The fight over pay and benefits for Phoenix’s workforce of nearly 14,000 civil servants is expected to hit a boiling point this week, with dozens of union members planning to fill a City Council meeting on Wednesday to protest proposed cuts.
Union leaders say the city is attempting to balance its projected $37.7 million deficit on the backs of employees who’ve already been strained by compensation cuts and hiring freezes stretching back to the Great Recession.
City Manager Ed Zuercher has proposed the unions take a 1.6 percent across-the-board pay and benefit cut in the upcoming fiscal year, saving an estimated $16 million.
Some city leaders say the proposed reductions are a pittance considering many of the so-called cuts for some union members are merely the suspension of merit pay raises as well as a freeze in increases to the longevity bonuses seasoned employees receive every year. Other unions would take a cut in base pay or benefits at the same time their members would continue to receive raises or bonuses.
Phoenix is negotiating new, two-year labor contracts, and, as of Monday evening, three of the city’s five unions with collective-bargaining rights had still, for the first time in recent memory, been unable to come to an agreement with management this close to the end of the process. Negotiations began in January.
“This is unprecedented in the history of the city of Phoenix,” Labor Administrator Cindy Bezaury said. “Unfortunately, this is what I’ve referred to as a perfect storm.”
Two unions have reached agreements that include pay and benefit cuts, including the powerful United Phoenix Fire Fighters Association, which represents about 1,500 firefighters. The other is Laborers’ International Union of North America Local 777, which represents roughly 1,000 landscapers, solid-waste equipment operators and street-maintenance workers.
Council members are scheduled to vote on the Local 777 contract, but a vote on the fire-union contract is awaiting ratification from the union’s members. In addition to a 1.6 percent pay and benefit cut next fiscal year, the groups would take a 0.9 percent cut in the second year of the contracts. However, employees represented by the unions would continue to receive merit raises and longevity bonuses each year.
Phoenix has been unable to reach agreements with the unions representing police officers, clerical and office workers and skilled craftsmen, including electricians and mechanics. Those unions have demanded pay restorations and increases.
One of the biggest political fights will likely involve the Phoenix Law Enforcement Association, which represents about 2,400 police officers. Union leaders have argued that police should be treated differently than other employees because they’ve faced unique challenges, including a hiring freeze that’s reduced their ranks by about 500 officers over the past five years.
“Are we more important than anybody else?” said union President Joe Clure. “No. Do we do a different job? I don’t think anybody would disagree that our job is somewhat different than a traditional secretary or something of that nature.”
The police union’s request is likely to be divisive, because the city has a longstanding practice of requiring all its unions to take the same level of compensation cuts or increases. Yet some City Council members have argued that public-safety employees should be treated differently due, in part, to the dangerous nature of their jobs.
If city management and the unions are unable to resolve the impasse, council members will be forced to impose contracts for the upcoming fiscal year, which starts July 1.
The council will hold a public hearing on the unresolved contracts at its meeting on Wednesday in its chambers, 200 W. Jefferson St. It is expected to vote on final agreements next week.
The debate is exacerbated by a budget crisis. Phoenix faces a deficit in the upcoming year that could also lead the council to make steep cuts in services or raise taxes and fees for residents. Council members are exploring the idea of enacting a water-meter tax that would cost most homeowners $1.50 per month, among other revenue hikes.
Councilman Michael Nowakowski, an ally of organized labor, said that if the unions refuse to accept a deal, it will put the council in a precarious political situation. He has urged union leaders to return to the negotiating table, saying a political bloodbath could ensue if council members are forced to impose a contract.
Ultimately, Nowakowski said, he believes the majority of the council would impose tougher cuts on employees because they have heard an outcry of protests from residents concerned about $29 million in proposed service cuts outlined in Zuercher’s draft budget. Thousands of residents filled public hearings in recent weeks to protest the potential closings of senior centers and youth recreation programs, among other cuts.
“If you put us in a political situation, of course we’re going to have to go with the community,” Nowakowski said. “My thing is if you bring it to us, it’s not going to be good. The bottom line: it becomes political then.”
However, it appears some council members would still oppose the contracts with the 2.5 percent reduction in pay or suspension of raises and other benefits. The type of compensation concessions vary for each union, but they are all being asked to give up a comparable amount.
Councilman Sal DiCiccio, who has led the fight against “automatic” pay raises and bonuses in city-union contracts, said the city has created a false narrative by portraying a loss of pay raises and bonuses as a pay cut. If union members agree to forgo such raises or take a pay cut and still receive the merit raises and longevity bonuses, they’ll still be receiving more money next fiscal year even though the city faces red ink, he said.
Throughout the recession, the majority of city employees received performance-based raises or bonuses every year. In 2012, the city said its general employees had received step-pay increases or “longevity” bonuses that averaged out to 4.8 percent per year.
“They’re coming out claiming not getting a pay raise is now a pay cut,” DiCiccio said. “There’s no way anyone if their right mind can call that a pay cut. It’s just so phony.”
At the same time, employees contend the city still hasn’t fully restored pay and benefit cuts imposed to help Phoenix recover froma historic deficit during the depths of the downturn.
Employees took a 3.2 percent salary and benefit cut each year for two years starting in 2010, and the city has only given back half of their concessions.
Fire union President Pete Gorraiz said his members would give up 2.5 percent in compensation by taking a furlough day, losing a portion of their uniform allowance and giving up a contract provision he said allows some veteran employees to include in their pension calculations money received in lieu of accruing more sick leave. The practice involving sick-leave payments has been called “pension spiking” because it can inflate an employee’s pension near retirement.
Gorraiz took issue with DiCiccio’s characterization of the merit raises and longevity bonuses, saying starting firefighters earn only $15.90 per hour and will be frozen at that wage for years if the city stops raises. He said his union chose to give up other compensation rather than see the city slash services such as its fire-prevention program staffed by civilian inspectors.
“My firefighters, they recognize the financial situation and understand the impact it would have throughout the city if the city has to do everything through service cuts,” Gorraiz said.