Cops get 7 percent raises, benefits “adjusted” E-mail
Written by Mark Nichols   

Pay now or pay later. That was essentially the choice faced by both parties as contract negotiations recently wrapped up in Philadelphia between police and the city. An arbitration panel recently awarded a five-year contract to the city police union that provides officers with a 7 percent raise. But the deal includes benefit changes that the city says will save major cash in the long haul. “We face a significant challenge in paying for this contract, but the short-term pain is offset by the long-term gain,” Mayor Nutter told reporters during a press conference.The long-term gain for the city amounts to a long-term loss for new police hires.

The contract for the 6,550 sworn officers, who are members of the Fraternal Order of Police, is the first deal resolved since agreements with the city’s four municipal unions ran out last summer. Observers say that the approved contract gives Nutter most but not all of what he was looking for.

Philadelphia is now facing a massive bill for police raises, but will win long-term savings through the addition of a lower-cost retirement plan for new hires and changes to the way health-care bills are paid.  But the pain down the road in terms of cuts to benefits and health care were offset by the large raises and a concession on the part of the city regarding  residency.

The contract provides wage increases in July 2010 and July 2011 that combined add up to seven percent. The raises are expected to cost $114 million over the life of the five-year contract. Mayor Nutter said he was not exactly clear on where the money for the wage increases would be found.

“There is no question that the economics of the award absolutely presents a fiscal challenge in an already fiscally challenged environment,” the mayor told reporters. Nutter also refused to discuss whether cuts or layoffs would be required. FOP President John McNesby praised the contract, in particular the wage hike.

“I think it addressed the FOP concerns in areas and the city’s concerns in areas,” he told reporters from the Philadelphia Daily News. On the health care side, the union will shift in July to a self-insured plan, meaning that the city will pay medical bills directly, instead of a per-member fee each month. Nutter said that the city expects to realize savings through this model but that the union would continue to run its own plan.

On pensions, the new deal stipulates that new hires would have the option of paying more to stay in the current pension program or going to a hybrid plan that combines a 401(k) with a lower-benefit pension. The details of that plan have not been “ironed out.”

The city won some work-rule changes, including permission to make officers take up to 30 furlough days each year. But Nutter said he was frustrated by the changes that will make it easier for officers to move outside the city.

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