Mayor Nutter's administration announced today it will not appeal a court ruling that ordered the city to pay millions into the firefighters union's cash-strapped healthcare fund.
Nutter said in a statement that he disagrees with the ruling, which calls for a $6.2 million lumpsum payment to the fund as well as increased monthly payments, but is going along with it because it is "in effect a split decision and only temporary in nature."
“We have concluded that it’s more important for the Commonwealth Court to focus on the merits of the City's appeal than on this order, which has only temporary effect," Nutter said. "Should the City prevail in its appeal, the City will recover the money paid to the health fund under this order.”
Nutter and the union have been at loggerheards since 2009, and firefighters have been working without contracts since then. The mayor has appealed two arbitration awards that would have created what the administration considers to be overly burdensome healthcare costs.
The larger case regarding the unresolved contract will begin in Commonwealth Court next month. In the mean time, the firefighters union asked Common Pleas Court Judge Idee Fox to make the city implement the award being appealed.
Local 22 specifically asked for relief with the healthcare fund, which dwindled from $28 million in 2009 to $2 million this year during the stalemate.
Fox ruled last week that the city must increase its aid for the fund but did not require the administration to implement the entire contract.
"We’re grateful that they didn’t appeal and hopefully it leads to an amicable resolution," said Local President Joe Schulle. "We definitely feel that things are going in the right direction."
Here's the administration's release:
FOR IMMEDIATE RELEASE
MAYOR NUTTER ANNOUNCES DECISION ON COURT ORDERED FIREFIGHTERS’ HEALTH CARE
Philadelphia, August 14, 2013 – Mayor Michael A. Nutter announced that the City of Philadelphia will not appeal a Common Pleas Court order calling upon the City to implement part of a 2009 arbitration award for Local 22 of the International Association of Firefighters, clearing the way for an increase in health fund payments as well as a payment to the union’s retiree joint trust fund.
“While we do not think the ruling in this matter was a correct interpretation of the law, we have decided to move forward and implement it. This court order is in effect a split decision and only temporary in nature,” said Mayor Nutter. “We have concluded that it’s more important for the Commonwealth Court to focus on the merits of the City's appeal than on this order, which has only temporary effect. Should the City prevail in its appeal, the City will recover the money paid to the health fund under this order.”
The terms of the order, signed by Common Pleas Judge Idee Fox, call for the City to increase the per member, per month health fund payment from slightly more than $1,200 per month to almost $1,620 per month. The judge also granted a retroactive lump sum payment of $6.2 million to the Health Fund and a $7.5 million contribution to the retiree joint trust fund. The 2009 award had called for what now totals about $31 million in retroactive health care payments.
The City’s Finance Department has estimated that the new health care costs for firefighters will add about $69 million to City spending over the next five years.
Among the issues to be decided in the City’s appeal to the Commonwealth Court are wages and various work rules. A new hybrid pension plan, which neither the City nor the union contested, has already been implemented. Oral argument before the Court is slated for September 11, 2013.