Omaha City Council negotiators and the Omaha fire union's leadership have tentatively agreed on a new labor contract, raising hopes for an end to one of the city's most contentious political debates.
The deal would cost city taxpayers less than a proposal that Mayor Jim Suttle unsuccessfully pitched to the council last year, according to the council negotiating team.
Firefighters would pay a larger share of their health care and pension costs. New hires would get lower pension benefits and have to work longer to draw a full retirement.
And the changes would do more to shore up an underfunded fire and police pension system that has become financial baggage for the city. The system faces a shortfall of $610 million.
The deal would save the pension fund $125 million more than what Suttle proposed, according to an actuarial review for the city.
In all, the pension fund would save $822 million over the next 50 years.
On top of that, council members said, their deal would save the city at least $2.1 million over the next two years in health care and wage changes.
The agreement would give firefighters an average annual wage increase of 1.6 percent over the four-year contract.
The union's executive board voted late Tuesday to approve the proposed contract, which would be the first between the City of Omaha and firefighters Local 385 since 2007.
The tentative agreement, which would cover 2011 through 2014, now must be approved by the full union membership in November, the city's Personnel Board and the full City Council.
The council's hope is to have the new agreement approved by the end of the year.
Council members Jean Stothert, Chris Jerram and Pete Festersen served on the council's labor negotiations committee, and they expressed confidence that their proposal would be approved.
“We're not calling this the 'deal of the century,' as the original tentative agreement was billed as,” Festersen said. “But we are saying these are significant changes and significant savings to the taxpayer and a good first step that only takes us through 2014.”
“Some of these things were very difficult,” said Mark McQueen, the Baird Holm attorney who led the city's negotiations. “Very, very sensitive, very emotionally charged discussions.”
Steve LeClair, the fire union president, did not return a call seeking comment.
The tentative deal comes 14 months after the council rejected a deal that the Suttle administration struck with the fire union. After criticizing the length of that proposed contract and lack of health care concessions from firefighters, the council voted to rescind the mayor's ability to negotiate contracts.
The latest proposal carries forward some changes that Suttle pitched.
It would eliminate the controversial pension practice known as “spiking.” Partly in exchange, the deal would implement a deferred retirement program, which has already been extended to fire managers and police. The program allows veteran employees to effectively draw a pension while working for the city.
As Suttle proposed, a pay freeze for firefighters would be in effect, retroactively, for the first 18 months of the agreement.
But council members touted their agreement as drawing more concessions from fire employees by getting them to pay more toward the pension fund and more for their health care insurance.
“It was like a locomotive train going at high speed towards a collision,” Stothert said. “And we've slammed the brakes on it. We haven't completely stopped it yet, but we are heading in the right direction. The pension is not going to get worse, it's going to get better now.”
Health care coverage generated some of the most heated negotiations, council members said.
They said union representatives refused the city's push to move fire employees to the city's civilian health care plan. Instead, the new deal would have fire employees paying the same deductibles, premiums and other health care costs that city civilian employees do while retaining firefighters' more generous prescription drug program.
Stothert said the health care changes would bring “a huge savings to the city.” That savings is estimated at $680,000 a year.
The contract could be appealing to the union membership for several other reasons.
Aside from the certainty of having a deal, the agreement would give the city's firefighters guaranteed wage increases for 2½ years, and they wouldn't have to give up more attractive elements of their health care plan.
Firefighters with at least 15 years of service would be able to retire with their maximum pension benefit after 25 years of service, not 30 years, which was the case under Suttle's proposal. Additionally, the union wouldn't have to bear the expense of annual court battles against the city.
Other parts of the deal would:
» Give firefighters a 2.5 percent pay increase for the last half of 2012, 2.25 percent in 2013 and 2.9 percent in 2014.
» Preserve minimum staffing requirements on fire equipment — the “four men on a truck” issue — though the deal expands some exceptions to that rule.
» Eliminate a proposal to allow the fire union president to work on union business full time. That had been included in Suttle's deal. In exchange, under the new plan, the city would offer more paid union leave hours but cut some court-ordered vacation time from other employees.
» Create “lead medic” specialty pay (with a 75 cent-per-hour increase) that's designed to provide leadership structure inside city paramedic units.
Medics would have to have three years experience as a firefighter, and go through a testing process to be certified to earn the specialty pay. Paramedics assigned to a medic unit would also receive a 13 percent pay bump (up from 10 percent), while those who are certified and not assigned to a medic unit would get a 5 percent pay bump (down from 8 percent).
The deal is retroactive to Jan. 1, 2011, and would eliminate the union's pending case for that year's back wages before the Nebraska Commission of Industrial Relations.
After progress on the fire contract, council members said they don't expect to return labor negotiating powers to the Mayor's Office. The council committee and its hired attorney, whose firm will receive $130,471 for work on the fire contract, will soon begin negotiating a new contract with city civilian employees.
“Optimally, you think you'd want your CEO negotiating,” Jerram said. “But maybe the framers of our charter were wiser than us when they empowered the council with that authority.”
Jerram said both sides came to the negotiations with a high level of mistrust but overcame that. “They didn't think we wanted a deal. We didn't think they wanted a deal.”
As talks proceeded, Jerram said, “each side grew to a level of understanding that the things we were talking about were leading places.”
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