety is higher in DHS

than the other cities." On the other side of the coin, the Panel would point out that'1arger cities areable to capture economies ofscale and it is beyond dispute that the City has violent crime problems
which may not exist in comparison jurisidictions.
Prior to 1987, the City contracted with Riverside County Sheriff's Office (RCSO) for law
enforcement. What can be assumed to have been community dissatisfaction with that arrangement
led to advent ofDHSPD and with its creation, response times and the number of violent crimes per
Capita have decreased. Accordingly, it is the desire ofboth the City and the employee organization
which represents DHSPD police officers and sergeants, Desert Hot Springs Police Officers
Association (POA), that although a means ofkeeping the City out ofbankruptcy would be abolitionof DHSPD and a return to contracting with ReSO, the primary focus of this impasse resolution
procedure should be to fmd a way to mitigate DHSPD recruitment and retention problems while
simultaneously keeping the City fiscally solvent.
Apparently the City and the POA have never before reached an impasse in negotiations overa memorandum ofunderstanding (MOU). Indeed, pnor to the present bargaining cycle, negotiations-3-

have been a rather perfunctory process, with a fonner City manager and POA representatives sitting
down for a few meetings and arriving at an agreement.
Bob Adams was appointed interim city manager on September 2, 2013 for a period of six
months. According to Adams, upon his arrival in the City, his predecessor infonned him that atentative agreement had been reached with the POA on or aboutJune 25, 2013 which "was not very
costly," an assessment not borne out by the evidence provided to this Panel. l
Whether the POA later asked that the tentative agreement not be brought to the City Council
for approval is at issue but it is undisputed that it never was. Soon after assuming the reins of citymanager, Adams opined that the City could not afford the salary increases set forth in the tentative
agreement and Adams therefore understandably never placed the tentative agreement on theCouncil's agenda for consideration.
On November 19, theCity Council declared a fiscal emergency. The POA has initiatedlitigation contesting the lawfulness ofthat action and subsequent City conduct and urges this Panelto weigh in on those issues. However, we are clearly without authority over such matters.
Continuing with the relevant timeline, on December 5, Adams met with Wendell Phillips,
legal counsel forthe POA, and expressed the opinion that in the absence ofsomething approximating
25% in concessions from the POA, the City would need to declare bankruptcy. A week or so later,
Adams and Management Analyst Jeanine Plute informed the POA that a 22.5% cut to salaries andsimultaneous reductions in "incentives" such as educational achievement stipends and leaveaccruals, including combining sick leave and vacation into "annual leave," would be needed. At its
meeting ofDecember 19, the City Council approved Adams' recommendations and the relevant cuts .

Although the Panel makes no express findings because the scope of its authority does not extend tothat area, for the benefit of members of the public who may read this report, the following should be said.
If verbal reports given the Panel are accurate, among the many problems with the City's pre-20l3120l4
budget has been a tendency to use categorical funds for general fund purposes. The Panel wishes to makeclear there is no evidence whatsoever that any of the participants itt this proceeding were culpable of suchbudgeting tactics. Unfortunately, however, those participants have been left to pick up the pieces and try toright the proverbial ship.
.

-4-

were formally imposed commencing with the pay period which commenced on December 28.'
The parties have not agreed on the exact amount in compensation that the imposed cuts havecost members of the POA bargaining unit. However, the City has presented nothing to rebut the 'POA's calculations that the relevant cuts have cost unit members total compensation ranging froma low of23.85% to a high of44.11 %, with a mean decrease of37.65%.
In addition to such reductions a number of the 34 budgeted police officer and sergeant
positions have since gone unfilled and the 24%-44% reduction in total compensation for unit
members has placed DHSPD in a state offlux from a personnel standpoint. Although the City has
indicated that DHSPD has recently managed to recruit one new officer, the Panel takes the POA at
its word that the considerable reductions in income have not only resulted in several officers leavingI

for comparable positions elsewhere, others are seriously contemplating leaving City employment.

