Mayor Michael A. Nutter finally reacted to pressure brought on him by the City unions, but in a way not to their liking.
His suggested compensation/benefits package for approximately 5,500 City employees falls far short of what the leadership of those unions have in mind and for what they have been waiting for over three years. Nutter knows this, but is adamant. “When I ran for Mayor in 2007, I was very clear about the need for change in Philadelphia. I was not going to kick the can down the road on huge structural budget issues facing this City and that have been facing the City for decades. Namely, the rising cost of pensions and health care costs for our City employees.
“In the last four years, we have decreased the size of government and cut our spending and in very careful ways reduced certain service levels while at all times protecting our most vulnerable citizens. “We currently have a team of outside efficiency experts helping us to find ways to cut the costs of government even more and simultaneously increase our efficiency. I look forward to their report and to implementing many of their recommendations.
“I have been very clear, very straightforward, very direct with the leaders of all four of the unions representing our public employees. The new compensation benefits reform package are for approximately 5,500 City employees, from the non-represented and exempt employees to the first level supervisors in Local 2186 of AFSCME District Council 47.”
Leading the rebuttal is Pete Matthews, head of District Council 33, the City’s largest employee union. He said, “The health-care ‘reforms’ the Mayor wants have already been enacted by DC 33. In fact, we changed our Health & Welfare Fund from fully insured (where the provider carried the risk and we paid a higher premium) to a self-insured plan (where the union carries a greater risk and the cost to maintain benefits is stabilized) two years before Mayor Nutter was able to implement a similar plan in the arbitration award for the police union.
“DC 33 has been able to maintain health benefits for our members on the same level of contributions ($975 per member per month) that the City has been contributing to our Health & Welfare Fund since 2007. We have been absorbing cost increases in health care through prudent cost-saving moves.
“By contrast, the City has been paying much-higher rates during the same five-year period for the non-represented employees. In addition, Mayor Nutter’s demand DC 33 members contribute to their health benefits has also been met with the $50 per-pay-period contribution that our members will make towards maintaining their benefits starting on Nov. 1. That was done in order for us to maintain benefit levels and not have our health fund run by the Mayor, who doesn’t seem to be able to control costs as well as we do.
“Secondly, DC 33 delivered the help the Mayor needed on pensions by doing what he was not able to do alone, getting the Legislature in Harrisburg to pass the pension payment deferral (saving the City $235 million) along with the increase in the sales tax.
“The sales-tax change alone has produced at least $50 million, and counting, in new revenue for the City, and it would not have been enacted by the legislature without the active lobbying support of the City-worker unions.
“And, finally, DC 33 worked with the Mayor in 2009 on work force adjustments, avoiding 200-plus layoffs by reassigning workers to funded positions and then eliminating positions that were not needed. This saved the City an additional $35 million. He has not proposed any layoffs since then because he has been able, with our help, to balance the budget, precluding the rationale for layoffs.
“Thus, along with receiving no wage increases and no additional increases in health-benefit contributions from the City, the union has done quite a bit to assist the City in weathering the biggest financial crisis since the Great Depression. DC 33 and the other City-employee unions have been doing everything possible to enable Mayor Nutter to achieve four balanced budgets in a row, and yet somehow none of that counts.
“The Mayor needs to remember members of DC 33 are all City residents and taxpayers, too. We are not a class apart or immune to the effects of rising taxes – but we have already done our share, and more, when it comes to making sacrifices.
“We will not unilaterally surrender to Mayor Nutter’s unjustified concession demands ignores the significant financial and political support our union has provided the City over the last four years. “It is time for Mayor Nutter to settle a fair contract, one that is not only fair to our members but one that finally reflects our efforts to save the taxpayers significant amounts of money, without going out on strike, and by working cooperatively over the last four years to keep the City government running.”
AFSCME DC 47 President Cathy Scott also deplored the Mayor’s cuts in wages and benefits for non-represented City employees. “What the Mayor is imposing, like a thief in the night, and solely at his whim, is a pay and benefit cut for the vast majority of City employees. For some it is a massive pay cut. It is not something we would negotiate. It is not something we would accept. Shame on the Mayor for doing this to 5,000 hardworking employees who have already gone four years without a pay increase.”
Scott rebuked Nutter’s claim about package links raises and benefit reforms, adding it is “a pay cut, pure and simple.” She explained the 2.5% salary increase is greatly offset by the lost pay and benefits included in the package; the Mayor’s imposition of the ability to furlough workers for 15 days amounts to a 6% pay cut; and the demand that employees contribute a new 1.5% of pay in pension contributions is a 1.5% pay cut. Greatly increased out-of-pocket medical payments of up to $1,200/annually are a $1,200 pay cut as well, she asserted.
“Changes in overtime is a pay cut and may lead to reduced services to at-risk children,” she added. “The attempted unilateral increased payments and reduced benefits for pension benefits for some employees are of questionable legality under Pennsylvania law and will not stand.
“We will explore and employ every legal avenue to ensure that members of AFSCME Local 2186 are protected against this pension benefit grab by Nutter. This whole ‘package’ is a deceit. And it proves the Nutter Inaugural promise of fair payments and contracts for City employees was a fraud.
“You can’t claim to help employees by putting $2.50 in the worker’s right pocket while stealing $10.00 from their left pocket.”
IAFF Local 22 President Bill Gault charged, “The disgraceful sleight of hand that Nutter has pulled off reveals the deep contempt he and his administration have for all City workers, union or non-union. Non-union City personnel didn’t get a raise; they got the shaft.
“We empathize with our union brothers and sisters in DC 33 and 47 who, like us, continue to serve the citizens of Philadelphia in good faith, despite not having a contract for years under this arrogant administration. It’s the genuine hope of the 4,000 active and retired firefighters of IAFF Local 22 that rumors of this Mayor’s desire to take his alleged talents to Washington, D.C. comes to fruition. It may be the only chance this City has to avoid a complete collapse.”