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Arbitrator: 8% raise for police sergeants, but retirees kick in for health care

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Updated: October 21, 2013 2:15PM

The Chicago Police Department’s 1,100 sergeants will receive an 8 percent pay raise over four years, but those who retire after Dec. 31 will make a 2 percent contribution to retiree health care that’s now free, thanks to an independent arbitrator’s award handed down Thursday.

The 8 percent pay raise is only a “floor.” If the General Assembly mandates a pension contribution higher than the current 9 percent, sergeants can negotiate a higher pay raise. The contract will reopen “solely on the issue of wages,” the arbitrator said.

There’s also a so-called “me-too” clause that will allow sergeants to automatically claim a higher pay raise negotiated by or awarded to anybody else in the Police or Fire Departments.

Six months ago, sergeants resoundingly rejected a new four-year contract tied to pension reform.

The failed agreement would have given them a 9 percent pay raise over four years in exchange for raising the retirement age for sergeants to 53, increasing employee pension contributions from 9 percent to 12 percent by January 2015, hiking health care contributions for new retirees to 2 percent of annuities, forfeiting cost-of-living increases every other year and limiting cost-of-living adjustments in intervening years to 2.5 percent with simple interest.

City Hall and the sergeants union had also agreed to seek state legislation that would have given the city seven years to “ramp up” funding for police pensions, instead of coughing up another $600 million to stabilize police and fire pension funds in 2016.

Mayor Rahm Emanuel had touted the sergeants’ deal as a “road map” for other unions to follow, but the divide-and-conquer strategy fell flat with the rank-and-file.

Compared with the failed deal, the arbitrator’s award is more generous to sergeants and more costly to Chicago taxpayers facing a $338.7 million budget gap next year and a $1 billion shortfall in 2015.

Since the old contract expired on June 30, 2012, the arbitrator’s award also will require the city to cut a check for roughly $2 million in back pay for sergeants.

But the city’s chief labor negotiator Jim Franczek said, “Given the enormous fiscal challenges we have, this is a pretty balanced award. We didn’t get everything we wanted, but neither did the union. The big thing is we’re going to have a contribution to retiree health care for the first time. That’s a breakthrough for us.”

Franczek noted the arbitrator gave “substantial weight” to the rejected agreement that was the product of 22 bargaining sessions. That undoubtedly “held down” the pay raise, he said.

“Hopefully, this provides some positive momentum” for stalled negotiations with rank-and-file police officers and firefighters, Franczek said.

Sergeants association president Jim Ade said he’s “not jumping for joy over” the arbitrator’s award, but he can “live with” it.

“We’re happy about three of the issues and not extremely happy about the other two,” Ade said.

“We were looking for 11 percent. We got 8 percent. And we were trying to maintain the status quo as an incentive for older sergeants to retire at 55 with free health care. But starting in 2014, they’ll have to contribute 2 percent of their retirement annuity.”

As for the rejected agreement, Ade said, “It was pretty obvious our members didn’t want that one.”

Fraternal Order of Police President Mike Shields, who helped to torpedo the original sergeant’s contract, said he has not yet seen the arbitrator’s award, but his attorneys look forward to reviewing it.

Shields recently apologized to his membership for an embarrassing paperwork mistake that threatens to deny rank-and-file police officers their automatic right to a retroactive pay raise in 2012.

The arbitrator’s award included no change in the $800-a-quarter duty availability pay for sergeants, their so-called “supervisors’ quarterly” payment or the city’s tuition reimbursement program.

The Emanuel administration wanted to reduce or eliminate all three.

In 2015, the city is required by state law to make a $600 million contribution to stabilize police and fire pension funds that now have assets to cover just 30.5 percent and 25 percent of their respective liabilities.


Twitter: @fspielman

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