By Rich Lord
Pittsburgh Post-Gazette (Pennsylvania)
Copyright 2006 P.G. Publishing Co.
As prosecutors mulled indictment last year, Mayor Tom Murphy maintained that his 2001 deal with the firefighters union was not a giveaway, but rather a concession to reality in a state where public safety unions hold the upper hand in contract battles.
Contracts between municipalities and their fire and police unions are governed by a state law, Act 111 of 1968. It says that municipalities and police and fire unions must start negotiating a new pact six months prior to a contract’s end, and it prohibits strikes.
If the two sides fail to settle within 30 days, the law requires that they enter binding arbitration before a three-member panel.
The municipality and the union each appoint an arbitrator. The American Arbitration Association submits the names of three neutral arbitrators, and the municipality and union each eliminate one. The remaining neutral arbitrator rounds out the panel.
The arbitrators then decide all of the issues on which the two sides disagree. It takes at least two arbitrators to approve an award.
Cities often plead poverty, saying they can’t afford big raises. The arbitrators can consider or ignore such pleas.
Unions try to convince arbitrators to match awards made in other cities, said Joseph Quinn, a shareholder at Klett Rooney Lieber and Schorling and an arbitrator for the city. Fire unions compare their contracts with police unions in the same city, and vice versa.
“There is kind of a spiraling effect of wages and benefits improving dramatically for police and fire,” said Mr. Quinn.
“I don’t see how you could characterize [Act 111] as stacked against municipalities,” countered Stuart Davidson, a Philadelphia lawyer often picked by unions to sit on arbitration panels. “Municipalities have vastly more significant resources to be able to present their cases” than do unions.
Arbitrators’ decisions can be appealed only under narrow circumstances -- for instance, if the arbitrators ordered something that wasn’t legal.
The history of the city’s fire contract shows some of the pitfalls of the process.
In 1996, the city entered the arbitration process determined to cut the cost of its Fire Bureau by increasing the work week, according to David Y. Miller, then the city’s budget director.
The city named Mr. Miller to the arbitration panel. But he was outvoted by Mr. Davidson and neutral arbitrator Alfred Dybeck of Scott, who has since died.
The award pegged firefighter pay to police pay. The result included a 5.6 percent jump in veteran firefighter pay that contributed to a $2.4 million increase in Fire Bureau costs over that period. The work week remained 42 hours, effectively preventing staff cuts.
In early 2001, the expiration of the contract and a mayoral election approached. Mr. Murphy faced an awkward scenario: He’d have to tell voters the city was fiscally sound, then turn around and poor-mouth to arbitrators.
Meanwhile in Philadelphia, arbitrators made a generous award to that city’s firefighters union that gave them 7 percent raises and increased city contributions to their health insurance fund. In other cities, too, firefighters were winning big.
Mr. Murphy opted to avoid the uncertainty of arbitration on key contract points. He granted the 350 most experienced firefighters what amounted to 13 percent raises through 2004.
Whether that was a quid pro quo for the union’s political endorsement, which may have decided the razor-thin 2001 election in Mr. Murphy’s favor, is still subject to debate.
The deal had one undeniable effect: It drove Fire Bureau spending from $50.9 million in 2000 to $58.3 million in 2003. The fire budget has since been trimmed to $48.4 million.
In an April 12, 2004, letter to Murphy, firefighters union President Joe King called the 2001 contract “the deal in 2001 for your political endeavors.” That sparked U.S. Attorney Mary Beth Buchanan’s investigation, ensuring that fallout from the 2001 contract would long outlast its term.