I

As a result ofsuch problems, on February 18, 2014, the state Public Employment Relations!-

I

Board appointed Robert Bergeson to serve as impartial chairmanofthe instant Panel. Daniel Cassidy

Iof the law firm Liebert Cassidy Whitmore was appointed by the City, as its Panel member and theI

POA selected Ralph Royds ofPublic Labor Advisors, Inc. to serve as its Panel member. 3
STATUTORY CPJIERIA PER GOVERMAENT CODE § 3505.4(d)In arriving at their findings and recommendations, the factfinders shallconsider, weigh, and be guided by all the following criteria:(1) State and federal laws that are applicable to the employer.
(2) Local rules, regulations, or ordinances.
2

In addition to cuts previously identified to the POA, the City expanded the salary schedule from five
steps to nine steps, thereby increasing by a few years the time needed for police officers and sergeants toachieve the maximum scheduled salary.

As an additional means ofimmediate salary savings the City also combined layoffs and unfiIling of
vacant positions such that about two-thirds ofmisceIlaneous employees not represented by Teamsters Local
911 are now nonexistent. The latter employees were spared at least temporarily by existence of an MOU
which does not expire until July 1,2014.
3

References to the "Panel" hereinafter refer to all three members exceptto the extent identified in any
concurring or dissenting opinion attached hereto.
-5-(3) Stipulations of the parties.
(4) The interests and welfare of the public and the financial ability of the
public agency.
(5) Comparison ofthe wages, hours, and conditions of employment of theemployees involved in the factfinding proceeding with the wages,
hours, and conditions of employment of other employees performing
similar services in comparable public agencies.
(6) The consumer price index for good and services, commonly known as
the cost of living.
(7) The overall compensation presently received by the employees,
including direct wage compensation, vacations, holidays, and otherexcused time, insurance and pensions, medical and hospitalization
benefits, the continuity and stability of employment, and all otherbenefits received.
(8) Any other facts, not confined to those specified in paragraphs (l) to (7),inclusive, which are normally or traditionally taken into considerationin making the findings and recommendations.

FINDINGS AND CONCLUSIONSThe City's Financial Situation
As of March 25,2014, the City had $194,777 in its general fund. While that might suggest
the City is not as bad offas prognosticated in the UFI Report, the aforementioned cuts to the City's
payroll are in large part the reason for that. Further contributing to keeping the City in the black has
been the one-time federal grant of$700,000 to run the H&W Center, the City's ability to obtain 10%
reductions in contracts from many of the vendors with which it contracts for serviCes and amodification of the conlract the City bas for lrash disposal:which the City agreed to extend foranother decade with the quid pro quo being a one-time payment of $1 million from the disposal
company. However helpful such measures have been, all are mere stop-gap measures which cannot
be expected to continue. Since the Panel basbeen tasked with helping the City maintain a balanced,
budget going forward, the question becomes what measures might enable that to occur.
Can the compensation cuts imposed upon police officers and sergeants be perpetuated? The
answer is they must be viewed as merely temporary. Even in the event the City should prevail in
defending the lawsuit filed bythe POA andthe contested reductions in salary and benefits be deemedlawful in light ofthe circumstances, such cuts have already resulted in a significantreduction in the-6-number of officers employed by DHSPD. Since the community wishes not to return to police
services provided by the-Riverside County Sheriffs Office but rather to retain its police department,
prudent steps should be taken to find revenue to do so.
Police Officer Salaries
The UFI Report states that "It appears that the salary structure for Police Officers in DHS iscommensurate with that in surrounding communities." Of course commensurate means simply
similar and not superior to and that statement was made before the drastic cuts ofDecember 28 were
imposed. Indeed, a careful review ofthe evidence shows that even at the time made, DHSPD officers
at the highest step of the salary schedule were earning slightly less than their peers in comparable
agencies.
No evidence was presented that officers at any ofthe six comparable agencies have, since,
the UFI Report, received any reduction in total compensation and extrapolating from the Report, itis therefore clear that personnel represented by the POA are now vastly underpaid in relation to theirpeers.
At the inception of fiscal year 2013-2014, Indio police officers were earning a top step salaryof $90, 156 per year supplemented by an additional 5% in incentive and longevity pay, for a totalcompensation of$94,664 exclusive ofovertime pay. In Palm Springs, the highest scheduled straighttime paywas $81,672, supplemented by 10% in incentive and longevity pay for a total compensationof$89,839. In Beaumont, the figures were $81,540 plus an additionallO%, for a total of$89,694
annually. For Riverside County deputy sheriffs, the figures were $76,512, plus an additionalll %in incentive and longevity pay, for a total of $84,928. Desert Hot Springs was merely fifth, withtotals of $69,996 plus an apparent average of an additional 17.5% for a total of $73,496. Only
Banning, at $68,664 plus incentive and longevity pay totally $600 per month for total compensationof $75,864 and Cathedral City, at $69,996 plus 5% for a total of $73,496 were lower than DHS.
Thus, the meantotal income ofthe slxjurisdictions believed by Urban Futures, Inc. to be comparable
to DHS was $84,747. Accordingly, even before the December 28 cuts, DHSPD officers were earninga total compensation of$l,360 per year less than the mean of comparable agencies.
Even assuming they have not since received any increase, the conclusion to be drawn is thatDHSPD officers are now earning, on average, I% (the difference between their former compensationand the mean elsewhere) plus 37.65% (the salary cut of22.5% for all personnel plus the average loss
-7-

