By Elisha Sauers
The Capital
ANNAPOLIS, Md. — The City Council approved a union contract with firefighters Monday night, but not without resistance from two aldermen, who fear the deal locks the city into more spending — not just next year, but through the two following years.
Along with next year’s salary requirements, the contract lays out the city’s financial obligations for paying into the pension fund for three consecutive years.
After hearing from city residents begging the city to cut back on the $92.6 million budget, the council approved the contract, which will cost the city at least $100,000 more than the current year’s deal.
The decision came down to a 6-2 vote, with Aldermen Ross Arnett, D-Ward 8, and Fred Paone, R-Ward 2, opposing it. They had asked the council to delay the vote so they could analyze Finance Director Bruce Miller’s statement on the contract’s fiscal impact. But they were outvoted by council members who didn’t want to hold up the agreement.
Arnett said the deal leaves the council’s hands tied, preventing it from cutting any positions or requesting more furloughs. He feels the agreement could set a bad precedent for other unions, which will seek similar arrangements.
“How can we make this commitment when we have our budget still pending and, in fact, are talking about making more spending cuts?” he said. “It appears we’re making a commitment to not make these cuts in fire, so does that mean the rest of the employees have to bear a disproportionate burden?”
In fiscal 2012, the city’s contribution into the pension program will be $75,000. In 2013 that will go up to $300,000. In 2014, it will hit $487,000.
The contract includes some longevity raises, six fewer furlough days than the current fiscal year and eight workers’ promotions. The city saved money in its current budget by holding off on pension-plan payments and having nine total furlough days for firefighters.
City officials said the increased costs outlined in the contract, such as the raises and promotions, were anticipated in the mayor’s fiscal 2012 budget proposal. Even the reduction of furlough days - which will cause the city to spend $145,000 more next year - is offset by money already assumed in the budget proposal, they said.
Paone said the council needed more time to analyze the implications of the more expensive contract. Miller produced the fiscal impact statement in the middle of the deliberations and apologized to the council for not distributing it well in advance.
“That’s not the way it’s supposed to be done,” Paone said. “It’s making it impossible for any of us to objectively look at the contract.”
Alderwoman Sheila Finlayson, D-Ward 4, said delaying the approval of the contract was unnecessary. City leaders have talked about catching up on funding long-term liabilities such as pensions for some time, and this agreement would accomplish that.
“Underlying this discussion is a desire to lay off people, and if that’s what the delay is all about, then that’s a whole other big problem we’re going to have,” she said.
Mayor Josh Cohen said the city does have an out if financial circumstances make it prudent to withdraw contributions to the pension fund in following years. The contract contains an escape clause allowing the finance director to make a judgment call on whether the city is in a position to pay. The decision could then come before the City Council for consideration.
“We are caught in a Catch-22 of sorts,” Cohen said, “because we all recognize we want to solidify the pension funding. But the flip side is we don’t want to obligate the city to funding, so how do we reconcile the two?”
Arnett has warned fellow council members and the administration that lower property value assessments are coming and will cause a severe reduction in tax revenue.
City Manager Mike Mallinoff and Miller presented findings to the council last week showing that the city again needs to borrow $10 million to address a cash-flow problem expected between July and October this year.
Annapolis Fire Department Chief David Stokes said the contract approved Monday night was the culmination of months of negotiations between the city and the union and represents a good compromise that will maintain high-quality service.
Last year, when the firefighters’ union was at the bargaining table, it ended up making many more concessions and took the brunt of the city’s furlough days, Stokes said.
Arnett said he didn’t want to single out firefighters with his concerns but believes the people’s demands for reduced spending went unheard when the council pushed the contract through.
“This action on the union contract indicates we have no intention on cutting,” he said. “In fact, we’re going to increase spending.”
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