The last time an arbitration panel awarded a new contract to Philadelphia’s firefighters and paramedics, Mayor Michael Nutter’s administration spent about four years fighting it in court.
Conversely, it took the same administration less than a day to accept the latest firefighter and paramedic contract, which a three-member panel of arbitrators released publicly on Friday. The panel even allowed Nutter the honor of announcing the new four-year labor pact, which the mayor did during a hastily called news conference that afternoon. Although the contract covers four years, Nutter said it will cost about $70 million in the city’s five-year fiscal plan.
Nutter readily acknowledged the lengthy history of strife between his administration and Local 22 of the International Association of Fire Fighters over wages, benefits and working conditions. But the sides managed to set aside their differences to reach what the mayor’s office described as “an arbitration award agreement … [that] provides pay increases for union members and critical reforms in the area of health care.”
Local 22 represents about 2,150 active-duty firefighters and paramedics, along with about 2,000 retirees.
“I grant you that this process wasn’t always pretty; in the heat of battle, sometimes things are said,” Nutter said. “But never in any way that disrespected these hero public servants, these were only issues about costs and reforms, the things that we needed to maintain the fiscal integrity of our city.”
“There were hills and valleys in the process. It took 18 months, so there were good weeks and bad weeks,” Local 22 President Joe Schulle said of the arbitration. “But it always remained professional, and that helped the process. The parties were able to compromise on a whole slew of issues.”
Due to the duration of arbitration, the contract takes effect retroactively to July 1, 2013, and covers the period ending June 30, 2017. Local 22 members were awarded a retroactive raise of 3 percent in the first year (concluding last June 30), as well as raises of 3 percent for the second year and 3.25 percent for the third year. The parties will determine wages for the fourth and final year at a future date.
Pensions will remain essentially the same as under the previous contract (which expired on June 30, 2013), but the minimum monthly benefit was increased to $1,000, according to Schulle. Under the former contract, some older retirees were collecting less than $1,000 per month.
In another measure designed to help older retirees, the city will contribute a combined $5.3 million into the Retiree Medical Fund in two payments. All retirees get medical coverage for their first five years after leaving the job. The Retiree Medical Fund benefits certain eligible retirees beyond the five-year window, the union leader said.
Meanwhile, the city will save an estimated $3 million to $4 million on the union’s restructured healthcare plan. Under the old plan, the city paid monthly premiums into the union’s healthcare fund to cover each member. The fund, in turn, paid a third-party insurer for coverage. Now, the union will self-insure its members from a fund that will be funded and guaranteed by the city. An outside company will manage the fund, but the union will have to pay only for services rendered rather than up-front premiums. Philadelphia police adopted a similar health care model in their last contract. Initially, Local 22’s existing fund will foot the bill for the first $15 million in benefits and administrative costs before the city will start its contributions.
“The (legal challenge) of the last firefighter award was driven largely by the health fund’s fairly high costs,” Nutter said. “With these changes, we are taking steps to ensure that this is not the case in the future.”
City Councilmen Ed Neilson (D-at large) and Bobby Henon (D-6th dist.) have both advocated for the firefighters union in its ongoing labor dispute with the administration.
“I applaud Mayor Nutter and Firefighters Local 22 President Joe Schulle for working out their differences and agreeing to a long-term contract rather than battle it out in the court system for years,” Neilson said. “I believe this is a fair contract for both the city and Local 22.”
“By agreeing not to challenge this award in court, the administration has sent a much-needed positive signal for labor relations in Philadelphia, and particularly to the first responders that have worked diligently to keep our citizens safe for so long during this arbitration process without contractual certainty,” Henon said. “,” Henon said.
Other terms in the contract include increases in premium pay, night shift differential pay, clothing allowance, life insurance benefits and legal services benefits. Members with more than five years on the job and those in the DROP program will not be required to live in the city. Commanders will receive compensatory time with the option of “selling” accrued time back to the city. The contract revises the department’s transfer, discipline and grievance policies. ••