in incentive pay) tor a total of almost 40% less than their geographically proximate peers. In
combination with the large retention problems DHSPD has been having over the last six months, it

is apparent that the maximum must be done to mitigate that disparity and restore the cuts made. That
is obvious. What is far less clear is where money can be found to accomplish that.
RECOMMENDATIONSAt its meeting of March 4,2014, the City Council voted to place a parcel tax on the June 3,2014 ballot. It was anticipated that had the parcel tax been approved, it would have generated

additional revenue ofabout $3.8 million per year beginning January I, 2015. However, the initiativecame just short ofreaching the two-thirds support requi~ under Proposition 13. Just how informed
the electorate was about the ramifications ofa "No" vote on that initiative cannot be said. However,this report is not merely for the benefit of the captioned parties. As evidenced by the requirement in
Government Code § 3505.5 subsection (a), it was the intent of the state Legislature that reports ofthis nature be made available to members of the public for their review. Consistent with that
directive, the following comments are in order.
The Panel recognizes that Desert Hot Springs is a less affluent community than most on thesouth side ofInterstate 10. Accordingly, it is beyond dispute that the citizens ofDHS are in large partfinancially constrained to keep taxes within moderate amounts. Nevertheless, no community caneffectively function independently ofthe county structure without an adequate tax base and the lion's
share of the evidence presented to the Panel indicates that DHS is suffering from such an infirmity.

As will be seen, in combination with questionable spending, the very existence ofthe DHSPD as a
viable law enforcement entity is in doubt, to say nothing of the very existence of DHS as anincorporated city.
The Panel wishes to stress that partially alleviating the reductions imposed on December 28,
2013 is far more than simply a matter of equity. Indeed, if the City were to make a conscientious
effort to mitigate those cuts it might be seen as a means of holding together a satisfactory core ofsworn personnel superior to the skeletal staffing by RCSO which presumably led to creation of
DHSPD in the first place.
A cost saving option which has been advocated by certain members ofthe POA as a means-8-

