Northeast Times

Fueling the fire

A look back: An­nmar­ie Mc­Get­tigan joins about 100 pro­test­ers out­side the re­open­ing ce­re­mony for En­gine 38 in Ta­cony in Janu­ary. TIMES FILE PHO­TOS

Phil­adelphia fire­fight­ers uni­on Pres­id­ent Bill Gault held the at­ten­tion of an en­tire city, but for the first time in a long while, did not use it to ad­mon­ish May­or Mi­chael Nut­ter.

Out of re­spect to fallen Fire Capt. Mi­chael Good­win, Gault did not rant about Loc­al 22’s un­ful­filled labor con­tract. Speak­ing in front of Good­win’s Park­wood home on April 8, two days after the cap­tain lost his life in a South Philly blaze, Gault, in­stead, told of hero­ism, ded­ic­a­tion and ser­vice. He did not want to in­ter­ject top­ics like wages, pen­sions and health­care be­ne­fits in­to a pub­lic peri­od of mourn­ing.

But the pas­tor at St. Mi­chael’s Evan­gel­ic­al Luther­an Church in Kens­ing­ton had no such qualms dur­ing Good­win’s April 11 fu­ner­al ser­vice. With the cap­tain’s flag-draped cas­ket rest­ing at the al­tar and Nut­ter sit­ting in a front pew, the Rev. Mar­jor­ie J. Neal called upon the may­or to end the city’s four-year con­tract dis­pute with its 1,900 fire­fight­ers and para­med­ics.

Ap­plause erup­ted in­side the church. Out­side, after the ser­vice, Nut­ter boiled over, dis­miss­ing the rev­er­end’s charge as “so in­ap­pro­pri­ate at the fu­ner­al of our hero,” ac­cord­ing to The Phil­adelphia In­quirer.

And thus the war of at­tri­tion re­sumed with Nut­ter’s latest salvo clearly in­ten­ded to halt re­cent uni­on ad­vances on the pub­lic opin­ion front, but with the primary courtroom fight mired in leg­al mud.

A ‘BIG BATTLE’

The city’s latest ap­peal of the fire­fight­ers’ most re­cent ar­bit­ra­tion award likely will not be re­solved be­fore the award ex­pires on June 30. Of­fi­cially, the sides already have entered a new round of ar­bit­ra­tion for the uni­on’s next col­lect­ive bar­gain­ing agree­ment, al­though the city still re­fuses to im­ple­ment the cur­rent one.

This is not to say that the pending ap­peal, which now sits in Com­mon­wealth Court, will be­come moot on Ju­ly 1. Rather, the uni­on — which also rep­res­ents 2,100 re­tired fire­fight­ers — will con­tin­ue to fight for tens of mil­lions of dol­lars in back wages and be­ne­fits, while the out­come could re­shape bar­gain­ing between the city and its uni­formed em­ploy­ees for years to come.

“This is part of a big battle by the Nut­ter ad­min­is­tra­tion to im­pose its own will on these con­tracts,” said Ar­thur Hoch­ner, an as­so­ci­ate pro­fess­or of hu­man re­sources man­age­ment with Temple Uni­versity’s Fox School of Busi­ness, who also serves as the Temple fac­ulty uni­on’s pres­id­ent.

“[Ad­min­is­tra­tion of­fi­cials] want the city budget to be the most im­port­ant thing and to have everything else, the col­lect­ive bar­gain­ing, fit in­to that frame­work. They’re try­ing to over­turn an en­tire sys­tem that’s been in place for 40 years at least.”

Nut­ter’s chief spokes­man, Mark Mc­Don­ald, de­clined to com­ment on the fire­fight­ers con­tract dis­pute, cit­ing the on­go­ing lit­ig­a­tion. He noted that the city’s leg­al fil­ings, au­thored by the Bal­lard Spahr firm, spell out the ad­min­is­tra­tion’s po­s­i­tion.

