STAMFORD – When city administrators requested $1.5 million more than expected to settle three union contracts, the members of the Board of Finance said no.
Don’t ask us to take the money out of the city’s general fund, comb through your department budgets and find it yourselves, the six elected fiscal watchdogs told administrators.
They have done that, administrators said at the board’s January meeting.
In fact, they found more than the $1.5 million needed to cover the added cost of recently negotiated wage hikes for police, firefighters and city supervisors, said Elda Sinani, director of the Office of Policy & Management.
“We’ve identified almost $2.7 million in savings” from job positions that were unfilled between the July 1 start of the fiscal year and the end of last month, Sinani told the finance board. “Most of the vacancies are in the police and fire departments.”
It doesn’t mean police officers and firefighters will be laid off, or even that positions will be eliminated, Board of Finance Chair Richard Freedman said after the meeting.
“Staffing levels in police and fire are almost entirely contractually determined,” Freedman said. “Eliminating positions in those bargaining units is effectively impossible.”
It does mean, though, that finance board members want more information about the $2.7 million, Freedman said.
Sinani told the board she would return in late March or early April with details about the unfilled jobs, and specifics about the cost savings.
But board members insisted that Sinani present the information at their February meeting. Budget season is beginning, they said.
Tie it with a bow
“We want to see it tied up with a bow by next month,” board Vice Chair Mary Lou Rinaldi said after the meeting. “We want them to tell us what departments it’s coming from, exactly which accounts, and what will be left for the remainder of this fiscal year. It’s a prudent way to make sure we know exactly how these contracts will be funded.”
Finance board members have said the three contracts are “too generous” to the unions and too onerous for taxpayers, who this year face hikes for the second phase of a property revaluation, augmenting a school reconstruction fund, and a large request from Superintendent Tamu Lucero for 6.4 percent more for the school budget. Mayor Caroline Simmons will make her city budget request in early March.
In unanimous votes, finance board members during their meeting approved $1 million for retroactive raises for police and $7.4 million for retroactive raises for firefighters, but held the other requests until next month.
The board released just the funds that had already been set aside, Rinaldi said.
“We approved only the money that was reserved for retroactive raises for police and fire,” she said.
Pending more details from Sinani, the board held requests for $540,606 to cover wage increases this fiscal year for city supervisors in the union known as the MAA; $2.2 million for police raises for this fiscal year; and $4.5 million for firefighters’ raises for this fiscal year.
Freedman explained how it works.
If a union contract isn’t settled before it expires, city officials estimate what the annual employee raises will be and set that money aside in the contingency fund, used to cover unexpected expenses.
If the fiscal year ends and the contract still is not settled, the money drops into the fund balance as a “future obligation of the city,” Freedman said. For each year a contract isn’t settled, the set-aside amount increases, since wage hikes compound annually.
Say, for example, that in the first year of an unsettled contract officials estimate a 2.5 percent raise for employees. They set aside 2.5 percent of the total salaries for that union in the contingency fund.
If the contract still isn’t settled the following year, officials must set aside two raises of 2.5 percent, Freedman said.
“And the cycle repeats every year the contract isn’t settled,” he said.
It wasn’t much of an issue with the MAA contract, which expired in June. It was more of an issue with the police union contract, which expired in 2022. Police officers then were owed one year of back raises, plus their raises for this fiscal year, 2023-24.
The issue got complicated with the firefighters’ contract, which expired in 2019. Firefighters were owed four years of back wage increases, plus their raises for this fiscal year.
As if that weren’t complicated enough, the amount officials estimated for annual firefighter wage increases was not what city negotiators gave them at the bargaining table.
“A key assumption made years ago under Mayor [David] Martin was that firefighters would receive a 1 percent raise in the pandemic year of 2019-2020,” Freedman said.
The reason was that most other unions took no raises that year, except police, who settled at 1 percent in 2019-20, Freedman said.
Given that, “a reasonable assumption was made that firefighters would also settle at 1 percent for that year,” Freedman said.
The 1 percent assumption was then used every year after that, he said, through the end of the Martin administration and into the administration of Mayor Caroline Simmons, who took office in 2021.
But, in fact, the firefighters’ contract was settled at 1.75 percent annual wage increases.
“The fiscal impact of under-reserving for five years is significant,” Freedman said. “The shortfall of .75 percent in year one, compounded across five years, produced a total under-reserve of roughly $1.5 million.”
The wage increase payouts for all three unions amounted to $15.5 million, but the amount the city held in reserve was $1.5 million short of that, he said.
The Board of Finance will not release the money until city officials specify how they will cover the shortfall, Rinaldi said.
There shouldn’t have been a shortfall, she said.
“They didn’t think through what was in the contracts they negotiated because they agreed to more than what had been reserved,” Rinaldi said. “I would question the wisdom of the contract negotiators because they would have known, certainly the Human Resources Department and the controller would have known, that the full amount was not there.”
It would be good to get another bit of information at next month’s finance board meeting, she said.
“Why there is $2.7 million in unfilled jobs, I don’t know,” Rinaldi said. “They didn’t explain.”