Top officials at the city’s two largest municipal unions blasted Mayor Michael Nutter this week after administration officials unveiled a new compensation package — one that included a 2.5 percent pay raise but also incorporated dramatic hikes in healthcare costs for employees and increased pension contributions — for about 5,500 exempt and non-represented employees.
“This is not something we would accept,” said Cathy Scott, president of District Council 47.
“What the mayor is imposing, like a thief in the night, and solely at his whim, is a pay and benefit cut for the vast majority of city employees. For some, it is a massive pay cut.”
She was echoed by Pete Matthews, president of District Council 33.
“I think the mayor did this just to try and aggravate my membership,” said Matthews. “The mayor continues to use his tricks. He doesn’t sit down and negotiate fairly.”
The administration and its municipal unions, which together represent about 12,400 employees, have been locked in a contract standoff since 2008. According to Nutter, the package unveiled this week closely resembles an offer made to district Councils 47 and 33.
Though union officials interpreted the move as a way to increase the pressure on their members, Nutter, on Wednesday, told reporters that was not his intent.
“We remain committed to the traditional collective bargaining process,” he said. “In the meantime these are employees who are not represented, who have no one else to speak up for them. So, we’re taking action to help them.”
Nutter 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 administration plans.
In a briefing on Tuesday, administration 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.
They described the package as way to reward employees while keeping costs under control.
“We are still in a fragile economic time,” Budget Director Rebecca Rhynhart said. “Our tax revenues are growing modestly, but we’re nowhere near where we used to be. And we have to balance that with the burden on taxpayers, and then with being fair and reasonable to our employees.”
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. The changes outlined this week will keep the city’s spending on health care on an even keel.
Without the new rules, the city would spend an additional $3.6 million a year over the next five years on health care.
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 planned.
Administration officials announced details of the plan during a 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, which would require new employees into a new pension plan, require City Council approval.
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.