By Hilary Russ
Sept 26 (Reuters) – About 5,500 city employees in
Philadelphia, Pennsylvania’s biggest city, will get 2.5 percent
pay raises starting Oct. 1, but some will have to pay more for
health and pension benefits, the mayor announced on Wed nesday.
Most of the affected employees hold civil service positions
and are not represented by unions, or are at-will employees.
The workers have not had a raise since 2007 and did not get
the $1,100 lump sum bonuses received by unionized employees in
2008. Some non-union employees were also subject to furloughs
and salary cuts, Mayor Michael Nutter said in a statement.
Because the recession has left cities across the United
States with thin budgets, many have made changes to employee and
retiree benefits to rein in ballooning pension and healthcare
costs.
“At the heart of this compensation package is a connection
between employee pay raises and benefits reform that will move
the city toward fiscal sustainability,” Nutter said.
Some of Philadelphia’s biggest, fastest-growing expenses are
employee health and pension benefits, according to the its
comprehensive annual report for the year ending June 30, 2011.
The two combined comprised 25 percent of proposed budget
expenditures.
Philadelphia took in nearly $3.9 billion in revenue in
fiscal 2011. Revenue collections are expected to contract
slightly, to $3.7 billion by 2017, while total employee benefits
are projected to grow from just under $1 billion in fiscal 2011
to nearly $1.2 billion in fiscal 2017, according to the city’s
five-year financial plan.
The net changes revealed on Wednesday will cost Philadelphia
$17 million through 2017, the city said.
The city has about 22,300 full-time employees under its
fiscal 2013 budget. Nutter’s administration has been trying to
win similar benefit concessions from unions representing
non-uniformed public employees since 2009, but those
negotiations stalled.
In the past, the city’s non-unionized employees have
received the same compensation boosts as its unionized civil
servants.
Philadelphia’s general fund surplus for 2017 is estimated to
be $60 million, but that does not include the cost of the
changes announced on Wednesday.
It also does not account for possible changes to two key
labor contracts. The city’s police are operating under a
contract, but it is due to be opened to wage negotiations soon.
The city is also appealing an arbitration award with
firefighters that it says could cost up to $200 million if it is
upheld.
