City Public Service Board of San Antonio

312 DECISIONS OF NATIONAL LABOR RELATIONS BOARD The City Public Service Board of San Antonio and Association de Obreros Mexico-Americanos, Peti- tioner. Case 23-RC-3678 June 7, 1972 DECISION AND ORDER BY CHAIRMAN MILLER AND MEMBERS JENKINS AND PENELLO On August 26, 1971, the Associacion de Obreros Mexico-Americanos (herein called the Petitioner) filed with the Regional Director for Region 23 a petition alleging that a question affecting commerce existed concerning the representation of employees of the City Public Service Board of San Antonio (herein called the Employer) and requesting an investigation and certification of representatives pursuant to Section 9(c) of the National Labor Relations Act, as amended . On August 30, 1971, the Regional Director administratively dismissed the petition on the ground that the Employer was a political subdivision rather than an employer within the meaning of Section 2(2) of the Act. Thereafter, the Petitioner filed a request for review with the National Labor Relations Board. On October 27, 1971, the Board issued an order concluding that the request for review raised substantial and material issues which could best be resolved after a hearing, reinstating the petition, and directing a hearing. Pursuant to notice, a hearing was held before Hearing Officer Michael Dunn . At the close of the hearing, the Hearing Officer , by direction of the Regional Director for Region 23, transferred this case to the National Labor Relations Board for decision . Thereafter, the Petitioner, the Joint Interve- nors, ) and the Employer filed briefs,2 and the Joint Intervenors filed a reply brief. Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the National Labor Relations Board has delegated its authority in this proceeding to a three -member panel. The Board has reviewed the rulings of the Hearing Officer made at the hearing and finds that they are free from prejudicial error. They are hereby affirmed. Upon the entire record in this case , the Board finds: The Employer is a public utility engaged in the distribution of gas and electricity to customers in San Antonio, Texas, and certain surrounding areas. It is a nonprofit organization and pays no dividends. Prior to 1942, San Antonio's gas and electric systems were operated by a privately owned utility , the San I International Brotherhood of Electrical Workers, Locals 500, 831, and 1019, AFL-CIO, were permitted to intervene jointly on the basis of a showing of interest Antonio Public Service Company. In 1942, the City of San Antonio purchased the gas and electric systems under an "Ordinance and Indenture," passed by the city commission, authorizing the issuance of $35 million in revenue bonds to acquire all of the property owned by the private company. This ordinance and indenture was superseded in 1951 by a trust indenture, passed by the city commission, authorizing the issuance of $26.3 million of City of San Antonio Electric and Gas Revenue Refunding Bonds to refund the bonds issued in 1942. This indenture, under which the City Public Service Board now operates, was similar to the 1942 indenture but also authorized the issuance of improvement revenue bonds to finance improve- ments and extensions of the gas and electric systems. Such bonds have been issued under a number of supplemental indentures passed by the city council, which replaced the city commission as the governing body of San Antonio. The bonds were secured by mortgaging the various properties owned by the Employer and described in the indentures; the mortage deeds refer to the city of San Antonio as the owner of the properties. The indenture provides that the Employer is to be operated by a board of trustees, which is "vested with all of the powers of the City with respect . . . to" the management and operation of the gas and electric systems and the expenditure and application of the revenues therefrom, and "may manage and conduct the affairs of the systems with the same freedom and in the same manner ordinarily employed by the Board of Directors of private corporations operating properties of a similar nature." The indenture states that certain actions are to be taken by "the Board of Trustees" and others by "the City, acting through the Board of Trustees." There are five members of the board of trustees, four elected for 5-year terms who may be reelected once and one, the mayor of San Antonio, ex officio. The mayor receives no additional compensation for serving on the board of trustees; the other trustees receive $2,000 per year, except that the chairman receives $2,500. The original trustees, other than the mayor, were appointed by the city commissioners, and their names were set forth in the indenture. Since that time, all vacancies have been filled by vote of a majority of the remaining trustees; approval by the city council is not required but has been obtained as a courtesy. Trustees other than the mayor may be removed for cause by unanimous vote of the other trustees. The board of trustees administers the gas and 2 The request of the Petitioner and the Employer for oral argument is hereby denied, as the record, including the briefs, adequately presents the issues and the positions of the parties. 197 NLRB No. 48 CITY PUBLIC SERVICE BOARD OF SAN ANTONIO electric systems in essentially the same manner that a private corporation is administered by its board of directors. It meets once a month for about an hour to decide general policy questions, while day-to-day administration is in the hands of a general manager appointed by the board. These board meetings are open to the public, as required by statute. The Employer's records are considered public records, and the city council has the right to inspect the Employer's books at any time. The indenture requires the Employer to submit an annual financial report to the city. This report includes an audit by a nationally known firm and is published in a newspaper of general circulation. The Employer also gives the city council copies of its budgets, but approval by the latter is not required. The Employer does its own purchasing, and can spend money for any purpose authorized by the indenture. However, if the Employer needs more funds, it must ask the city council to issue bonds. The Employer bills customers for gas and electric services and collects fees for garbage picked up by the city; it retains all funds in bank accounts under its own name, except that the revenue from garbage collection goes into the city's general fund. The Employer pays no income taxes or real estate taxes. Under a 1960 amendment to the trust indenture, however, the Employer must pay the city 14 percent of its gross revenue each month in lieu of taxes. Part of this payment is in the form of gas and electric services and installation of street and traffic lighting systems; the remainder is in cash. The Employer enters into contracts in its own name. It has title to personal