ofreducing the drastic cuts made on December 28 is closure ofthe H&W Center. Although the Panelcannot go so far as to recormnend something that drastic, the H&W Center can be seen as one meansof irmnediately addressing the current problem.
As mentioned, however well intentioned creation of that facility was, and it is without adoubt beneficial to the cormnunity, the record makes clear that operation of the H&W Center's
current panoply ofservices at the modest user fees charged is unsustainable. In response to a requestfrom the Panel, the City provided information which shows that during the 2012-2013 fiscal year,
the cost of operating the center was about $99 I ,000. Meanwhile, revenues to fund it totaled only
$811,000. Accordingly, although the H&W Center required a general fund subsidy of "only"$180,000, that figure is quite misleading insofar as $700,000 came from the federal govermnent.
Thus, revenue derived from the center itself was in the amount of only $111,000, or just a fractionof the total cost of operation.·
Perhaps a disparity ofalmost $900,000 per year would not be problematic in some cities ofless than 30,000 which are privileged to house a big box store or a large automotive dealership. If

such a commercial enterprise were located on City land abutting Interstate 1. 0 so residents ofothercormnunities would avail themselves ofits wares, DHS would not be in the shape it is in. However,a small city without the sales tax revenue garnered from such a facility cannot afford to take asignificant amount from its general fund in order to subsidize recreational facilities. As an example,
more than $320,000 of the cost of operation ofthe H&W Center has gone into funding the Boys &Girls Club which pays the City merely $1 per year in rent. Iti. contrast, among the reasons shuttering
the H&W Center seems unduly harsh and unwise to the Panel is the presence therein ofthe medical
clinic run by the Borrego Cormnunity Healthcare Foundation, which includes two medical
examination rooms and four dental stations which help disadvantaged residents obtain important
services which might otherwise be unavailable to them. Nevertheless, the health 1Oundationsimilarly
leases space for just $1 per year as is also the case with the recreation district.
What should be done to lessen the financial bUrden ofoperation of the H&W Center? The.Panel has no specific reconunendation but believes the City must seriously consider increasing theservice fee for its use. Considering that membership in a typical YMCA costs about as much permonth as what is charged by the H&W Center for an entire year, doubling or tripling the user fee-9-would not seem inappropriate. Alternatively, there is the option of some decrease in the amount ofservices to be provided. Or since the Boys & Girls Club makes available recreational opportunities
to children between the ages of 8 and 18 which are typically provided by public school districts.
perhaps Palm Springs Unified School District, which includes the DHS community, could provide
some financial assistance, or at least donate some personnel.
The longer the H&W Center remains a financial draiu on the City's general fund, the greater
the deficit will become and the prospect ofmunicipal bankruptcy should not be taken lightly. As wewrite, only Stockton and San Bernardino ofCalifornia's nearly 500 cities are in bankruptcy. Not only
can the fact of bankruptcy be psychologically damaging to a community, filing for bankruptcy acts
as an additional anchor holding down a city fmancially since bankruptcy requires retention oflawyers to see an agency through the process. Moreover, as evident from San Bernardino, legal costs
can be further aggravated by the need to defend lawsuits filed by such creditors as CaIPERS.
Accordingly, it is the parties' mutual interest to resolve this dispute so as to obviate the needfor further litigation, to say nothing ofadditional animosity which continuation ofthe impasse could
well create. The Panel is awarethat the POA activelysupported the parcel tax. No such evidence waspresented as to the extent of support from the Council but insofar as the Council did not similarly
support that means of alleviating the dire financial situation in which the City fmds itself, to put it
as delicately as possible, that approach appears to have been selfserving and not in the best interests
ofthe community as a whole.
With regard to those members ofthe POA bargaining unit who have not left the City, as the
POA argues, it was not such unit members who determined to stretch the budget to the breaking
point in prior years. But that said, however onerous cuts to police officer compensation have been,those reductions at least allowed them continued employment, an option which has been rendered
unavailable to many other city workers.
Failure ofthe parcel tax sadly necessitates recommending that the POA concede to the cuts
it believes were unlawfully imposed. To do otherwise has the potential ofa Pyrrhic victory for police
officers in that granting them a significantcourt-<1rdered hack payaward could necessitate abolition
ofthe DHSPD in favor ofthe City's contracting with Riverside County Sheriffs Office. That Sl!id,
the POA should not be required to accept the imposed burdensome cuts without a quid pro quo.
-10-

