Joe Ferguson, inspector general of the city of Chicago says the expiration of so many contracts at once gives the city a rare opportunity to get rid of some long-held union perks. | Ashlee Rezin/Sun-Times

Ferguson urges Emanuel to seize moment, renegotiate union contracts

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SHARE Ferguson urges Emanuel to seize moment, renegotiate union contracts

Inspector General Joe Ferguson is urging Mayor Rahm Emanuel to seize a “generational moment for Chicago” — by renegotiating union contracts to cut costs and improve city services.

Ferguson has unveiled a blueprint that calls for re-examining such treasured union perks as the “prevailing wage” and an annual family health care contribution capped at $2,228 that he claims is half the average paid by private sector workers.

The proposals, released earlier this week, are sweeping in nature because the opportunity to cut costs is unprecedented.

Contracts with more than 90 percent of the city’s 35,667 “full-time equivalent” employees either have expired or will expire on June 30.

Two-thirds of those contracts took effect nearly ten years ago, when former Mayor Richard M. Daley sought to guarantee labor peace through what he hoped would be a 2016 Summer Olympic Games in Chicago.

For Emanuel, that creates an opportunity to tilt the playing field in favor of taxpayers, Ferguson said.

If the mayor follows the script, Chicago Police officers stand to lose from Ferguson’s proposal to tighten the rules on secondary employment and cash payouts for accumulated compensatory time upon retirement that constitute a $259 million liability, according to the report.

Mayor Rahm Emanuel is being urged to save taxpayers money through union contract negotiations by eliminating some longtime perks and traditions. | Fran Spielman/Sun-Times

Mayor Rahm Emanuel is being urged to save taxpayers money through union contract negotiations by eliminating some longtime perks and traditions. | Fran Spielman/Sun-Times

The inspector general also urged the mayor to re-examine a host of contract sweeteners, including uniform allowance, tuition reimbursement, duty availability pay and the quarterly differential pay for police sergeants, lieutenants and captains.

Firefighters and paramedics would be impacted by some of those changes and Ferguson’s renewed request to take a fresh look at the minimum manning requirement that triggered the bitter 1980 firefighters strike.

But perhaps the greatest impact would be in changing Daley’s decade-long commitment to paying a prevailing wage to members of the building trades — something no other major city pays.

“This tradition is extremely costly because it pays city trades people for a full work-week at the highest rate paid to similar trades people in private practice,” Ferguson wrote.

“Because public sector tradesmen, even those paid by the hour, receive a guaranteed annual income, it is arguably unnecessary to treat them the same as their private sector counterparts who generally lack such income security for the purpose of setting hourly wages. … The parties should consider making all wages and salaries subject to predetermined scheduled increases.”

Noting that city trades got a 29.2 percent raise over the last decade, nearly triple the rate of inflation, Ferguson urged Emanuel to shorten future contracts and consider including a “mandatory mid-term re-opener” that would be triggered in the event of a “fiscal emergency” or whenever the city’s operating revenues drop below a “certain negotiated percentage.”

Jorge Ramirez, president of the Chicago Federation of Labor. | Sun-Times file photo

Jorge Ramirez, president of the Chicago Federation of Labor. | Sun-Times file photo

Chicago Federation of Labor President Jorge Ramirez said Ferguson is telling only part of the story.

“The rates are the same. But what he doesn’t get into is that the benefits are not the same. It’s significantly less that the city pays for health insurance, pensions and so forth than the guys on the outside,” Ramirez said.

Ramirez also shot down Ferguson’s argument that the 10-year agreement signed by Daley shortchanged Chicago taxpayers.

“This long-term agreement has benefited the city tremendously. There has been millions upon millions of dollars saved on health care, for example,” he said.

“What the city was able to do is have stable and long-term rates as far as wages go and, in the meantime, negotiate and implement good savings on health care.”

Newly-elected Fraternal Order of Police President Kevin Graham fired back against Ferguson’s claim that the “extent and complexity” of contract provisions make it “extremely difficult for the city to discipline employees who commit even the most serious legal and personnel rule violations.”

“The evidence grows on a monthly basis that fraudulent claims are made regularly against Chicago Police officers. Whether or not the local media wants to cover the examples of these false claims is not up to the FOP. Nevertheless, the record is clear,” Graham was quoted as saying in a statement.

Kevin Graham, president of the Chicago Fraternal Order of Police. | Sun-Times

Kevin Graham, president of the Chicago Fraternal Order of Police. | Sun-Times

Graham also noted that in previous contract talks, the union has proposed a “solution to the issue of comp time” that would allow its members to “sell back” their extra hours each year. That’s a benefit already enjoyed by “members of higher ranks,” he said.

Jim Tracy, newly elected president of the Chicago Firefighters Union Local 2, could not be reached for comment.

Ferguson’s proposal to rein in secondary employment by Chicago Police officers could be every bit as costly to the rank-and-file as his proposal to eliminate various forms of extra pay.

The contract allows the city to “limit, restrict or prohibit the nature or type of secondary employment.” But the inspector general noted that CPD has “yielded much of its authority to regulate” side jobs, relying instead on a “self-enforcement approach with no reporting requirement.”

“Research suggests that secondary employment is a significant risk factor for law enforcement performance,” Ferguson wrote.

“It can lead to excessive stress, exhaustion and burnout. Allowing unreported secondary employment by police officers also deprives CPD of a key tool for identifying red flags that can be indicators of corruption, such as unexplained income. Finally, even when operating in a private capacity, off-duty officers might act in a manner arguably constituting law enforcement. This leaves the city with avoidable legal exposure.”

To take advantage of technological advances and maximize operational efficiency, Ferguson also urged the mayor take a fresh look at restrictions on “contracting out” and at guarantees that any work traditionally done by city employees “shall continue to be performed” by those union members.”

And he recommended that Emanuel rein in “side-letters” that tie the city’s hands. There are 51 side letters in the firefighters contract and 42 more in the police contract.

Five years ago, police and fire unions torched Ferguson’s $1.2 billion budget-cutting road map that called for reducing staffing levels on fire apparatus. Still, Ferguson renewed the request in Wednesday’s blueprint.

“While it is unquestionably necessary for fire to have at its disposal a sufficient number of adequately manned apparatuses to fulfill its public safety mission, OIG cannot discern whether the numbers locked in by the current [contract] meet that standard,” he wrote.

“The parties should consider taking a rigorous, empirical look at this issue and devising a manning requirement based on an independently verifiable standard to increase flexibility while serving the city’s actual needs.”

Graham defeated incumbent FOP President Dean Angelo on a promise to take a hard line against disciplinary changes sought by the city in the wake of the U.S. Justice Department’s scathing indictment of the Chicago Police Department triggered by the police shooting of Laquan McDonald.

Cost-saving concessions negotiated by the mayor would reduce Emanuel’s leverage to make disciplinary changes, since every labor negotiation is a give-and-take. In the past, the city has focused heavily on finances at the expense of its ability to punish wayward officers.

If Emanuel chooses to seek re-election, he’s unlikely to take a hard line in contract talks with union leaders whose political support and contributions he needs to win a third term. That’s precisely what happened with police and fire unions last time around.

But if he’s looking for an excuse to cut costs, he just got one from Ferguson, whose report makes the inspector general the bad cop.

“We appreciate the Office of Inspector General’s recommendations, and as we have done continuously for six years, the Administration will seek to identify contract reforms and service efficiencies that protect taxpayers, save money, and are fair to city workers,” mayoral spokesman Matt McGrath was quoted as saying in an email.

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