The fire­fight­ers’ last con­tract ex­pired on June 30, 2009. In Oc­to­ber 2010, a three-mem­ber ar­bit­ra­tion pan­el awar­ded a new four-year con­tract. Cit­ing fin­an­cial reas­ons, the city ap­pealed to Com­mon Pleas Court, a move that res­ul­ted in a second round of ar­bit­ra­tion. The same pan­el in Ju­ly 2012 awar­ded a sim­il­ar con­tract, but one slightly more fa­vor­able to the fire­fight­ers. 

The city ap­pealed again. Judge Idee Fox re­jec­ted the city’s case last Novem­ber, so the ad­min­is­tra­tion filed a third ap­peal, this time to Com­mon­wealth Court. The sides have yet to ap­pear in court to ar­gue the latest fil­ing.

“It’s highly un­usu­al,” said Joseph Loewen­berg, a re­tired pro­fess­or of hu­man re­sources man­age­ment with Temple’s Fox School and a former re­search­er of po­lice and fire­fight­er con­tract ar­bit­ra­tion.

“People have ap­pealed cer­tain pro­vi­sions [in the past], but to have en­tire awards not ac­cep­ted — par­tic­u­larly when the first court re­jec­ted [an ap­peal] — I’ve nev­er seen that. To have an en­tire award ap­pealed twice to high­er courts is quite un­usu­al.”

As a res­ult, Loc­al 22 mem­bers have been work­ing es­sen­tially without a con­tract since June 30, 2009. The city con­tin­ues to ap­ply the terms of the ex­pired con­tract. Base salar­ies range from $40,036 a year for rook­ie fire­fight­ers to $95,558 for deputy chiefs, not­with­stand­ing seni­or­ity and over­time pay.

While wages re­main stag­nant, ten­sions con­tin­ue to es­cal­ate. In Janu­ary, dozens of the city’s fire­fight­ers, many of their spouses and even some of their chil­dren pick­eted ap­pear­ances by Nut­ter and Fire Com­mis­sion­er Lloyd Ay­ers at the open­ing of a new fire­house in Ta­cony. Then last month, fire­fight­ers were among hun­dreds of uni­on­ized city work­ers who re­lent­lessly heckled Nut­ter dur­ing his an­nu­al City Coun­cil budget ad­dress, for­cing the chief ex­ec­ut­ive to aban­don his speech mid­stream and flee to the friend­li­er con­fines of his own City Hall of­fice.

Aside from these two most-pub­lic dis­plays of de­fi­ance, Gault of­ten has ac­cused Nut­ter and his ad­min­is­tra­tion of neg­lect­ing the ba­sic needs of Loc­al 22 mem­bers and jeop­ard­iz­ing the safety of the city’s 1.5 mil­lion res­id­ents. Be­sides the wage freeze, the city has sim­il­arly held the line on its con­tri­bu­tions to the uni­on’s health-care fund, des­pite the fund’s drastic de­ple­tion amid rising health-care costs. Mean­while, the fire de­part­ment con­tin­ues to em­ploy op­er­a­tion­al cost-sav­ing meas­ures such as the con­tro­ver­sial “Brown Out” pro­gram, in which se­lec­ted fire com­pan­ies are placed tem­por­ar­ily out of ser­vice on a daily ro­ta­tion.

PICA ENTERS THE PIC­TURE

The uni­on’s street-corner sign-wav­ing and in­flam­mat­ory rhet­or­ic re­flect the sim­il­arly pas­sion­ate courtroom struggle, a leg­al tug-of-war between the uni­on’s right to ar­bit­ra­tion un­der Pennsylvania’s Act 111 of 1968 and the city’s ob­lig­a­tion to craft a vi­able long-term fin­an­cial plan in ac­cord­ance with the Pennsylvania In­ter­gov­ern­ment­al Co­oper­a­tion Au­thor­ity Act of 1991.

