Will agreement with D.C. 47 serve as a guide for D.C. 33?

Posted: February 28, 2014

PHILADELPHIA Even after a five-year impasse, the tentative contract agreement between the city and AFSCME District Council 47 looks like a classic labor compromise, with both sides gaining and giving ground on different issues.

That makes it a political godsend for Mayor Nutter, who had become the favorite whipping boy for the city labor movement and is still in a standoff with the biggest municipal union, District Council 33.

The city is set to resume negotiations Friday with D.C. 33 and its president, Pete Matthews. The big question facing all sides is whether the D.C. 47 settlement will point the way to compromises that will get the other talks off the dime.

"This is all I'm going to say about that: All contract negotiations are different," Matthews said Wednesday. "Police is different from Fire, D.C. 33 is different from D.C. 47."

Members of D.C. 47 - about 3,600 social workers, librarians, registered nurses, computer technicians, and other white-collar workers - have gone close to seven years since their last general wage increase, in mid-2007.

But over the next three years, they'll see some bigger paychecks.

Under the tentative agreement, awaiting a union confirmation vote next week, they will get a $2,000 signing bonus and three raises in the next three years (of 3.5, 2.5, and 3.5 percent). On top of that, younger members will see their pay levels boosted by five years worth of step increases, and virtually all the older members will get a boost from longevity pay.

The administration estimates the total cost of the package at $122 million over the next five years, an average of $34,000 for each covered member. But the costs are heavily back-loaded, so the next mayor taking office in 2016 will have to come up with more of the new money than will Nutter.

In the end, Nutter's negotiation team relented on two issues it had described as important - a bid to force newly hired members into a hybrid pension plan with lower guaranteed benefits and reduced costs, and an effort to change employment rules to permit furloughs of up to three weeks a year.

On the pension front, the mayor settled for an optional hybrid program, and bigger pension contributions from employees who choose to stay in one of the older, more expensive city pension plans providing more generous, guaranteed benefits.

Shannon Farmer, the city's chief labor negotiator, said the city believed newer, younger employees might be planning shorter municipal careers and be more favorable to the hybrid plan. It combines a lower defined benefit with the employee's own 403(b) investment account (similar to a 401[k]) that is easily portable to another job.

So far, no city employees with a choice have picked the hybrid over a traditional plan, in spite of the higher deductions from their paychecks.

Although Nutter gave up his bid for furlough authority, the administration said the union had agreed to changes in civil service regulations that would facilitate temporary layoffs, essentially the same thing, in the event of a serious budget deficit.

Another compromise dealt with overtime.

The city wanted to pay time and a half for overtime only when employees actually worked more than 40 hours a week, not counting sick days or holidays. The compromise: sick time would not count toward the 40 hours needed to reach overtime; holidays would.

Sam Katz, until this month chairman of the Pennsylvania Intergovernmental Cooperation Authority, the state's financial oversight board, said Wednesday that with D.C. 47, Nutter's strategy of holding firm against a speedier settlement appeared to have worked at a financial level.

"I've always worried there would be a catch-up somewhere, some kind of disproportionate result," Katz said.

The proposed $2,000 bonus struck him as a moderate catch-up, Katz said, along with raises over the next three years, but "in balance, I still think that holding firm will have put the city in a better place."

But he raised another issue: "When people go without a raise for a long time, there will always be a price to pay for morale. What that price will be, I don't know."


215-854-5885 @bobwarner1

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