Counterfeit COIN - Just the Facts

by Mayor Pro Tem Greg Sebourn, PLS & Council Member Bruce Whitaker

The issue of open negotiations in government finances is nothing new.  In fact, Fullerton considered this at its November 5, 2013 City Council meeting in which the matter was tabled for nearly seven months.

Elected officials have a fiduciary duty to manage your tax dollars and the public has the absolute right to know how and why their tax dollars are being spent.  This right to know is underscored since unionized labor is the single largest budgetary line item for the City and the fact that the City is still operating with a City Council approved (3-2) structural deficit of at least $1.6-million! 

Fullerton taxpayers have a long history of being shortchanged by City Hall.  From illegal taxes to redevelopment waste, Fullerton taxpayers have every reason to question who is proposing to spend how much and on what.  Civic Openness in Negotiations, or COIN, offered a glimmer of hope to Fullerton taxpayers before being surreptitiously replaced with a Counterfeit COIN. 

On June 17 the Fullerton City Council voted 2-3 (Ayes: Whitaker & Sebourn; Noes: Chaffee, Flory, & Fitzgerald) to approve COIN based on the original model approved in other jurisdictions including Costa Mesa.  COIN would have provided a new level of openness and transparency into labor negotiations.  Unfortunately, after that motion failed, three Council Members (Chaffee, Flory, & Fitzgerald) voted to approve an ordinance that gives the illusion of transparency and rigor to a backroom process that has to this day remained secret.

Fullerton’s Counterfeit COIN ordinance lacks the two most critical components that make COIN an effective process for taxpayers and city workers - transparency and accountability.  Supporters of Counterfeit COIN point to the model guidelines “LABOR NEGOTIATION STRATEGIES AND PRINCIPLES” by the Association of California Cities of Orange County (ACCOC).  The guidelines offer up sample language and suggestions for COIN-like ordinances but Counterfeit COIN ignores the first rule of the guideline, Use of Outside Negotiators, as well as the second which calls for use of an independent auditor for financial analysis.

COIN and Counterfeit COIN both have a process for disclosure to the public regarding what the Council and public employee unions have negotiated behind closed doors.  Fullerton’s Counterfeit COIN, however, only applies to written offers.  Further, it does not specify when the details of the proposed agreements, offers, or counteroffers must be made public.  This means there may be countless secret “trial balloons” offered by both sides before settling on written terms.  This is where Counterfeit COIN fails the transparency test.

Accountability is completely absent from Fullerton’s Counterfeit COIN as well.  COIN required that all negotiations and economic analysis were to be conducted by professionals that were not subject to a public pension system and far removed from City Hall.  They are to be independent from the negotiating parties in every way.  Counterfeit COIN offers certain criteria that must be met in order bring in any outside parties. Even if the criteria is met, Counterfeit COIN requires the Council appoint a representative as a representative to the outside Negotiating Team, and further requires that representative be a public employee who stands to benefit by the outcome of the negotiation process.

COIN is really quite simple despite attempts to create the illusion of complexity or difficulty.  There are just three key components of COIN:  Independent Negotiator, Independent Economic Analysis, and Timely Public Disclosure. 

The lack of labor union opposition to Fullerton’s Counterfeit COIN sends the message to taxpayers that this new ordinance brings no substantive changes to the backroom labor negotiations. 

Until a clear majority of the Fullerton City Council is willing to recognize that feathering the beds public employee unions is contrary to their fiduciary duty, Fullerton’s legacy of backroom negotiations lead by city staff to benefit city staff will continue. 

More of the same, same as before.