In a move that is sure to increase pressure on the city’s two largest municipal workers’ unions, the Nutter administration this week announced a new compensation package for approximately 5,500 non-union employees, which dramatically changes the employees’ pension and health care benefits.
“Now, we can say to those that remain, ‘It’s time for you to make a choice’,” said the mayor’s Chief of Staff Everett Gillison.
The administration and its municipal unions – the American Federation of State, County and Municipal Employees, local 47 and 33 – have been locked in a contract stand-off since 2008. Recently, officials with the Pennsylvania Intergovernmental Cooperation Authority warned that if a contract cannot be hammered out by next year, they would not approve another five-year plan, putting millions in state funding to the city at risk.
Gillison said that negotiations with both unions are ongoing - but in the meantime, the administration felt it appropriate to lay out the terms of employment for non-union employees. He said that union officials were aware of the administration’s plans.
“Yes,” he said. “We have been negotiating. Obviously we have not come to a conclusion. Where I think that you see the fact that we’re here today, it’s just the fact that we think we’re at a point where the traditional way of asking these folks to wait until we get deal with 33 and 47 just doesn’t seem to be happening. So, we’re just going to move these folks up.”
Officials said they expected the entire package, which combined a number of costs and savings – to cost the city about $17 million over the next five years. Details of savings versus costs were not immediately available.
The new package gives all exempt and non-represented employees – people appointed by elected officials and other at-will employees – a 2.5 percent raise affective Oct. 1, restores their step and longevity increments, which have been frozen since 2007, and increases their pension contributions by an average of 1.5 percent of pay.
Perhaps the biggest change is a revision to healthcare benefits for employees in the city’s HMO plan, which could dramatically increase costs for some employees. The city offers two health plans – an HMO and a PPO plan. Under the new benefits package, PPO costs for employees would remain roughly the same. For employees enrolled in the HMO plan, costs would jump – in some cases tripling.
Exact costs depend on the specific employee, but according to figures provided by the administration, for the average employee with family benefits, the cost would go from $42 a month to $141. For a single employee, the costs would rise from $14 a month to $49.
Officials emphasized the fact that the city will continue to pay roughly 92 percent of health care costs, a larger percentage than most government or private sector employers contribute.
“We have to reflect the costs that we have,” said Gillison.
In addition, overtime rules will be changed to eliminate double-time, limit overtime to hours worked – meaning that sick and vacation time cannot be counted toward overtime – and a change to civil service rules to allow furloughs – though none are presently planned.
Administration officials announced details of the plan during sit-down with reporters on Tuesday afternoon. Mayor Michael Nutter formally announced the plan Wednesday morning.
The change will affect 1,689 exempt employees – primarily staffers for elected officials; 1,127 non-represented employees, and 1,840 court employees.
Several of the items outlined this week require further action. Any changes in the civil service rules require the approval of the Administrative Board, and changes to pension rules require city council approval.