Alaska News

City labor contracts invalid, report says

A report released Wednesday finds that two union contracts supported by then-Anchorage Mayor Mark Begich and approved by the Anchorage Assembly in late 2008 are invalid.

In March, the assembly hired an independent attorney -- Joe Levesque -- to review the circumstances under which members approved the labor contracts.

In his report, Levesque says there was never confirmation that funds were available to finance contracts between the municipality and the International Brotherhood of Electrical Workers and the Anchorage Police Department Employees Association.

Municipal code states that any resolution passed by the assembly requires prior certification and confirmation that funding is available.

" the time the resolutions were passed, the Anchorage Chief Fiscal Officer did not first certify that the money required for the contract was available and had been appropriated to the relevant fund," according to Levesque's report, which was sent to Assembly Chair Debbie Ossiander on Wednesday.

The last few months have been a raucous time for Anchorage's budget, as Mayor Dan Sullivan tried out various tactics in pursuit of a balanced budget.

In August, Sullivan laid off 27 city employees and said he wouldn't fill another 56 vacant positions. Those laid off included employees of the Anchorage Fire Department and Parks and Recreation Department.

When several city unions voted down the mayor's proposal to cut their work week to 37.5 hours earlier this week, the mayor responded that their choice would force further layoffs and cuts in public service next year.

Better budget news emerged today, however, as the mayor announced in a media briefing that he has balanced Anchorage's 2009 budget. He added that he still expects a $20 million shortfall for next year.

At the same briefing, Sullivan said that in light of the legal opinion that some of the union contracts are invalid, it would be ideal to sit down with these groups and figure out how to find middle ground. He went on to say that no one wants to see this issue tied up in court, and that it would be ideal to identify some kind of solution that avoids litigation and takes into account current economic conditions.

In February, after the contracts were already approved, the city announced that it was projecting a budget deficit of more than $17 million for 2008 and $11 million for 2009, according to the report.

Levesque also noted that the IBEW contract may be "reformed or rescinded" because it failed to provide open competition.

"With the IBEW contract, as written, the municipality is in jeopardy of losing necessary federal funding," his report states. "The city at a minimum should request IBEW consider reforming the contract to comply with federal requirements in order to receive necessary funding."

Assemblyman Bill Starr and other critics have claimed the contracts were overly generous to unions during lean economic times. Among the assembly's concerns is whether the Begich administration provided accurate information to assembly members on how much money was available to fund the contracts before they voted on them late last year.

Speaking about Sharon Weddleton, the city's former chief financial officer, Starr said, "She'll state that you can't certify the funds for years out, but I just wanted to know the numbers for that year."

Starr said Begich and Weddleton conspired to conceal what they knew about the state of the city's finances.

"We can't afford those labor contracts. We don't have the money," Starr said.

In August, Julie Hasquet, spokeswoman for Begich, told Alaska Dispatch that all the information was available to the assembly before members voted.

Today Begich released a statement saying that all contracts submitted by his administration were handled properly, and that the review is a case of lawyers battling over technical issues.

"These contracts were fully examined and approved by a majority of the assembly. As provided by city law, it's now up to the assembly to decide whether to take further action on these contracts," Begich said in the statement.

The police union also weighed in; in a written statement released today, union president Derek Hsieh said, "Our union reached an agreement with the assembly and the Municipality of Anchorage in good faith, and we've been providing the services described in that contract and holding up our end of the deal."

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