The cent­ral is­sues have re­mained con­sist­ent at each stage. Loc­al 22 main­tains that it is en­titled to “bind­ing” ar­bit­ra­tion (and that the city is ob­lig­ated to hon­or it) un­der Act 111, which gran­ted po­lice and fire­fight­ers col­lect­ive bar­gain­ing rights. The le­gis­la­tion pre­vents them from strik­ing for pub­lic safety reas­ons, but it provides the uni­ons and their mu­ni­cip­al em­ploy­ers with the right to de­mand con­tract ar­bit­ra­tion.

The law re­quires uni­ons and mu­ni­cip­al em­ploy­ers to be­gin ne­go­ti­ations at least six months be­fore a labor con­tract is to ex­pire. If talks break down, either side can de­clare an “im­passe” and file for ar­bit­ra­tion. The uni­on and ad­min­is­tra­tion each pick one ar­bit­rat­or for the pan­el. The two chosen ar­bit­rat­ors then pick a third neut­ral ar­bit­rat­or who serves as the pan­el chair­man.

Ex­perts char­ac­ter­ize ar­bit­ra­tion ideally as a last re­sort. It’s in­ten­ded as an in­cent­ive for the sides to ne­go­ti­ate in good faith, be­cause there is al­ways a risk for both that they may not like the out­come.

“You’re tak­ing it out of your own hands and put­ting it in­to a third party’s hands,” Hoch­ner said. “It’s a crap shoot like any leg­al case.”

“The in­tent is you don’t use it at all,” Loewen­berg said.

Things work dif­fer­ently in Phil­adelphia. The city and its uni­formed em­ploy­ees end up in ar­bit­ra­tion just about every time. Since 1986, all 10 fire­fight­er con­tract ne­go­ti­ations have gone to ar­bit­ra­tion. The city’s po­lice, mean­while, now work un­der terms of a Decem­ber 2009 ar­bit­ra­tion award, which is due to ex­pire June 30, 2014. The city did not ap­peal that award, which in­cluded raises and be­ne­fit im­prove­ments for po­lice, as well as cost-cut­ting meas­ures for the city.

The ex­perts be­lieve that ar­bit­ra­tion has be­come a con­veni­ent polit­ic­al tool.

“When you give it over to a third party, there are risks, but you’re also not re­spons­ible for a de­cision,” Hoch­ner said. “You can avoid mak­ing a tough de­cision.”

3 PER­CENT RAISES

In ap­peal­ing the fire­fight­ers’ 2012 award, the city has claimed that it can­not af­ford the wage and be­ne­fits in­creases ordered by the ar­bit­ra­tion pan­el. The pan­el gran­ted Loc­al 22 mem­bers no wage in­crease in the first year of the four-year deal, fol­lowed by 3 per­cent in­creases in years two, three and four. Fur­ther, the award re­quired the city to in­crease in­cre­ment­ally its monthly health fund con­tri­bu­tions from $1,270 per uni­on mem­ber to more than $1,600 per mem­ber by the fourth year.

The pan­el ordered the city to pay $10 mil­lion in­to the uni­on’s pen­sion fund, but it in­creased pen­sion con­tri­bu­tion re­quire­ments for fu­ture fire de­part­ment hires, while re­du­cing their po­ten­tial be­ne­fits. The city sought the right to fur­lough — or tem­por­ar­ily lay off — Loc­al 22 mem­bers for up to 240 hours a year, but the pan­el denied that de­mand.

The Nut­ter ad­min­is­tra­tion main­tains that the award could cost the city as much as $238 mil­lion more than it had budgeted for fire de­part­ment labor costs in its latest ap­proved five-year fin­an­cial plan. The city’s an­nu­al op­er­at­ing budget is about $3.75 bil­lion. The ad­min­is­tra­tion has ar­gued that the ar­bit­ra­tion pan­el failed to give prop­er con­sid­er­a­tion to the five-year fin­an­cial plan as re­quired by the PICA Act.

