Nutter gives up appeal of firefighters arbitration award

Philadelphia Mayor Michael Nutter walks to the podium during a news conference, Thursday, Aug. 8, 2013, at City Hall in Philadelphia. (AP Photo/Matt Rourke)

After an unprecedented four-year legal battle with the city's firefighters union, Mayor Nutter has raised the white flag.

His administration on Friday withdrew his appeal of an arbitration award that the city had long contended it could not afford. 

"The city's financial condition has improved," Nutter said. "We can now pay the cost of this award."

The city will now pay a lumpsum of $47 million in retroactive wage increases as well as $28 million in contributions to union healthcare and benefit funds. It has already agreed to increase its monthly contributions to firefighters healthcare plans from $1,270 per employee to $1,620 per employee.

Despite the increased costs, the city anticipates having positive, albeit diminished, fund balances for the next five years, thanks to improved tax revenues. Finance Director Rob Dubow said that fact would cripple the administration's position in court, because the city would be arguing it couldn't afford the award despite showing more than enough money for it in projected fund balances.

The arbitration award covered July 2009 to July 2013. The two sides are currently negotiating the current arbitration period. 

Nutter's decision comes two months after the union ousted its president, consummate Nutter antagonist Bill Gault. They replaced him with Battalion Chief Joe Schulle, who ran on a platform that he could hit the reset button on the union's poisonous relationship with the administration.

Schulle did not immediately respond to a request for comment.