Philadelphia, January 9, 2015 – Mayor Michael A. Nutter announced that the City of Philadelphia has reached an arbitration award agreement with International Association of Fire Fighters Local 22. The term of this contract runs from July 1, 2013 through June 30, 2017 and provides pay increases for union members and critical reforms in the area of heath care. A summary of the award terms are attached.
Mayor Nutter’s remarks announcing the agreement are as follows, please check against delivery:
“At the start of a new year, it is a tremendous pleasure to be able to announce an arbitration award involving our very brave fire department and firefighters of this city that:
- Strengthens the government’s interest in long-term sustainability and reform;
- Meets the members’ interests in pay and benefits, which enables them to take the incredible personal risks that they do every day for Philadelphians;
- And, equally important, advances the taxpayers’ interest in affordability.
I believe that our firefighters are among the best trained and highest performing public servants in the nation. And we thank them every day for what they do and what they risk.
On Monday at 10 a.m. in this room, we will hold a service for Lt. Joyce Craig who gave everything to the city she loved and to her fellow firefighters. Her memory will always be in our hearts.
Every day, firefighters, paramedics and EMT’s – our first responders – face grave danger on our behalf, and so today we announce terms of an arbitration that propels our City into a labor-management structure for the 21st Century, one that manages costs while providing the means to help our brave firefighters to stay healthy while improving their fitness for the very dangerous jobs they confront each day.
I say all of this because I think some folks might lose sight of the true level of cooperation and partnership that exists between Local 22 of the International Association of Fire Fighters and our City Administration.
We have had our arguments and disputes over the last 7 years, but we were always partners in public safety. Getting signatures on a contract can take time, often longer than any of us would like, but getting it done right is important for our City’s future.
Joe Schulle and his team have been champions and true leaders in representing their membership, but they have also been our reasonable partners in this process, and I thank them all for their professional advocacy.
For our part, I said seven years ago that a critical part of mayoral leadership, as I defined it, was to search for labor contracts that would be good for members and taxpayers. But these agreements also needed to be sustainable for the future. We needed to turn this huge ship of state to a new direction on critical issues like healthcare, pensions and work rules.
I grant you that this process wasn’t always pretty; in the heat of battle, sometimes things are 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. I value the incredible valiant service of our firefighters, paramedics and our first responders.
But we demonstrated our continued commitment to changing the structure for future taxpayers and we have methodically and consistently worked toward that goal.
With this award today, the City now has contracts in place with all four unions. And I want to note that in keeping with our concern for the future, we were able to structure these contracts in a way that I believe is important for the next mayoral Administration that takes office a year from now.
While the DC 33 contract will expire June 30, 2016, the contracts for the FOP, the Firefighters and DC 47 will expire on June 30, 2017, thus giving the new Mayor a chance to set his or her priorities and have some time to plan.
Now, the term of this contract runs from July 1, 2013 through as I noted, June 30, 2017.
The award provides wage increases of 3% on July 1, 2013; 3% on July 1, 2014 and 3.25% on July 1, 2015. Finally, there will be a reopener of this contract on economic terms in 2016.
Our preliminary estimate of cost for the city is about $70 million over the course of the Five Year Plan. There will be a challenge to fit these costs into our budget and plan but we will, as we have in the past, work through it.
I want to focus my attention on a handful of areas that I believe will help firefighters do even higher quality work while the department can better manage city resources.
In terms of healthcare costs, the union’s health care fund will adopt aggressive wellness and disease management programs, like the FOP’s health plan has. The union fund will be responsible for the first $15 million in plan costs in terms of benefits and administration.
The Firefighters union health fund will then be self-insured just as the FOP is and will spend down $15 million from the Union’s health fund resources. This will clearly benefit taxpayers. With a similar structure put in place with the FOP in 2009-10, we saved the City roughly $70 million in healthcare costs.
The appeal of the last firefighter award was driven largely by the health fund’s fairly high costs. With these changes, we are taking steps to ensure that this is not the case in the future.
But we’re also putting in place a major wellness and fitness program for members of Local 22 in the workplace, something that the City has sought for more than a decade.
These wellness programs complete with periodic medical examinations and incentives to get healthy should do two things: help reduce or control our healthcare costs in the years to come AND help our firefighters to improve their health as they work on the dangerous fire ground. It’s something that will benefit them and increase overall public safety.
We have also developed a more comprehensive and clear disciplinary code, which will improve the transparency and perception and reality of fairness of the disciplinary process. The award also creates an expedited arbitration procedure for discharge or suspension cases.
We expect this new system to be more efficient, and I think most importantly, more fair, and generally I think it will improve the administration of labor-management relations.
And like an earlier FOP award, the panel has created a pathway for firefighters to potentially move outside the city. This is something on which I have dissented but we are not and cannot appeal. For police officers under the FOP contract, in my experience, very few have taken advantage of this provision. Similarly, firefighters will be able to live outside the city after five years of service.”