3 Hard Issues Keep City Labor Talks Stuck

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FINANCE DIR. Rob Dubow is Phila.'s expert on budgetary nuts and bolts. Three key issues thwart settlement of City's public-worker contracts, he said.

FINANCE DIR. Rob Dubow is Phila.’s expert on budgetary nuts and bolts. Three key issues thwart settlement of City’s public-worker contracts, he said.

BY TONY WEST/ Leading negotiators for Mayor Michael Nutter’s turbulent city-worker contracts say they’re willing to return to the table with the unions at any time – but not at any cost.

Three key sticking points in negotiations with the Philadelphia Firefighters & Paramedics’ Union Local 22 and with District Council 33, which represents the City’s bluecollar employees, are pensions, furloughs and health-care contributions, said Rob Dubow, the City’s finance director.

The arbitrator’s award to the firefighters for 2009-12, $200 million, “did not give us ways to control costs, like risk-sharing or furloughs or contributions in health care. It blows a hole in our five-year plan,” Dubow explained. Philadelphia is required by law to present the Commonwealth with a five-year plan for a balanced budget, under the terms of the Pennsylvania Intergovernmental Cooperation Authority Act.

Under the terms of the contract imposed by binding arbitration, “The cost for firefighters’ health care would go from $1,270 per member per month to $1,619 per member per month,” Dubow said. “The City could go to self-insurance, but we only want that if there is sharing of risks and rewards, and we did not get that in arbitration,” he continued.

This is why the City has appealed a Common Pleas Court decision in favor of the arbitration award. The case is now before Commonwealth Court.

Dubow rejected a charge by Herman “Pete” Matthews the City’s rejection of the arbitration award is a maneuver designed to create the appearance of a balanced budget. “We still believe we’ll prevail on appeal,” Dubow said. “However, money is included in plan for raises, but not for health-care increases.”

These three sticking points constitute a “final offer” by the Administration, Dubow said. And they are the same issues that lie at the heart of stalled contract negotiations with the City’s non-uniformed employee unions.

“We agree that employees should get raises but we also want the ability to manage our costs,” he elaborated. So it is with DC 33 & 47.

The City needs to rein in pension expenditures, which have ballooned from 6% to 16%, said Dubow. It wants the right to use across-the-board short-term furloughs instead of layoffs when it seeks to cut payrolls. And it wants an end to the current system of accounting overtime, under which employees who work less than 40 hours a week can still earn overtime pay.

Binding arbitration cannot be used with the City’s non-uniformed workforce, noted Shannon Farmer of Ballard Spahr LLP, the City’s chief negotiator. But in public-sector labor negotiations there is an alternative channel for mediation, she said.

“A mediator appointed by the State Board of Mediation has been involved from the beginning of negotiations,” Farmer said. “There were some discussions about core problems through the mediator but they went nowhere. We put our final offer on the table. We set a deadline and the deadline has passed.”

Matthews has claimed in public that DC 33 is ready to return to negotiations with the City and that the City has not responded. Farmer disputed that claim, however. “DC 33 has never asked the City to resume negotiations. Whenever Matthews has done so in the past, we have done so. But he has not reached out to the negotiating team or to the director of labor relations.”

Sam Spear, the attorney for DC 33, says that isn’t the case. He said he was the one who proposed the state mediator become active this spring, after the City’s “final offer” in January 2013, after Framer had complained she had seen no “movement” in the union’s positions.

“DC 33 has never stopped negotiating,” Spear said. He stated he had left telephone messages with Farmer last week suggesting that the two sides sit down and talk some more.

Farmer said the Administration is willing to reopen talks with both the firefighters and DC 33 “if the parties are willing to have meaningful issues discussed.” But the Administration’s team is holding fast to its bottom-line calculations. If talks with DC 33 were to resume, said Farmer, “We would ask the same questions we have asked before. The union has the City’s final offer. If the union does not change its position, we are at an impasse. If the union is hoping to call our negotiating team back merely so they can be yelled at, we will not put them in that position.”

“We have made our case to the unions,” Dubow said. “We have explained why we’ve made our case and how the unions’ proposals affect their members.”

In the meantime, the City is suing in Common Pleas Court to have its final offer imposed on DC 33. But the State Supreme Court has declined to hear this case on a fast track, so this case is unlikely to be heard in Common Pleas Court until next year.

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One Response to 3 Hard Issues Keep City Labor Talks Stuck

  1. Let what is going on in Detroit be our guide here in Philadelphia. Pension costs are rising as well as the cost of benefits.

    DC 33 and 47 members will have to pay more for these fringe items. Pay raises should be awarded as negotiated but then the city workforce will have to shrink accordingly.

    It should not be the Mayor imposing terms on the unions though. Collective bargaining is an earned right and should ne honored.

    Michael E. Bell
    August 6, 2013 at 2:29 pm

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