See how the fire contract addresses each key issue.
Six years. Numerous, expensive court battles. A historic transfer of power from the Omaha Mayor's Office to the City Council.
Omaha is finally poised to approve a new labor deal with its firefighters.
The city's been here before. Last summer, Mayor Jim Suttle unveiled a union contract that his team had worked on for years. Then the council concluded it was too lenient, rejected it and ultimately voted to take negotiating power away from the Mayor's Office.
Now Councilwoman Jean Stothert, who heads the council's negotiation committee — and who wants Suttle's job — says a majority of the council is ready to pass her team's deal when a vote is taken Tuesday.
The biggest differences from Suttle's plan address the city's most pressing financial concerns: Firefighters would pay more toward their health care costs and more toward their pension benefits than they would have under Suttle's contract. Pension rates would shrink for future firefighters.
In return, the city would commit to continuing current staffing practices — something important to firefighters worried about job cuts, and something drawing criticism from outsiders.
Suttle's plan would have given the city more flexibility in staffing.
Beyond that, the broadest strokes of the council's agreement resemble those reached by Suttle's administration.
The council's targets were obtaining additional concessions on pensions and health care, not fighting over each provision from scratch.
“Our perspective was, 'Let's not reinvent the wheel here,' ” said council negotiator Mark McQueen, a Baird Holm attorney. “ 'Let's not spend time trying to refight battles that have already been fought.' ”
Though Suttle got some concessions from the union on health care costs as well as pension contributions, the council has gotten more.
“If you have two or three main goals and you score with those and achieve those, then you've made real progress,” Stothert said. “You can continue to make progress in the future, but I think we've made real progress where we are now.”
The most tangible savings over the current contract come from firefighter concessions on health care. Annual savings under the new contract are projected to be $679,000 — nearly a half-million dollars more than those negotiated under Suttle. For perspective, the city expects to spend $19.4 million on fire employees for pensions, insurance and reimbursements next year.
Partly in exchange, the council's contract includes more commitments to how the city will staff the department, essentially agreeing to retain some current staffing policies.
Mayoral candidates, city officials and armchair negotiators argue such provisions handcuff the city's discretion on staffing.
“The ability to manage your people in the right place at the right time, the ability to reduce staff ... for any business, including a government business, is paramount,” said Dan Welch, a former council member who is running for mayor.
McQueen said those staffing guarantees were the linchpin to getting a deal done.
“Without staffing language, we would have no agreement,” he said. “That is unequivocally true.”
The council also added language to the contract to give paramedic training to more firefighters. City officials say that could have unanticipated costs, though there are no available estimates.
“No one from the City Council has ever requested that we cost out that proposal,” said City Finance Director Pam Spaccarotella.
Pension reform was a key part of Suttle's agreement and the council's. But each contract would reform the contract in different ways, making it difficult to say which is better.
In both cases, pension reforms would take decades to bear real fruit.
Over decades, though, it's difficult to forecast financial performance. Actuarial predictions don't account for the fact that future mayors and city councils will negotiate contracts of their own during that time, which could change pension provisions.
Consider: In 2004, the pension fund was stable, and officials felt comfortable boosting pension benefits to their current levels. Eight years later, as of January, the fund was underfunded by $610 million.
The reduction of pension benefits for current firefighters would immediately reduce the unfunded liability by about $30 million.
Suttle's contract, however, would have reduced benefits slightly more, according to an actuarial report by Pat Beckham, who analyzed the effects of the current deal for the police and fire pension board.
So Suttle reduced pension benefits slightly more than the council did, though the council got firefighters to contribute more to the pension fund.
Beckham said she couldn't provide an accurate comparison of the overall impact of the two plans, accounting for reduced benefits as well as increased contributions.
That's partly because a different actuary evaluated Suttle's plan.
In one way, the council's plan costs the city more money simply because it has taken an additional year to achieve an agreement.
Suttle's deal was reached 16 months ago.
Had it been approved, lower pension benefits and increased pension contributions would have gone into effect immediately.
That didn't happen. Instead, the plan continued for another year on an unsustainable path, with costs exceeding the amount of money going into the system.
The city's police and fire pension board and its actuary acknowledge the wait had a measurable impact on the fund, although the exact amount has not been calculated.
The pension board will consider whether to calculate that cost at its next meeting, on Thursday.
Some of the biggest concessions by firefighters in the new agreement address health care costs.
Suttle's agreement would have asked firefighters to increase their monthly premiums to 4 percent for individuals and 6 percent for families.
The council's agreement, by contrast, would require all employees to pay 7 percent premiums.
Unlike Suttle's agreement, the council's contract also requires firefighters to pay the same amounts as civilian employees for deductibles, out-of-pocket maximum payments, co-insurance maximums, out-of-network care and premiums.
The increases are slight, but they have a major impact. Whereas Suttle's deal achieved $206,000 in annual health care savings, the new deal brings that figure to an estimated $679,000.
