City Controller: PICA should reject Nutter’s five-year plan

City Controller Alan Butkovitz today called on the Pennsylvania Intergovernmental Cooperation Authority to, for the first time, vote down the five-year plan submitted by the Nutter administration late last week. “I urge PICA to reject the city’s five-year plan as presented because the assumptions are not reasonable,” he said in a statement.

Butkovitz said the plan does not include proposed means to pay for any contract agreements reached with city workers, including an arbitrator’s award to firefighters and paramedics’ union IAFF Local 22. Though the administration announced last week that it will appeal that award, it already did so two years ago, a judge sent it back to arbitration and an arbitrator returned virtually the same terms last month.

Arbitration is a process entered into when the city can’t come to agreement on contract terms with unions whose workers can’t legally strike, like those responsible for public safety. Both sides present their facts to an independent third party, whose decision is supposed to be legally-binding.

“There is no reasonable basis for the city to assume a favorable outcome in its appeal of the firefighters award,” Butkovitz said. “There is also no reasonable basis for the city to assume that there will be no added costs resulting from ongoing negotiations with unions representing the city’s non-uniformed workers.”

In addition to Local 22, the city’s two non-uniformed unions, blue and white collar workers’ AFSCME District Council 33 and 47, are also working under expired contract terms.
Local 22 and AFSCME D.C. 33 and 47 comprise three of city’s four
municipal unions and have been working without a contract – and without a
raise – since 2009.

Though D.C. 33 and 47 workers can legally strike, if they do, the city has the right to implement a “last, best offer” of contract terms, imposing them without the union’s input.

“If the arbitrator’s award to the IAFF is upheld, the city is facing a benefit payment of approximately $66 million in the current year and if the ongoing negotiations with the non-uniformed workers results in agreements requiring additional retroactive wage and benefit payments, the city under the five-year plan as presented would lack the necessary funding to make the payment,” Butkovitz said.

The only municipal union whose contract Mayor Michael Nutter has
recognized since he took office is that of Philadelphia police union
Fraternal Order of Police Lodge #5. The Nutter administration in 2009
upheld a five-year-contract issued by an arbitrator that included a
seven percent pay raise over three years with the possibility of further
salary increases, no hikes in employee benefit contributions and a
shift in requirements allowing all officers employed for more than five
years to live outside the city by 2012.

“It is not reasonable to assume that the non-uniformed represented employees who have gone without raises for four years will go without a contract for another five years, especially in light of recent settlements between the city and other labor unions that have resulted in salary increases,” Butkovitz said.

Butkovitz also said the plan fails to account for more large funding requests from the Philadelphia School District, which he says is “on the brink of insolvency.” Due to the District’s $282 million current year deficit, he said it is likely the body will ask for more money.

“Regarding the School District’s financial situation, I want to reiterate my recommendation that the School District prepare a five year plan of its own which would require the approval of an independent authority,” Butkovitz said.

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