Chicago firefighters in line for $94 million in back pay
By Fran Spielman City Hall Reporterfspielman@suntimes.com February 7, 2011 12:00PM
Updated: September 24, 2012 6:25AM
Chicago firefighters and paramedics would get $94 million in back pay dating back to June 30, 2007 — bankrolled by debt likened to “borrowing to pay for last year’s groceries” — under a contract approved by a City Council committee Monday.
“We’re very concerned. It’s enormously expensive to borrow to pay for operating costs. Future taxpayers are gonna have to pay, not only for their own city services but debt on services they did not receive,” said Civic Federation President Laurence Msall.
“It’s similar to borrowing to pay for last year’s groceries. It demonstrates a failure to plan and leave aside adequate funds” for an expense the city knew was coming.
Members of the City Council’s Finance Committee voiced similar concerns before approving a deal that gives firefighters and paramedics a 10 percent pay raise over five years in exchange for manpower changes that will help reduce city overtime costs. The contract goes before the full City Council on Wednesday.
Back paychecks are expected to range from $5,000 to $8,000.
“We knew approximately what this agreement might look like because it mirrored the [police] agreements, but other than 2011, we do not have back pay actually budgeted? We’ll have to bond for that?” said Ald. Tom Tunney (44th).
Deputy Budget Director Jonathon Johnson replied, “That’s correct.”
Newly appointed Ald. Jason Ervin (28th), Maywood’s former village manager, continued, “Is there any other way to pay those dollars without having to borrow to do so? Are they any other options — potential adjustments to the budget in order to meet that demand?”
Johnson replied, “At this time, no. A similar process was followed for the Police Department, also. The process has been of financing that through bonds vs. paying it outright.”
Last spring, Chicago taxpayers dodged a fiscal bullet when an independent arbitrator awarded police officers a 10 percent pay raise over five years, their smallest five-year increase in nearly three decades.
Although Mayor Daley knew the settlement was coming, he had already spent whatever money he had set aside to pay for it. He had no choice but to issue $160 million in short-term credit retired by general city revenues.
“Our revenues dropped precipitously after the recession started. It’s the best option,” Budget Director Eugene Munin said at the time.
The firefighters contract mirrors the police pay raises.
It also calls for the elimination and reassignment of a fire company currently assigned to the repair shop to provide what the city calls a “cushion” against overtime.
Chicago taxpayers would get additional cost-saving flexibility in the requirement that there be five employees on every piece of fire apparatus. That’s the issue that triggered the bitter 1980 firefighters strike.
The city is currently allowed to dip below that requirement 30 times a day. Under the new contract, the number of so-called “variances” would rise to 35 times a day. In addition, firefighters who go home sick during their shift need not automatically be replaced.
If a firefighter “lays up” and leaves work after 1 p.m. — five hours into a 24-hour shift — his or her fire company would be free to operate with four employees, instead of five. Those instances do not count toward the daily variances.
The $254 million in borrowings to cover back-pay for police officers and firefighters will only exacerbate the extraordinary financial crisis awaiting Chicago’S new mayor.
Mayor Daley’s final budget was precariously balanced — without raising taxes — by a trick-bag of one-shot revenues that include draining all but $76 million from the 75-year, $1.15 billion lease that privatized Chicago parking meters.
As a result, his replacement already faced a structural deficit that approaches $1 billion-a-year when pension obligations are factored in.