Health care changes
|Deductible||Current||Suttle agreement||New agreement|
|Family, Single +1 deductible||$300||$300||$800|
|Individual, Single +1 coinsurance maximum||$500||$500||$600|
|Family coinsurance maximum||$1,000||$1,000||$1,200|
|Individual total out-of-pocket maximum||$650||$650||$1,000|
|Single +1 total out-of-pocket maximum||$650||$650||$2,000|
|Family total out-of-pocket maximum||$1,300||$1,300||$2,000|
|Individual employee premiums||0%||4%||7%|
|Family, Single +1 premiums||4%||6%||7%|
Paid union leave
Suttle's deal would have created a full-time fire union position that could work solely on union business.
The council's agreement removes that provision but grants 2,000 hours of time per year to be spread out among five union leaders to tend to union business. Those hours equate to one full-time position.
In exchange, the council's agreement cuts 4,600 hours' worth of court-ordered vacation time from other employees. The exchange would net some $270,000 in savings, the council's negotiator said.
Both contracts achieved 18-month wage freezes.
But after the freeze, they approached raises differently.
The new agreement would give firefighters average annual wage increases of 2.5 percent to 2.9 percent from July 1, 2012, to the end of the agreement in 2014.
Suttle's contract would have based wage increases on average raises in Des Moines; Lincoln; Madison, Wis.; Milwaukee; and St. Paul, Minn. — the same system used by the state's labor court.
At the time, city negotiators predicted that those increases would be between 1 percent and 2 percent per year. It's uncertain what the final amounts would have been.
Both contracts preserve language from the state's labor court on fringe benefits, such as specialty pay and uniform pay.
Suttle's contract and the new agreement both would lift the pension fund, but they differ slightly in how they would achieve that goal.
Both contracts would eliminate “spiking,” which occurs when a firefighter obtains larger pension benefits by boosting his income by working overtime or using banked comp time.
Suttle's agreement would ask firefighters to put an extra 0.75 percent of pay toward the system. The council agreement asks employees to contribute an extra 1.75 percent, bringing the total employee contribution to a little more than 17 percent.
Both contracts call for the city to pay about 33 percent of payroll toward the pension system.
The agreements differ, however, in how they calculate pension benefits.
The mayor's agreement gave the most generous benefits to current firefighters with more than 20 years on the job. They would have to work 25 years to get a 75 percent payout. Current firefighters with less than 20 years would have had to work 30 years to earn the same benefit, or could have taken a benefit at 70 percent after 25 years.
New hires could have qualified for a 75 percent pension if they were at least 55 years old with 30 years of service.
Under the council's contract, the highest benefits would be awarded to current firefighters with 15 or more years of experience. Those firefighters can retire after 25 years on the job and earn pension benefits equal to 75 percent of their maximum pay.
Current firefighters with less than 15 years on the job can earn the same benefits after working 30 years.
The real savings come from lower pension rates for future hires. New firefighters would have to work 30 years to earn a maximum benefit of 65 percent of pay.
The 65 percent level is roughly what firefighters could earn before the 2004 fire contract, when the pension fund was fairly stable.
|Employee pension contributions|
|Estimated savings to pension fund over 50 years|
|Suttle agreement||$696.5 million|
|New agreement||$822.2 million|
From the union's perspective, the new agreement contains important guarantees on staffing.
From the perspective of some outsiders, the agreement ties the city's hands in managing personnel levels and controlling costs.
Both the City Council and Suttle agreements would protect current firefighters from layoffs.
Under Mayor Jim Suttle's agreement, the city affirmed a labor court ruling that each firetruck would have four employees.
The council's agreement goes further, with a commitment to maintaining the current ranking structure on fire equipment. It also codifies plans to give dozens of firefighters paramedic training.
Some outsiders say such staffing provisions could have costly consequences, and they argue that the provisions overrule a state labor court decision that upheld the city's discretion in staffing the department as it sees fit.
Under the council's contract, firetrucks must be staffed by a captain, a fire apparatus engineer and two firefighters.
Additional requirements call for seven battalion chiefs per shift and three paramedic shift supervisors.
Further, the council's agreement says the city must maintain a minimum of 37 positions in the department's central office.
The contract creates the position of “lead paramedic” on every ambulance, to provide leadership structure. And by the end of the contract period, about 120 firefighters would have to be certified as paramedics.
Certified paramedics are paid more than other firefighters, and lead paramedics would get another pay bump.
City Attorney Bernard in den Bosch said training that many paramedics could raise personnel costs, as the city pays overtime to fill in behind those staffers during the training period.
Council negotiators said requiring paramedics on more firetrucks and engines would boost public safety.
Attorney Mark McQueen, who led the council's negotiations, contends that the detailed staffing mandates could keep the council's contract out of the state labor court.
The court removed several of these staffing mandates from the contract in 2011 and would likely remove them again if given the opportunity, he said. Fear of losing those guarantees, he said, would keep the union from mounting a court challenge.
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