Pension disputes threaten goodwill between city and unions

The honeymoon is over.

Just weeks after praising the Scranton police and fire unions for negotiating new contracts that are projected to save the city money, council and the mayor are at odds with the public safety workers over challenges relating to pensions.

All five council members said they support Mayor Bill Courtright’s decision to withhold raises to retired firefighters and police officers because of the dire financial condition of the pension funds. They also said they stand by their decision to pass emergency legislation to correct an omission in the pension ordinance that did not include the age requirement for police officers to retire.

“It’s rare to have five council members and the mayor agree on something,” councilman Pat Rogan said.

“I understand the union leaders have to do what’s in their membership’s best interest. I just don’t agree with them in this instance. … They’re doing what they have to for their members. We are doing what we can for the city as a whole.”

At issue is the police pension board’s vow last week to sue if the city does not rescind its directive that ordered the pension plans’ administrator to withhold 0.875 percent cost of living raises that were due to retirees in January. The firefighters union also filed a grievance over the issue.

The police union also filed a grievance last week challenging council’s March 12 vote to amend the pension ordinance to include a provision that officers hired after 1987 must be age 55 to retire. City officials discovered recently that the age requirement, which is contained in the firefighters and nonuniform pensions ordinances, was erroneously left out of the police pension ordinance.

Those decisions seriously eroded the goodwill between the unions and council members, who said they were disappointed by the unions’ stance, especially in light of the recent contract negotiations that provided raises for active members and restored healthcare coverage for retirees, among other benefits.

“We gave, what I feel, were good contracts for the unions. I think they could have shown a little bit of good faith in these issues,” said council president Bob McGoff.

City solicitor Jason Shrive said he is disappointed by the unions’ stance, but the city administration remains committed to building on the strong working relationship it has had with employees.

“I wouldn’t go so far as to say the goodwill has evaporated. There are going to be times the administration and unions disagree,” Mr. Shrive said. “It’s unfortunate they took the position they did, but I don’t want people to think its doom and gloom … and the unions and administration are back in battle.”

Mr. McGoff, Mr. Rogan and councilman Joe Wechsler said they do not dispute the unions have a right to file the challenges. They said they wish the unions would agree to forgo challenges in this instance given the dire financial condition of the fire and police pension plans, which are projected to be insolvent within 2½ and five years, respectively.

“The union leaders are just doing what they are elected to do,” Mr. Wechsler said. “Just because they can doesn’t mean they have to.”

“I think they should take a more parochial look at it and say, ‘the city is not in a position to do the things it may be contractually required to do. In this case we will overlook that and move on,’” Mr. McGoff said.

Councilman Wayne Evans said the city unions’ stance is another blow to the city, which is already struggling to meet all its financial obligations.

“The decisions that are being made by some unions and pension board to fight the city at every opportunity … is disheartening. Those actions, among others issues, will, sooner than later, drive us to receivership and ultimately bankruptcy,” he said.

John O’Shea, a retired police officer and secretary of the police pension board, said employees are fully aware of the city’s financial woes and the pension funds’ dire condition. He said the pension board felt it had to take action on the raise issue because there’s more at stake than the money.

The city directed the plans’ administrators, Thomas J. Anderson & Associates and BNY Mellon, to withhold the raises based on the city code, which says no increases in pensions can be granted if the plans are not financially sound. Mr. O’Shea said the board contends the city overstepped its authority when it bypassed the board and threatened to sue Anderson and Mellon if they paid the increases.

“It’s not about the money, it’s about the way they’re doing it,” Mr. O’Shea said. “They circumvented the composite board by sending a nasty letter to Mellon and Anderson & Associates.”

Paul Helring, president of the police union, said that is also the issue with the emergency legislation that added language to the pension ordinance to specify officers must be age 55 to retire with a full pension. City officials said the age requirement was left out because of a clerical error.

Mr. Helring said there is no way to know if the omission was intentional or not. Even if it was, there is a bigger issue in that the city cannot change benefits without negotiating the issue.

“They are violating the law. They can’t unilaterally change pension benefits,” he said.

Council members said have balked at negotiating the matter, saying the city already gave the union substantial benefits with the newly renegotiated contracts.

“There is nothing more to give,” said councilman Bill Gaughan, who along with Mr. Evans opposed the revised contracts.

Mr. Helring said the union is not looking for anything in return for allowing the city to add the age requirement.

“Maybe negotiate is a bad word. Let’s sit down in a room and talk about the situation and try to hash it out,” he said.

The grievance filed by the firefighters union over the raises for retirees is scheduled for an informal hearing before a mediator. If an agreement is not reached, the case will go to an arbitrator.

As for the police pension board lawsuit, no decision has been made regarding when that will be filed, said pension board solicitor Larry Durkin.

Mr. Helring said the police union is still open to discussing the matters and hopes to resolve the issues without court intervention.

“We don’t want to go to arbitration and to go to court,” he said. “We just want to sit down and have our say, let the city have its say, and work it out.”

Mr. Shrive said he’s also hopeful the matters can be resolved, but the city is prepared for a legal battle if need be.

“I still stand by my stance,” he said. “The reason we’re taking the position we are is in an effort to save the pension fund. It’s not that we are trying to begrudge retirees of anything.”

Contact the writer: