Union-busting may be all the rage in some places, but in San Jose the Firefighters Union Local 230 and the city are on the verge of reaching an agreement that would not only help cover the municipal deficit. It could also help laid off firefighters their jobs back, though the plan also cuts the number of firefighters on trucks from five to four.
According to the agreement being hammered out, firefighters would agree to a 10 percent wage cut, “inclusive of health care concessions,” for two fiscal years: 2011-2012 and 2012-2013. The aforementioned “health care concessions” are a significant component of the document, and include a rise in co-pay costs. The plan also states that “the city shall pay 85% of the full premium cost of the lowest priced plan,” with the employee paying the remaining 15%. The additional cost of higher priced plans is to be covered entirely by the employee.
The biggest concession, however, involves the introduction of a two-tiered retirement plan, and distinguishes between employees hired before and after the agreement is signed. Union President Jim Welch says that this will be the first such plan for public employees in the entire country. While the change is being hailed as a breakthrough by some, City Councilmember Sam Liccardo questions whether this will be able, “to curb the exploding trajectory of retiree costs.” As he explains, “Reducing benefits for new hires will do nothing to cut the city’s mammoth $3.5 billion unfunded retirement liabilities, and those obligations have increasingly started coming due.“
Welch has already initialed the documents, so it now remains for City Council to decide whether it accepts the Union’s proposal. If they agree to it, the union members will still have to ratify it in a vote. Mayor Chuck Reed seems willing to consider it. After all, it could save San Jose $6 million.