The Labor Tribune

City Burning?

Our Opinion: It’s time for binding arbitration to find an equitable resolution to fire fighters dispute with St. Louis over pension issues

Part 12 (Last in the series) – It’s time to get back to bargaining table and put the verbal baseball bats aside

By ED FINKELSTEIN

Publisher

St. Louis- Over the past 11 weeks in this space we’ve attempted to explain the position of fire fighters in their struggle with the City over their pensions. It is a complicated issue with many moving parts. It was important to cover all its various aspects.

It’s also important that our readers understand the series was never “anti-Mayor Francis Slay” as some have tried to portray it. The mayor has a difficult job, like so many big city mayors: growing demands for services, less revenue, lots of “heat.” So it’s important that everyone understand this was not personal against the mayor, it was the Labor Tribune fulfilling its obligation to the labor community to tell the union’s side of the issue. Hopefully we accomplished that goal.

The issue now is where does this go from here? How does the problem get solved?

Given that the City is poised to pass an ordinance that would dismantle the current pension plan, the pension fund has already sued the City. So it appears that a final resolution will be coming from the courts, which means the decision is potentially years off, leaving everyone in limbo and digging a deeper financial hole for the City if the lawsuit goes against them. Frankly, given that the City has already lost three legal fights that have reached all the way to the Missouri Supreme Court, their chances for success this time are questionable as the circumstances and issues are many of the same already decided but with a different slant.

FIRE FIGHTERS ISSUES

The fire fighters of Local 73 have many valid concerns that we’ve presented:

Over the years they took less in wages and put more effort behind their pensions in order to have a reasonable retirement. Given they are not eligible for Social Security, that was a wise decision on their part. The facts are that City fire fighters are among the lowest paid in the region; their $37,500 starting salary is the second lowest of the top 10 cities in the Midwest.

The City’s demand for “control” is not totally honest. They already have control because not a single pension benefit begins until the Board of Aldermen passes it and the mayor signs a final ordinance into law. The issue for the City is that before it gets to the Board, enabling legislation has to be created in Jefferson City. The argument that legislators from Joplin and Carthage, etc. set the standards for the City is a fallacious argument at best. The City has always had the last word. This checks and balance system has been in place, and worked well, for some 50 years. Suddenly it’s no good?

Fire fighters don’t trust the City to act in their best interests when the money crunch begins. And for good reason. In the first ordinance proposed by the City, the Labor Tribune pointed out that there were clauses that allowed the City to completely disband the pension program or starve it by allowing the City to no longer make payments into the system, which would have eventually bankrupted the pension plan. That was changed in the current proposal, but the fire fighters feel the City showed its true intent, and will fight to the bitter end to protect what they’ve worked so hard to earn.

The Jefferson City checks and balances system is vital to protect their pensions. If the City totally made the plan decisions, what they giveth with one ordinance they could taketh away with another. That the City has already shorted the pension plan by millions of dollars is proof of that concern. Given the City’s efforts so far, fire fighters have little trust that their pension plan would survive.

The fire fighters are willing to make changes to lighten the City’s financial burdens. For the past two years they have gone to Jefferson City and lobbied for enabling legislation for changes that would have saved the City millions of dollars. In one instance, they successfully obtained enabling legislation that would immediately have saved $1.2 million annually as a starter. The City has blocked its consideration by the Board of Aldermen. In the ensuing two years the City has missed out on $2.4 million in savings it could be using right now for other purposes. In a second effort this year to save $5.1 million more, the City actively fought the issue in Jefferson City, and that enabling legislation went nowhere. Interestingly enough, the City, in their current calculations, is using the same actuarial assumptions used by the fire fighters for the $5.1 million savings that the City fought against.

Instead of conducting true negotiations with the fire fighters, the City met several times to fulfill its “meet and confer” legal obligation, declared an impasse and went on to introduce legislation in the Board of Aldermen to severely change the pension plan. Real negotiations never took place. They need too.

Because fire fighters can’t earn Social Security, when they retire they are able to draw out the full amount they paid into the plan. This helps subsidize their pension just as Social Security would have done had they been eligible for it. The City wants to end that practice. That, by the way, is NOT the City’s money they get upon retirement, it’s their OWN money that they set aside with an eight percent withdrawal each payday. As an aside, the Labor Tribune has pointed out that the City has earned over $40 million in interest from the fire fighters’ money. That $40 million stays in the pension system.

Finally, seeing their efforts were struggling, the City changed tactics saying it would not lay off police officers or fire fighters (which they had already threatened to do) if changes could be made in the fire fighters pensions. Many decried this latest effort as “blackmailing” the citizens of St. Louis to put more pressure on the Board of Aldermen to pass the mayor’s bills.

CITY HAS ITS POINTS TOO

Even though the City has approached this dispute with a heavy hand, there are certain facts that they present that cannot be ignored:

There has been some abuse in the fire fighters disability program. That some fire fighters have taken a disability pension only to find hard manual work in other industries or go on skiing vacations is not right. That’s outright abuse, if not fraud. The system needs changing. The fire fighters are highly critical of this abuse. They have offered changes. No matter what the final court decision, changes must be made. Both the fire fighters and Board of Alderman President Lewis Reed have some excellent approaches to do just that.

The City has a financial problem, no doubt. But pensions are not the only reason; to try and solve the financial crisis on the backs of the fire fighters — and the City has made it clear this will ultimately do the same to police and other city employees’ pensions — is not right. Frankly, this is a tactic right out of the Republican playbook: blame the city employees for all the financial ills! That’s nonsense. City employees have shown in the past they will do their fair share of shouldering the burden. But only their fair share, not the whole load.

Pension reform is vital to the long-term financial health of the City. But the City’s leaders must remember it was previous administrations that approved the current system. They must be responsible in finding an EQUITABLE solution that includes discussions and negotiations with all the parties involved. The fire fighters have said they are willing to make changes in their pension plan. Let’s find the common ground to do so.

WHERE TO GO FROM HERE?

The best potential outcome can only be reached if both sides come back to the bargaining table. That will be difficult. Both sides are entrenched. However, if the residents of St. Louis are to be truly served, little can be gained by dueling TV ads and recriminations.

Rather than have the issue tied up in court for a long time, there is a solution here waiting to be found.

On Channel 11’s recent “Pulse of St. Louis” program where both sides debated the issues, it was clear that they are only about $2 million apart. Said radio personality Charles Jako serving as one of the moderators, “That’s chicken feed in the bigger picture. Why can’t you two come to some common ground?”

The answer is negotiations. If that fails again, then binding arbitration.

In a previous Labor Tribune article, Fire Fighters Local 73 President Chris Molitor said the fire fighters offered binding arbitration and the City refused.

On the Channel 2 program Mayor Slay’s Chief of Staff Jeff Rainford said the City was willing to go to binding arbitration but the fire fighters refused.

It appears there is a miscommunication and binding arbitration is agreeable to both sides; it could resolve the issue.

Add in one other factor that should be considered: an actuarial study by an independent firm to obtain real costs analysis. The fire fighters pension plan and the City have their own studies. Neither trusts the other’s study. Let’s bring in a neutral third actuary to run the numbers to alleviate suspicions from both sides and allow an independent arbitrator to have the data as part of the final decision-making process.

Once a decision is rendered, both sides can go to Jefferson City to jointly lobby for enabling legislation. There is little doubt that the state legislature would agree if both sides were united in an approach. Then that could come back to the Board of Aldermen for implementation through a new ordinance and the mayor’s signing it into law. That’s the way the process works. It would be legal. It would be final.

It’s important that cooler heads prevail: both sides apparently agree on binding arbitration. Do it! And do it now! Too much is at stake: for the residents of St. Louis, for City government, for the fire fighters retirees and those who will need to retire at some point in the future.

More gets done with a cup of coffee across the bargaining table than wielding verbal baseball bats in public!

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