Melissa Bailey File Photo
Firefighters douse a fire on George Street last December.
On the verge of a decision by a panel of arbitrators, the fire union and the city have reached a tentative agreement on a new contract — and may have settled one of the thorniest unresolved disputes in New Haven’s quest to rein in long-term labor costs.
The city and the union reached an oral agreement last week on a new, 5‑year contract for the city’s 270 firefighters.
The deal would run from July 1, 2011 to June 30, 2016. It still needs to be drafted into a document. And it still needs to be ratified by rank-and-file firefighters in a yet-to-be-scheduled vote.
The agreement would save the city $2.1 million per year due to concessions in health care, pensions, and the mandatory staffing requirement, according to Mayor John DeStefano.
Other municipal unions, such as those that represent city managers and police, have reached similar agreements. Firefighters had been holding out against making similar concessions. They were nearing the process of binding arbitration, where a panel of three arbitrators hears both sides and hands down a final contract. Fire Union President Jimmy Kottage even openly criticized the police union for settling a similar deal.
Melissa Bailey File Photo
Fire Union Prez. Jimmy Kottage.
“It’s a concessionary contract, but we’re pleased with the final outcome,” said Kottage (pictured), president of the International Association of Fire Fighters Local 825. “It’s fair to both the city and the firefighters.”
DeStefano called the agreement “fair” because it reduces pension and health care costs but “differentiates” which employees feel the brunt of those concessions. The bulk of the cuts “falls larger on new workforce,” DeStefano said, “which is a fair approach to take.”
The deal capped three years of negotiations. The two sides finally settled as an arbitration deadline neared: In just a few weeks, a panel of arbitrators is set to give a final ruling on the contract unless the rank and file approve the tentative deal, Kottage said. He said both sides became more willing to negotiate as the deadline approached because they didn’t know what the arbitrators were going to decide.
“The unknown for both sides was problematic,” he said.
“I think it’s better to reach these things at the table than not,” DeStefano said.
Kottage said he plans to discuss the deal with firefighters in a meeting Wednesday. He said he has to “straighten out” agreed-upon language in the contract before sending it to his members for a vote.
Below are highlights of the contract, according to Kottage and DeStefano:
Pay. Firefighters, who make a $67,283 base salary per year plus overtime, would not get any retroactive pay raises for the time since their contract expired on June 30, 2011, he said. Starting whenever the contract is approved, they would get a 3 percent raise, followed by two 2.5 percent raises in the next two years.
Health care. In a first for a city union, all active firefighters will make a big switch in the way they get health insurance. They’ll change from a conventional health care plan to a health savings account (HSA) with a deductible of $2,000 for individuals and $4,000 for families.
“This is a somewhat more aggressive settlement on health care, from management’s point of view,” said DeStefano. He said some unions offer HSAs as an option, but the fire union would be the first to switch all active members to HSAs.
In an HSA, the employee and employer stash money in an account that’s set aside for their medical care. Instead of paying a co-pay at the doctor’s office, workers have to shell out for the deductible. After that, additional medical costs are paid for by drawing down from their HSA.
The working assumption behind the HSA is that workers will spend less money on health care if they consider the money to be their own, Kottage said.
“The whole point of a high-deductible plan is you try to encourage consumerism,” said Dugas. Workers are more likely to ask for a cheaper, generic version of a drug if they are paying for it through an HSA, he said.
“People are really more cautious about their own money,” than they are about other people’s money, Dugas said.
The HSA will cost $18,000 per year per firefighter, compared to $25,000 for the conventional health care plan, according to Kottage. Firefighters will pay 13 percent of the monthly payments instead of 16.5 percent, as they previously did.
Pensions. Following changes made by the police union, the fire union would give up some pension benefits for new employees. New hires would no longer have overtime pay included in the calculations for their pensions. They wouldn’t be able to cash in sick time for retirement benefits. And they’d have to wait 25 years to retire instead of 20.
All active firefighters would also increase their monthly pension contributions from 8.75 to 10.75 percent of their salaries.
Firefighters who have already retired wouldn’t see changes to their health care or pensions, Kottage said.
DeStefano called the changes “consistent with our approach to tier pension benefits between folks who have worked with us for some time, and have made life choices based on that, and those who are new to the workforce.”
Holiday pay. Firefighters get paid for 13 holidays per year. Under the new contract, they’d be paid for 10 hours per day on those days instead of the previous 12.
Mandatory staffing level. The fire union has agreed to make changes to a key clause in its contract that was settled seven years ago. The clause set a mandatory staffing level dictating the number of firefighters that must be on the job at any given time. Kottage said the union agreed to lower that number from 73 to 72. Because there are four work shifts, that equates to eliminating four positions, for a savings of $560,000 per year, Kottage said.
There are no outstanding issues that need to be sent to arbitration, DeStefano said.
“I’m pleased with the final outcome,” said Kottage. “During a very difficult time, we feel that we’ve accomplished a very fair contract for the city and taxpayers and for the firefighters.”