Retroactive paychecks with a $45 million pricetag for Chicago taxpayers were mailed Friday to 4,645 firefighters and paramedics—12 days earlier than required under their newly-ratified contract.
The age-old promise that, “The check is in mail,” literally came true, more than two years after the old contract expired. Back pay was due in firefighters’ hands within 75 days after the City Council ratified the new contract.
Instead, City Hall completed the painstaking process of calculating individual employee checks earlier than expected, and put the checks in the mail.
The retroactive payment totals “between $40 million and $45 million” and includes “salary, overtime pay, special pay and pension payments” since June 30, 2012, when the old contract expired.
Top mayoral aides said no short or long-term borrowing was required to cover the retroactive pay raises and other payments.
That’s because Mayor Rahm Emanuel reserved funds in his 2013 budget to cover the “anticipated retroactive amount.”
The same cannot be said for $65 million in retroactive pay raises owed to Chicago Police officers.
Budget Director Alex Holt has ruled out long-term borrowing, but opened the door to short-term borrowing to be paid back over the life of the contract, which expires on June 30, 2017.
Earlier this year, Emanuel convinced the City Council to double — to $1 billion — a “commercial paper” program used to tide the city over between bond issues.
“It’ll be some mix of current cash and, if there is any borrowing, it will be short-term borrowing only paid for over the life of the contract, which expires in 2017,” Holt said last month.
“If you look at AFSCME and fire and the other contracts, we’re paying for it under current cash. The amount you’re talking about here is quite significant. To the extent possible — without impacting services people rely on — that’s what we do. To the extent we can’t, there would be some mix. We need to balance the need to pay retro [and] maintain services. We’ll see. We have to see what the final numbers are, but [the mayor’s] orders are quite clear.”
Tom Ryan, president of the Chicago Firefighters Union Local 2, could not be reached for comment on the earlier-than-expected retroactive payment.
The new, five-year contract calls for Chicago firefighters, paramedics and emergency medical technicians to get an 11-percent pay raise over five years, but ends free health care for those who retire between the ages of 55 and 65.
After Dec. 31, those retirees will be forced to contribute 2 percent of their annuities toward the cost of their health insurance until they’re eligible for Medicare.
All 15 of Chicago’s basic-life-support ambulances will be converted to advanced-life-support, giving Chicago 75 ambulances capable of administering the most sophisticated level of care.
The 11-percent pay raise is only a “floor.” If the Illinois General Assembly mandates a pension contribution higher than the current 9.12 percent, the Chicago Firefighters Union Local 2 can negotiate an even bigger pay raise.
The pre-Medicare fee for retiree health care was one of the only givebacks Emanuel was able to wring out of Local 2.
The mayor came up empty on his laundry list that took aim at treasured union perks such as holiday and duty-availability pay; clothing allowance; pay grades; premium pay; non-duty lay-up coverage; the physical fitness incentive; and the 7-percent premium paid to cross-trained firefighter-paramedics. Nor did the union agree to Emanuel’s plan to have “double houses” — stations with both engines and trucks — to be staffed by nine firefighters instead of 10.
Instead, Emanuel settled for what City Hall sources have called a “vanilla” agreement in hopes of creating a “collaborative atmosphere” that will set the stage to solve the city’s pension crisis.
In 2016, Chicago is required by state law to make a $550 million contribution to stabilize police and fire pension funds that now have assets to cover just 30 percent and 24 percent of their respective liabilities.