property, which it buys and sells as it wishes. However, title to real property used by the Employer is in the name of the city, and such property may be sold only when the city council passes an ordinance authorizing such sale. Revenues derived from the sale of real property go into the Employer's general fund. The Employer has the power of eminent domain, and may condemn property belonging to the State or its political subdivisions, but the city, not the Employer, obtains title to property acquired by condemnation. Its power in this respect is unlike that of privately owned utilities in Texas, which have the power of eminent domain but may not condemn the property of the State or its political subdivisions. The Employer cannot sue in its own name; it brings condemnation suits in the name of "The City of San Antonio, acting by and through the City Public Service Board of San Antonio." The statute of 3 The hearing was held before the enactment of the Equal Employment Opportunity Act of 1972, which makes States and their political subdivi- sions subject to Title Vl1 of the Civil Rights Act of 1964 4 A three fudge U S district court upheld this statute in a suit brought by 313 limitations has been held inapplicable in suits by the Employer, while a statute requiring that notice of intent to bring a claim against the city for personal injury be given within 90 days of the injury has been applied to suits against the Employer. If the city council were dissatisfied with the Employer's operation of the gas and electric systems, it could call a referendum to approve the issuance of general obligation bonds to refund the bonds which finance the operations of the Employer. This would amount to abolishing the City Public Service Board. The officials of the city would then decide whether to operate the gas and electric systems directly, create a new structure to operate them, or sell them to a private company. The Employer's board of trustees determines the terms and conditions of employment for all employ- ees without obtaining the approval of the city council. The employees are not subject to the jurisdiction of the city's civil service commission; and are hired by the Employer's employment department, rather than by the central personnel office which hires municipal employees. The Em- ployer has its own recruitment program and has advertised job openings in The Wall Street Journal under its own name. The employees are paid by the Employer. They have a separate retirement plan, a separate health insurance program, and their own credit union, and must follow a grievance procedure applicable only to employees of the Employer. They are not covered by the state workmen's compensa- tion law, but are covered by social security, the Employer having elected to withhold and pay social security taxes in 1957. The Employer does not file reports under the Fair Labor Standards Act. It files annual reports with the EEOC, giving the breakdown by race, ethnic background, and sex of employees in various job categories, but at the date of the heanng3 was not required to file such reports. Although a Texas statute prohibits political subdivisions from bargaining collectively or entering into collective- bargaining contracts with labor organizations,4 the Employer has held periodic meetings with represent- atives of the Joint Intervenors for many years. At these meetings, wages and conditions of employment are discussed; the current working conditions are set forth in an unsigned memorandum of agreement. In an agreement signed by the Employer's general manager and assistant general manager and repre- sentatives of the Joint Intervenors, the general manager agreed to recommend certain changes in wages and working conditions to the board of members of the Petitioner employed by the Employer Alan,z v City of San Antonio, Civil Action No SA 70 CA 304 (W.D Tex.), decided September 21, 1971 314 DECISIONS OF NATIONAL LABOR RELATIONS BOARD trustees. This agreement provided fora reopening of discussions "for the purpose of considering the request for `dues checkoff' and `exclusive bargaining rights.' " The Petitioner and the Joint Intervenor contend that the City Public Service Board is an "employer" within the meaning of Section 2(2) of the Act. The Employer contends that it is an agency of the city of San Antonio and is thus exempt from the Board's jurisdiction as a political subdivision of the State of Texas. We find merit in the Employer's contention. The Board has held that the "political subdivision" exemption in Section 2(2) of the Act encompasses entitles which are either created directly by the State, or administered by individuals who are responsible to public officials or to the general public. In the instant case, the Employer was created by a city ordinance enacted pursuant to a state statute specifically authorizing home rule cities to acquire and operate gas and electric systems. Its operations were financed initially by bonds issued with the approval of the city commission,' and are still financed in part by additional bond issues requiring the city council's approval. The city council, by calling a referendum to refund those bonds and issue new ones, could abolish the Employer. In addition, the original trustees were appointed by elected public officials-the city commissioners-and were vested with the powers of the city with respect to the management and operation of the gas and electric 5 N L R B v Natural Gas Utility District of Hawkins County, Tennessee, 402 U S 600 systems. An elected public official-the mayor-is an ex officio member of the board of trustees. It is thus apparent that the Employer satisfies the criteria established by the Board for determining political subdivision status. We note, in addition, that a number of factors considered by the Supreme Court in the Hawkins County cases are also present here: the Employer has the power of eminent domain and can exercise it against governmental entities; it pays no income or real estate taxes, and income from its bonds is exempt from taxation; its records are public records; its trustees receive nominal or no compensation; and coverage of its employees under social security is voluntary rather than mandatory. Furthermore, the Employer can sue or be sued only in the name of the city; the title to the real property it uses is in the name of the city; and the sale of such property requires the approval of the city council. The factors relied on by the Petitioner, including the Employer's autonomy in day-to-day operations and in labor relations, are not controlling.6 As we have concluded that the City Public Service Board is a political subdivision exempt from the coverage of the Act, rather than an "employer" within the meaning of Section 2(2) of the Act, we shall dismiss this petition. ORDER It is hereby ordered that the petition filed herein be, and it hereby is, dismissed. 6 Hawkins County, supra, Fayetteville-Lincoln County Electric System, 183 NLRB No. 19