To ~ tho. }lltt'ciel tI!t:Il; fiille4 to Wbl approval
by .IIIl:IC ~ pobUs. It is tll.emtbro,
witbln tho~ of~thatp18cln8 aslmllar iQitia1ive Ob thEl,ba!llJt WOU16ha.vath= opposite
0\ltC0nle.1)l_ s:.uA1lJ!ernotentiJely olear fi:om the reCOrlS provided to the Panel, itisapplUOU\ that

Ill.ildtialiw QOlusivoly llddresslDg law enfofceInent has ~ b-. ftPPtO\'llCl in Dfl88I:t Hot
Sprill,p. To the P4lleJ. thea, a oommitrnOl\t by the CUy CoUMIl to pla.ee such ran il1itfatiw on tho.
NovembcrbaUotend to support ltwo.uld be justilioatlon!or 8J1 ~by the POA to accept, at, le8stt1lroughtbeendofthe2014calendaryear,tbelllltSwbichbetameefJ;ectivaDecembu28,2013
lind to wI.thdmw the pendiD& lawsuit against the City.
, Perhaps the t1lader Ulfght wolid.el' why a ~!mdatio». is Xl'I8de whioh would sole1Ydee/
wlthbLw~ent. The ausweristwooofold. First, thiBpro<:eed.lnaaddre.\Tses solelythePOA.llII.d
not01hcrClll1PlDyees ofPHS. Secon«,so doing would.Mt pmlu4tl ib.e CoIltl.Cil fOl'l:8lc:hlgadditlo.tta1 .
,_to addre$$ ~ probJEl.11lS elsewhete, such lIB in~ the Well tax to the lCVll1 In

Cathedral CitYlIIl.d Palm Springs. for elIJIU1Pl11. 'Or increasing 1lSEll' ~ fur the Health & Welf/uIoI
Con1J:lr. ~ to continUe to balance tlJ$ ~ by cutting services wIthuut ralsIns taXes wm

evei1tua1Iy I.'OSIllt ~ a slml~ City govenuwmt which a:fter half a ~ 'WOUld bo ll.SiIlImo:
1:0 eonc1ude, both parties to this' :6Il:tfuJdln$' ~ must tea1l~ the dl.£B.cult.r t!leir
counterpart is in. If they do ami worlt togethlll: with tbis JepOrt lIB a bllBls ~ ~ of the.Ir
barplrdxIa di~ 1210 Pa.D.el is opthtlistic tbat the City C)f Demt Hot Sprlnp can avo.i.d both
banIauptoy end the need to t'lltUm to police~sbeing provided bytb.eRivcraide S~1l Offic:emthert1Wl.'J)esert Sprlnga 'J.>ol1ce ~The ~ op1rlions afPaml Mmnbers Royds 811d Cassidy fOllow this page.

1M~))'~- ---D,."/rz/,'I:
1(//7/1 ,0=-:;-.=.=:....-::..::'. ~-ii4,k~ .
'J)aW

Dard=-, ",·d." '-~ <A,!E;:~: : " ~;I: :';': :'::-:::',:::::-"""",,_,-11-

City ofDesert Hot Springs and Desert Hot Springs Police Officers Association
PERB Case No. LA-IM-153-M
Desert Bot Springs' Poli~e OroGen Association Concurrence to tbe Factfinding Panel'sFindings, Conclosiops an~ RecommendatioDs

Desert Hot Springs' Police Officers Association Representative to the Factfinding Panel
Ralph Royds
As the Desert Hot Springs' Police Officers Association ("POA") representative to theFactfmding Panel, I concur in whole, to the Factfinding Panel's Findings, Conclusions andRecommendations in the above referenced matter and add the following facts in support
thereof:,

I.

