City hall has a golden opportunity this year to get its runaway labour costs under control.
Four unions representing three-quarters of the city’s workforce will see their collective agreements expire at the end of the year, including police and firefighters. And that means the city has an opportunity to implement cost controls through new collective agreements.
The city’s salary and benefits costs have been skyrocketing in recent years, rising on average over 5% a year. That’s about twice the combined rate of inflation and population growth. And it’s the main reason taxes and utility charges are going up as much as they are.
But that could change if Mayor Brian Bowman and city council give administration direction to negotiate new contracts that would slow the growth of those labour costs. While the city does have some discretion outside collective agreements to control costs, including staffing levels, job classification and overtime policies, the real cost drivers are in the contracts.
The four contracts in question, all of which expire in December, are CUPE Local 500, which represents the largest number of city workers, the police and firefighters’ unions and the association representing senior police officers.
Together, those unions represent 7,571 city employees, about three quarters of the estimated 10,253 on the payroll.
The police contract is probably the most important of the four. Policing costs — driven largely by salary and benefit expenditures, including overtime — is one of the fastest growing costs at city hall. More than half of constables now earn over $100,000 a year in total remuneration. And overtime pay continues to be a pensionable earning, which drives up pension costs for taxpayers.
Granted, getting control of policing costs isn’t a simple matter. Police contracts go to binding arbitration if there is no negotiated settlement. And it’s usually in the police union’s best interest to hold out for arbitration.
But the city has leverage, too. And the police union should be put on notice that if the next collective agreement doesn’t provide some relief for taxpayers, changes may have to be made to staffing complements. The same goes for the firefighters’ union.
This isn’t just about wage increases, either. There are many aspects of collective agreements that have cost implications that are open to negotiation.
The city, for example, still has retirement bonuses for staff. City employees are eligible for cash pay-outs when they retire based on years of service. That’s on top of their pension. It’s a ludicrous perk that cost taxpayers a staggering $9.6 million last year and it should be eliminated. But it has to be done through the collective bargaining process.
This is the kind of hard work that’s required at City Hall to get costs under control. Nobody said it would be easy. But Bowman and city council have to make this a priority if they ever want to get their arms around the city’s soaring labour costs.
If salary and benefit costs were limited to the combined rate of inflation and population growth, it would free up tens of millions of dollars a year in the city budget.
City officials keep telling us the city doesn’t get its fair share of the fiscal pie. But their main problem is that they can’t, or won’t, control their labour costs.
Total salary and benefits costs at the city rose from $623.2 million in 2010 to $805.9 million in 2015. That’s an average annual increase of 5.3%. The only way to pay for that is to jack up taxes and utility charges, which is what the city has been doing.
The city now has an opportunity to do something about those rising costs.
And taxpayers should hold them to account if they fail to seize that opportunity.
City of Winnipeg collective agreements that expire in 2016:
Canadian Union of Public Employees Local 500
Number of members: 4,637
Contract expires: Dec. 24, 2016
United Fire Fighters of Winnipeg Local 867
Number of members: 926
Contract expires: Dec. 24, 2016
Winnipeg Police Association
Number of members: 1,975
Contract expires: Dec. 23, 2016
Winnipeg Police Senior Officers’ Association
Number of members: 33
Dec. 24, 2016
TOTAL NUMBER OF WORKERS: 7,571
— City of Winnipeg annual report 2015