Fire Pact Passes; Saves $410K In Pensions

The Board of Alders overwhelmingly approved a new fire union contract that trades wage increases for higher employee pension contributions — and reportedly cuts annual city pension contributions by over $410,000.

The board took that vote Monday night during the regular bimonthly meeting of the full Board of Alders in the Aldermanic Chambers on the second floor of City Hall.

With East Rock Alder Anna Festa abstaining to avoid any appearance of conflict of interest (because her brother works in the fire marshal’s office), every other alder present voted in support of the new six-year contract between the city and the fire union, Local 825. 

The accord is retroactive to July 1, 2018 and extends through June 30, 2024, granting firefighters a cumulative 11 percent wage increase over the term of the contract.

Unlike the newly passed police union contract, which city actuaries estimated will increase the city’s annual recommended pension contributions by over $834,000, the fire union contract will likely reduce the city’s annual pension payments by $410,146, according to officials.

The city budget office had told the alders about the estimated police contract pension bump just hours before alders had to vote on that contract. In this case, with the fire contract, alders had more time: The budget office gave alders several days to parse through the fire union contract pension impact estimates, which can be read in full here.

“This ratified agreement between the city and the IAFF-Local 825 will recognize the lifesaving work of our firefighters,” Westville Alder and Finance Committee Vice-Chair Adam Marchand said as he urged his colleagues to vote in support of the contract, ​“by providing solid annual wage increases and spousal medical coverage for retirees. Incentives for paramedic recruitment and more comprehensive drug testing will enhance the critical services this department provides the public.”

This package will also provide savings, he added. By requiring members to participate in a preventative Health Incentive Plan (HIP), by reducing the rate of sick time accumulation from 1.25 days to one day per month, by increasing the employee pension contribution rate from 11 to 11.5 percent of annual salary, by requiring newly hired firefighters to serve a minimum of 25 years of hard service (that is, no sick time or military time buyback, which was already the case for firefighters hired after August 2013) or reach the minimum retirement age of 52 before they can start receiving their pensions, and by capping the number of officers who can retire with sick time buyback at 30 per year.

“Taken together,” he said, ​“these changes will result in long-term savings to the Police and Fire Pension Fund.”

The two dissenting voices of the night were Downtown Alder Abby Roth and Newhallville/Prospect Hill Alder Steve Winter.

They both ultimately voted in support of the contract. But they raised concerns about one unknown number in particular: the potential impact that reducing the employee cost of retiree spousal healthcare benefits will have on the city’s Other Post Employment Benefits (OPEB) account, which includes healthcare costs for retired employees younger than 65 (the age when one qualifies for Medicare).

Roth proposed a motion on the floor to postpone the vote on the contract to sometime closer to the state statute-required deadline of Oct. 21 to give the city more time to come up with an estimated impact that the proposed healthcare change would have.

Under the old contract, a retiree had to pay 50 percent of his or her spouse’s medical cost in order to include that spouse on the city’s retiree health insurance plan. Under the newly passed contract, that employee contribution percentage for spouses will drop to around 15 percent.

“I want to postpone because we’ve been told that on Oct. 14, we will find out what the cost is,” Roth said, referencing an email from city Acting Budget Director Michael Gormany that said that his office should have an estimate for the estimated cost by that date.

“It’s difficult to assess this contract without understanding its full cost,” Winter added. With the city already spending roughly $1 out of every $5 on medical benefits, he said, the alders should really know how much this contract might impact the medical line of the budget before voting.

Dixwell Alder Jeannette Morrison spoke in opposition to Roth’s motion to postpone, which Majority Leader and Amity/Westville Alder Richard Furlow pointed out would require a special meeting of the Board of Alders, since the full board does not have any regularly scheduled meeting date before Oct. 21.

“I do understand and I really do care about costs,” Morrison said. ​“But at the same time, I really understand and care about the lives of the residents of the City of New Haven.”

In a voice vote, Roth, Winter, Festa, and Westville Alder Darryl Brackeen voted to postpone the vote, with the overwhelming majority of their colleagues voting to act on the contract that night.

In his subsequent floor comments about the contract, Winter urged his colleagues to support the new agreement. The wage increases are modest in comparison to the police contract, he said. The extension of pension benefits to spouses of deceased firefighters is the right thing to do. And the contract begins to take necessary steps towards dedicating more funding towards emergency medical response.

“On balance, it should improve public safety and I urge my colleagues to support.”

Fair Haven Alder Ernie Santiago agreed. The board can continue to debate certain potential costs of the contract, he said. But his colleagues shouldn’t underestimate the life-saving heroism of the city’s firefighters and first responder. ​“When you need somebody,” he asked, ​“who are you gonna call?”