Emergency

1. There was no "emergency.· Long term City fiscal mismanagement certainly, sudden
catastrophic event, no. The City declared a "fiscal emergency" but there Is no legal
authority permitting such a declaration in either the City Municipal Code or statutory
law, case law or PERB case citations. City Municipal Code Article I Section
2.48.010 et al comports with court decisions on what constitutes an emergencyimminent, sudden, unexpected disaster threatening extreme peril to persons andproperty requiring a response that is temooraIY in nature and not continuous. The
City, according to statements made by City officials during this fact-finding, madepermanent colTlpensation reductions to alleViate budgetary shortfalls with no intent
to file for bankruptcy. A former City Manager intentionally, also according tostatements made by City officials to this fact-finding panel, kept the City's true
financial position from the City Council. A March 25, 2014 decision by PERB in
SEIU Local 721 v. Riverside County, PERB Decision No. 2360-M also citing
Sonoma County, infra, as precedent, that economic necessity does not excuse theemployer from the duty to bargain in gool;! faith and declares such a tactic Is a per
se violation, of the MMBA -"As for the County's claim of economic urgency, we
recognize that it, and virtually every other public agency in California was under
severe economic pressure during the period of time encompassed by thesenegotiations. It has long been noted that such economic eXigency provides nojustification for 'suspending the duty to bargain In good faith. (San Francisco
Community College District (1979) PERB Decision No. 105; San Mateo CCD, supra,
PERB Decision No: 94;'Pleasant Valley School District (1985) PERB Decision No.
488. See also, Sonoma County Organization of Public Employees v. County ot
Sonoma (1979) 23 Cal.3d 296, 303-314.)" Simply put, the facts show the City
violated state law under the MMBA duty to bargain In good faith by presenting one
take-it-or-Ieave-it draconian concession proposal to the POA, walked away from ,the ,table, gave no notice of impasse, and then imposed takeaways. This panel,
however, has no authority to decide Unfair Labor Practice issues such as the one
presented here.
2. The City failed to follow Its own impasse resolution procedures. No impasse wasever declared, and from the circumstances, no "constructive impasse" could havebeen inferred. The City's own Employee Resolution Ordinance (ERO) requires a
LA-IM-l53-M Concurrence

Page 1 of3declaration of impasse after good faith negotiations have failed. The City neverprovided the required notice under its own local rules to the POA that negotiations
have failed and impasse would be implemented. There is no factual dispute on thisissue. There is a full body of case law and PERB decisions addressing therequirement to follow local ERO to complete the impasse procedure. Again, thispanel has no authority to decide issues related to an Unfair Labor Practice.
3. The City's "one and done" meeting followed by imposed terms and conditions was afact confirmed by City statements made during this fact-finding process. No "Last,Best Offer" was ever made or inferred. Only two proposals were made, one by theCity and a counter proposal by the POA. City then went to Council and imposed the
reductions.
4. The City's statements made during this fact-finding confirmed the imposed terms
and conditions included provisions that were never previously proposed by the City,
much less negotiated. The 9 Step Pay Table imposed by the City was neverproposed by the City at the bargaining table.
5. The City's CPA Report for the closing FY 2011-2012 was in possession of the City
Council when the ''tentative offer" for a 07-01-2013 to 06-30-2015 successor MOU
was presented to (by former CM Rick Daniels) and ratified by the POA.
6. Former ICM (Interim City Manager) Bob Adams admitted during Fact Finding that noother "offer" of any kind was presented to the POA between the time the City was
notified by Valehlich that the City's "offer" presented by Daniels had been ratified by
the POAon 07-25-2013 until 12-12-2013; that no mention of impasse or unilateral
implementation was ever made to the POA prior to the evening of 12-19-2013,<whenthe Council unilaterally implemented.
7. There was no dispute by the City that the announced 22.5% salary cuts averaged
over 37%, with at leas! two officers receiving over 44% cuts in salary.
8. Amy Aguer, the City's Financial Analyst, stated in Fact Finding that, given the $1 M
payment which will now be received from DVD (the City's the waste managementcompany), the City will end FY 2013-20t4 approximately $1.7M "in the black." Thatamount is more than enough to restore the cuts to POA members.
9. Amy Aguer also stated the City recently hired 2 police officers and was actively
recruiting for 11 vacancies. She also stated some of those 11 vacancies were also
existing when the City declared its 'fiscal emergency" in November 2013. She
stated the City used 18 officers as the critical number to maintain - currently at 21.
10. The $1 million franchise fee from DVD was not disclosed to Urban Futures
BUdgetary Analysis for the June 2013 Update or at the time the City Council
imposed wage reductions on the POA. Folmer C.M~ Bob Adams disclosed during
Fact Finding that contract negotiations with DVD were ongoing regarding receipt of
LA-IM-153-M Concurrence

