As city contracts expire tonight, no strikes - or deals - loom

At the stroke of midnight tonight, contracts for the city's 20,000 union workers will expire, with the prospect of new deals still on the distant horizon.

But don't look for striking workers outside City Hall at 12:05 a.m. tomorrow. Although workers in District Council 33 of the American Federation of State, County and Municipal Employees and AFSCME District Council 47 can hit the pavement, neither unit has called a strike-authorization vote.

"I don't expect to call a strike-authorization vote very soon," said Cathy Scott, president of DC 47, the city's white-collar union. Negotiations for the police and fire unions - which cannot strike - will be resolved through arbitration. Police arbitration continues next week; fire arbitration is set to start later in the year.

As long as bargaining continues and workers stay on the job, the city must honor the terms of the old contracts.

The contracts expire as the city enters a new fiscal year with the budget still in limbo. Mayor Nutter again today will lobby Harrisburg for approval of a temporary 1-cent increase to the city sales tax and changes to how the city pays into the pension fund.

Without those budget measures, Nutter says, severe cuts and layoffs are coming. And even if the city gets what it wants from Harrisburg, he says, the unions still will have to help ease a $1.4 billion five-year budget gap.

Nutter is counting on $125 million in contract savings over the next five years. The city's opening offers to nonuniformed workers included a four-year wage freeze and major concessions in pension contributions and work rules, as well as a restructuring of health-benefit plans.

City negotiators have met twice with DC 47 and DC 33, the city's blue-collar union. Scott complained that the city isn't bargaining in earnest, noting that the city did not have a health-care proposal when they met last week.

"They were not prepared when we met to propose a health-care proposal at all," Scott said.

Nutter yesterday said that the city soon would be ready to talk health care.

"We set up a joint labor-management committee on health care," Nutter said. "That committee has been working very hard, and we expect we will be in discussions around more of the specifics related to health care very shortly."

The work of that committee has not been made public.

As part of its cost-saving plan, the city plans to switch to a lower-benefit pension plan for new hires. If, as expected, the state Public Employee Retirement Commission declares the city pension fund "severely distressed," the city can begin implementing that program before union negotiations are complete.

The city also wants to delay some payments into the pension fund over the next two years and stretch out the current obligations over 30 years instead of 20.

The Pew Charitable Trusts yesterday released an updated version of a report on the city's benefit costs. Titled "Quiet No More: Philadephia Confronts the Cost of Employee Benefits," it notes that pensions and health care threaten to eat up 26 percent of the city's general fund by 2013. Benefits now consume about 21 percent of the general fund.

The report did not offer suggestions for reform, but pointed out the state of Philly's benefits. A few key points:

* After a hammering by Wall Street, the city's pension fund currently has enough money to pay less than 50 percent of its obligations. The fund is in worse shape than funds in other cities, including Baltimore and Detroit.

* Philly's proposed plan to delay payments into the pension fund will help with the short-term fiscal crisis, but payments will balloon in 2013 with a $709 million payment.

* Pew also notes that the state Public Employee Retirement Commission has proposed taking over about 75 distressed pension plans, including Philadelphia's.

* Overall compensation for city workers is roughly in line with other local and state governments', although more money goes toward health care in Philadelphia.