Nutter delivers modest budget plan to polite applause

There were no Mayor Bozo posters this time, no shouting or whistling, not a jeer or catcall Thursday morning as Mayor Nutter spent 30 minutes describing his new budget proposal to City Council -- a far cry from last year, when he was shouted down by angry municipal workers.

But the polite applause, mostly from Nutter cabinet members and staff, did little to mask the unions' continuing battles with his administration and the unions' strong political support on a Council that rarely gives the mayor what he wants.

A morning rally outside City Hall drew several hundred workers from two city unions -- AFSCME District Council 33, whose 8,800 members have gone five years without a contract or a raise, and Local 686 of the Utility Workers Union of America, whose 1,140 members are feeling threatened by one of the accomplishments Nutter touted Thursday: the proposed sale of the city-owned Philadelphia Gas Works.

In a sense, union leaders and their Council allies bookended the mayor's budget address _ protests beforehand, a news conference afterwards. When Nutter was done speaking, Council President Darrell L. Clarke invited DC 33 president Pete Matthews and Local 686 president Keith Holmes to a joint news briefing, where Clarke criticized the PGW deal and suggested the funds Nutter budgeted for DC 33's workforce weren't enough to settle that union's long-running contract stalemate.

Ten of the other 15 Council members joined Clarke, Matthews, and Holmes. Clarke deflected a question asking if all the Council members were opposed to the PGW sale, but speaking for himself, he criticized the move at both the news conference and the morning rally.

"This is an effort to privatize PGW," Clarke said. "At the end of the day, we are not supportive of privatizing municipal workers."

Nutter told reporters his administration is preparing a detailed description of the proposed sale to address Council's concerns.

The administration wants to sell PGW to a Connecticut-based energy company, UIL Holding Corp., for $1.86 billion.

After paying off PGW's debt and other expenses, the city estimates the sale would yield at least $420 million, which it wants to use to reduce -- albeit not by much -- the $5.2 billion unfunded liability of the pension fund for city employees and retirees.

The PGW sale agreement, still subject to Council approval, specifies that the UIL firm will not lay off anyone for at least three years. But Holmes of the gas workers' union predicted trouble starting in May 2015, when his members' current contract with PGW expires, leaving the new owners free to renegotiate wages, pension terms and other benefits.

The proposed sale is by far the biggest new element in Nutter's budget plan for the fiscal year that starts July 1, accounting for $700 million in new revenue and corresponding expenditures.

Other new features in the $4.5 billion spending plan include a $2.5 million boost to the Free Library to restore six-day-a-week schedules at all 49 branches _ undoing a cut made early in Nutter's tenure, over Council objections, to deal with the recession.

Departing briefly from his prepared text, Nutter said Council had been right all along, "and I apologize to the children and library users of this city for the impact of my decision back at that time."

He also proposed $2 million more for the Department of Licenses and Inspections to add 31 inspectors and support staff, in order to strengthen scrutiny of demolition projects after the Center City building collapse that killed six people last June.

The proposal includes $44 million in new money for potential obligations to members of the four municipal unions, and projects a total of $375 million for those workers over the next five years.

But Clarke objected to administration numbers that showed $145 million earmarked to meet the costs of a new contract with AFSCME District Council 47, compared to only $39 million set aside for District Council 33, with more than twice as many members.

Finance Director Rob Dubow said the DC 33 figure was based on the administration's latest contract offer -- long since rejected by the union.

"All contracts are different," Dubow said, declining to provide any estimate of what it would cost to offer DC 33 the same terms that 3,600 members of DC 47 had ratified Wednesday night.

The administration is projecting five-year contract costs of $121 million for police and $53 million for firefighters, based on 2.5-percent wage increases in each of the next two years for both unions.

Even city employees not directly affected by the proposed PGW sale saw trouble looming. Several Water Department workers who joined Thursday morning's protests outside City Hall expressed fears that if the sale goes through, their department could be next.

Nutter is "like a drug addict," John Eddowes, an 18-year city veteran, said. "He's selling everything."

Asked about it later in the day, Nutter assured reporters that he had "less than zero" interest in selling the water department.

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