Page20f3

the $1 million franchise fee at the same time the City imposed wage reductions on
the PDA declaring a fiscal emergency.
11. The PDA was the only r~presentedgroup targeted by the City for contract
concessions - Fi~e contract was not renegotiated or were any other groups.
12. The City did not cite any law or precedent that allows imposition based on potential
budget shortfall with no intent of filing or having actually filed for municipal
bankruptcy. The City confirmed during this fact finding the City did not file forbankruptcy and thus did not prepare the required financial disclosures in preparation
for such a filing.

II. Post Hearing Update
1. The PDA unilaterally endorsed the parcel tax measure that was voted on June 3rd.
The PDA took a public position to endorse the measure and produced its own
literature supporting the measure and took an active role in promoting its passage tothe voters of Desert Hot Springs. There was no known corresponding support fromthe City on the measure. It would appear from the lack of pUblic support by the City
and Council they did not fUlly support the measure. Why not?

Recommendation
I concur with the fact-finding panel findings. It was clear the current City officials
providing statements to the Panel were honest, forthright and well intentioned. It wasalso evident, based upon the information prOVided to the Panel, that prior actions byformer City officials (and perhaps as yet unknown current officials) who had a duty toprovide material information to the City Council arguably failed to do so. The City did
not make any claim during this fact-finding the POA engaged in any wrongdoing prior to,during, or after the City imposed its pay cuts and new working conditions which were
the basis for this fact-finding process.
Considering the facts presented, the positions of the parties, the economic realities of
the City, the conduct the City engaged in by making the unilateral wage cuts, and the
response since made by the PDA to support the' parcel tax measure before the voters inorder to keep the City's effective law enforcement a local matter, the recommendations
made by the Panel Chair are both reasonable and prUdent.

LA-JM-153-M Concurrence

Page 3 of 3

City of Desert Hot Springs and Desert Hot Springs Police Officers Association
PERB Case No. LA-IM-153-M
City of Desert Hot Springs' Concurring Opinion to the Factfinding Panel'sFindings, Conclusions and Recommendations and Dissent to the Concurring Opinion of POA.
Panel Member Ralph Royds
City of Desert Hot Springs' Representative to the Factfinding Panel
Daniel Cassidy
As the City of Desert Hot Springs' ("City") representative to the Factfindirig Panel, I·
concur in whole to the Factfinding Panel's Findings, Conclusions and Recommendations in theabove referenced matter, but note the need for clarification on the following issues:
I.

Findings by Factfmding PanelA.

The City's Financial Situation

While I agree witl,t the Factfmding Panel's finding that the City's financial situation isdire, I disagree with the panel's assumptions regarding the utilization ofthe Riverside County
Sheriff's Office ("RCSO") as a possible option to address the City's dire financial situation. The
panel fmds that the City's "commwrity ...n shes not to return to police services" provided by the
RCSO. There was no evidence presented to the panel, beyond speculation, to support thisfinding. The panel states that RCSO previously provided deficient services to the City when it
last contracted with the City prior to 1987; agam, there was no evidence presented on this issue.
The quality of services that RCSO provided to the City over 27 years ago does not necessarily
accurately depict the quality of servic~s that RCSO can provide the City today. Indeed, RCSO
currently provides quality police services to numerous contract cities and communities in theCity's geographic proximity, e.g. Indian Wells, Palm Desert, La Quinta, Coachella and Rancho
Mirage. Therefore, I believe that the panel's assumptions regarding the implications of theretention OfRCSO are unsupported.