Cre­ated in re­sponse to a fisc­al crisis that nearly bank­rup­ted the city, the PICA Act gran­ted the city new fin­an­cial tools while sub­ject­ing it to over­sight by a state board. With the city un­able to bor­row money and in need of cash to pay its bills, the newly cre­ated PICA board was gran­ted the au­thor­ity to bor­row on the city’s be­half. The city is still pay­ing back those debts from the early 1990s and will prob­ably con­tin­ue to do so for an­oth­er dec­ade, ac­cord­ing to Sam Katz, the PICA board chair­man.

Leg­ally, the city must re­main un­der PICA over­sight un­til the debts are re­paid. The ad­min­is­tra­tion’s primary duty is to sub­mit item­ized five-year fin­an­cial plans to PICA an­nu­ally for ap­prov­al.

“The ba­sic func­tion of PICA is to re­view and ap­prove the city’s budget and five-year plan, its in­come and ex­pendit­ures through a 60-month peri­od,” said Katz, a former may­or­al can­did­ate who was ap­poin­ted by Gov. Tom Corbett as PICA chair­man in 2011.

Five dir­ect­ors sit on the board. They each re­view the sub­mit­ted five-year plan in­de­pend­ently and must de­term­ine if the city’s pro­jec­tions for each year of the plan are “reas­on­able.” If the board re­jects the plan, the city must amend it or risk los­ing state fund­ing.

An­oth­er pro­vi­sion of the PICA Act was to amend Act 111 to re­quire ar­bit­ra­tion pan­els to con­sider and ac­cord “sub­stan­tial weight” to the city’s ap­proved fin­an­cial plan as well as its abil­ity to pay the costs of an ar­bit­ra­tion award without “ad­versely af­fect­ing” city ser­vices. The Act gran­ted the city the right to ap­peal an ar­bit­ra­tion award if the pan­el failed to meet those re­quire­ments.

The city has ap­pealed pri­or ar­bit­ra­tion awards, but it gen­er­ally hon­ors the awards pending ap­peals — or fol­low­ing the first round of ap­peals — ac­cord­ing to Richard Poulson, an at­tor­ney who rep­res­ents Loc­al 22 on be­half of Wil­lig Wil­li­ams & Dav­id­son.

“For the first time since we’ve had the PICA stat­ute and ap­peals, the city isn’t hon­or­ing the award pending the ap­peals,” Poulson said. “[May­or Ed] Rendell nev­er sunk to that level. [May­or John] Street nev­er sunk to that level.

“Every time they’ve ap­pealed, they’ve lost. They know they’re go­ing to lose. They’re either delay­ing the in­ev­it­able or they’re just lever­aging the fire­fight­ers in­to ac­cept­ing less than they’ve already won, and that is despic­able.”

THE CITY’S CASE

The city has claimed in its ap­peals that the ar­bit­ra­tion pan­el did not give enough con­sid­er­a­tion to the ap­plic­able five-year plan when it awar­ded the fire­fight­ers wage in­creases, high­er health­care con­tri­bu­tions and oth­er costly be­ne­fits. Fur­ther, the city ar­gues that it would have to cut ser­vices in oth­er areas to pay the fire­fight­ers’ ar­bit­ra­tion award.

The ad­min­is­tra­tion has been forced to make spend­ing cuts already, even without the in­creased fire de­part­ment per­son­nel costs. In a Com­mon Pleas Court memor­andum filed last Aug. 1, the city stated: “Since the be­gin­ning of [ar­bit­ra­tion] hear­ings with Loc­al 22, the city has been forced to make nu­mer­ous cuts to the ser­vices and pro­grams on which its roughly 1.5 mil­lion cit­izens rely, in­clud­ing re­du­cing the num­ber of fire com­pan­ies. The city has been in the throes of a sig­ni­fic­ant fin­an­cial crisis since 2008 that has forced bil­lions in budget cuts and tax in­creases.”

Loc­al 22 of­fi­cials scoff at the ad­min­is­tra­tion’s math. Their at­tor­neys ar­gue that the city his­tor­ic­ally un­der­es­tim­ates its tax rev­en­ue. In fact, its five-year fin­an­cial plans have un­der-pre­dicted rev­en­ue every year since 1992, ex­clud­ing the re­ces­sion­ary peri­od of 2009 and 2010, the uni­on claims. The uni­on fur­ther ar­gues that the city’s pop­u­la­tion has ris­en, while the eco­nomy has shown “sub­stan­tial pos­it­ive growth” since 2010.

