Philadelphia firefighters' new contract may throw city into deficit

Posted: July 03, 2012

A LONG-AWAITED contract for the city's firefighters provides raises and protects them from furlough days — benefits Mayor Nutter's administration has been fighting for nearly two years, saying the city can't afford them.

A three-person arbitration panel issued the award Monday. It was the second round of arbitration for the International Association of Firefighters Local 22, after the city appealed most of a previous arbitration award released in October 2010 on the grounds that it was too costly. A Common Pleas judge then ordered the dispute back to arbitration.

Fire union president Bill Gault, who represents the roughly 2,100 firefighters and paramedics covered, praised the award, calling it "fair and reasonable." But the city-appointed arbitrator, attorney Kenneth Jarin, wrote a scathing dissent to most of the award, saying that it would add $74 million in unintended costs in the current fiscal year, "putting the city in an immediate, untenable and illegal budget deficit."

But in the written award, the arbitration panel states that after reviewing extensive testimony, it concluded that the city had the means to "satisfy the cost of wage and fringe benefits in the final award without adversely affecting levels of service." The panel also questioned the city's previous financial projections.

Mayoral spokesman Mark McDonald would not say Monday night whether the city would again appeal, noting that the city has 30 days to respond.

The terms of the new award are very close to the old award. Backdated to July 1, 2009, and running through July 1, 2013, it provides an overall 9 percent pay increase, which the workers would get immediately, protects them from unpaid furlough days and boosts the city's payments into health-care funds for workers and retirees. New hires will have to pay a higher percentage to stay in the traditional pension plan, or can go on a hybrid plan with a lower benefit pension and a 401(k).

The police and fire unions, which can't strike, negotiate through binding arbitration.

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