B.

. Recommendations by Factfmding Panel

While I agree with the Panel's ultimate recommendation that the POA concede to theimposed cuts, I believe the Panel also incorrectly assumes that the City and the CoUncil did not as
actively support the parcel tax as the POA. The City and the Council proposed the parcel tax inthe first place, and voted at its meeting of March 4, 2014 to place the. parcel tax on the June 3
ballot. The POA did not decide to support the parcel tax until more than two months later, on or
about May 8, 2014, and less than one month before the election. The Panel notes that noevidence was presented regarding Council support, but the POA provided such evidence over amonth after the factfinding was concluded. The Panel's comments as to the Council's motives
are therefore unsupported and inappropriate.

II.

Concurring Opinion by the DHSPOA Representative to Factfmding PanelI disagree in whole, with the concurring opinion submitted by the DHSPOA representative
to the Factfinding Pane); The concurring opinion includes numerous unsupported allegations
that are not appropriate for consideration by the ·Panel. For example, the concurring opinion
erroneously alleges that the City violated the Meyers-Milias-Brown Act (MMBA), specificallythe duty to bargain in good faith, and that it failed to follow its own imPasse procedures. 1bese
issues are the subject ofpending litigation between the City and the DHSPOA, and are not
relevant to the Panel's findings. The Panel correctly did not address these issues iiI the
Factfmding Panel's Findings, Conclusions and Recommendations.
The concurring opinion also erroneously claims that the City has not cited any precedentor law to support its actions in response to its financial emergency. This claim is disingenuous.
As noted above, the Factfinding Panel was not tasked to makelegal conclusions on whether theparties bargained in good faith under the MMBA. Moreover, the City has, on numerous
occasions, cited precedent and law to support its actions in the pending litigation with the
DHSPOA. Indeed, the Superior Court, County of Riverside, sided with the City in denying the
DHSPOA's request for a preliminary injunction to enjoin the City from millatera1ly
implementing changes in terms and conditions ofemployment for DHSPOA members. The
Court found the City faces the possibility ofdisincorporation and. bankruptcy if it is forced toreverse the actions it took in response to its fmancial emergency.
It should be noted that there are only three groups ofemployees at the City - the POA, theTeamsters and unrepresented employees. The emergency cuts were implemented in December
2013 as to the POA (with an expired contract) and the unrepresented employees; Teamsters was.under a current contract.
Finally, the concurriI;lg opinion makes a highly speculative aSsertion that current andformer City staffmembers did not provide the City Council with all material information when
the Council took action in response to the City's financial emergency. There is no evidence,
beyond speculation, to support this contention. Moreover, the various statements by current andformer City staffmembers during the Factfinding, cited in the concurring opinion, do not support
this contention. Rather, these statements demonstrate that the City's financial situation is
tenuous and fluid, and that its staff members are open and transparent regarding any changes tothe situation.
In conclusion, I respectfully disagree in whole, with the concurring opinion submitted by
the DHSPOA representative to the Factfinding Panel.

---6)!~ ,~~'¥/~~~G\'8~Y":....----;---.--.

,. '. . . .'

"

,

,

".

..-.-._-_.,
"

.'

~'::,

UEBE.f\i C!ls,SHl'f
WHilii,Oll.£, ....,--:--..

, '

,

,

"
"

"

, '

I

.. ."

...:
"

,

..

"

,

. ,'"

.,' ,

'

"

.'

,

"

,

"

"

, '':'

",

.'

.'

~

';

. " .

'. :

..

"

" ."\

.:

...
",

"'

,

,

": .'

, ;'

'.,

",

I'

,..

, "

"

'
"

. ," .

;

...

,

"

~

.~

,

.

..

:. \ . ', : '~'

,

"

.

..

"

.

,,'
'

,

'

.

,"

.r

,

,