Re­gard­ing the total cost of the award, the uni­on claims that the ad­min­is­tra­tion is falsely in­flat­ing the fig­ure. The real cost over four years may be $70 mil­lion to $80 mil­lion above what the city is cur­rently pay­ing for fire per­son­nel, ac­cord­ing to Poulson. The uni­on’s num­bers are a far cry from the city’s $238 mil­lion fig­ure.

The ar­bit­ra­tion award covered only four years, so the city should not ex­ceed four years when cal­cu­lat­ing the cost, Poulson said. Also, the city hasn’t budgeted for any in­crease in fire­fight­er labor costs.  In fact, it was count­ing on cost sav­ings and in­cluded those pro­jec­ted sav­ings in its five-year plan — and in its ac­count­ing of the ar­bit­ra­tion award.

Nut­ter has not budgeted for fire­fight­er raises in the city’s last four an­nu­al five-year PICA plans, al­though Loc­al 22 mem­bers have been awar­ded 20 sep­ar­ate raises since 1988, in­clud­ing at least one every year from 1995 to 2009. Mean­while, Nut­ter has pro­jec­ted $2.7 mil­lion in an­nu­al sav­ings in the re­cent five-year plans to ac­count for fire­fight­er fur­loughs, which the city did not have the au­thor­ity to im­ple­ment un­der the terms of the ex­pired con­tract.

Katz, the PICA board chair­man, said mu­ni­cip­al labor costs were a ma­jor con­sid­er­a­tion when the le­gis­lature craf­ted the PICA Act. The city “had a long his­tory go­ing back to the 1960s of labor set­tle­ments that ar­gu­ably were not af­ford­able,” he said.

Yet, he said, it’s not the PICA board’s func­tion to de­term­ine what the city pays its work­ers or if it’s fair.

“The city could take all of its money, wrap it up in little dol­lar bills, place them in bottles and drop the bottles in­to the Schuylkill River,” Katz said. “They could do that. We [at PICA] do not have policy-mak­ing re­spons­ib­il­ity, and for good reas­on be­cause we were not elec­ted. We do not have the au­thor­ity to de­cide where they al­loc­ate their money.

“Dis­agree­ing with how Phil­adelphia gov­ern­ment al­loc­ates its money does not provide the basis, in my opin­ion, for re­ject­ing their five-year plan,” he said.

Al­loc­at­ing money for city fire­fight­ers was fore­most on Good­win’s mind, ac­cord­ing to the Rev. Neal from St. Mi­chael’s. In ex­plain­ing her choice of words at Good­win’s fu­ner­al, Neal told the North­east Times that she merely echoed the cap­tain’s own dis­sat­is­fac­tion with the city’s treat­ment of its fire­fight­ers.

“As Luther­ans, we are ones who speak truth to power,” Neal said. “If we see in­justice, we are called to speak to that. Know­ing how Mike felt, I felt it was the most ap­pro­pri­ate time to bring it up.”

Neal and Good­win, the pres­id­ent of the church coun­cil, had in fact dis­cussed that very sub­ject dur­ing their fre­quent con­ver­sa­tions.

“He wanted the men to be taken care of,” Neal said. “It’s just not right for the men, and wo­men, to be work­ing without a con­tract.” 

Neal asked Good­win if he would con­sider go­ing on strike. The cap­tain replied that he wouldn’t, even were he not pre­ven­ted by law from do­ing so.

The pas­tor re­called Good­win’s reas­on. “He said, ‘Mor­ally, I couldn’t leave the city un­pro­tec­ted.’ ”  ••

Re­port­er Wil­li­am Kenny can be reached at 215-354-3031 or wkenny@bsmphilly.com

You can reach at wkenny@bsmphilly.com.

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