The Morning Report
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Monday, April 23, 2007 | With one contract with police officers nearly sealed and another with firefighters on the rocks, Mayor Jerry Sanders will use his planned health care reforms this week as a key selling point to push the firefighters’ contract through a recalcitrant City Council.
Sanders wants to shrink the amount of health care options available to employees, saying that the 21 options spread out between city and union plans are unnecessarily costly. His office also says the current system allows workers to simply cash out their entire allowance rather than use it for health care. To enact his changes, Sanders wants to bring the administration of health care all under the city’s roof; employees have long had the option to choose between competing plans offered by the city or the union.
The Push Is On
Such a maneuver will save the city money in two ways, mayoral aides said. It will give it the ability to purchase in bulk, increasing its buying power and lowering its costs. The size of the benefit for certain employees — largely those who are unmarried or childless — would also shrink.
So far, Sanders has converted two of the city’s five unions to his new system, and he hopes to eventually get all five there.
In a deal finalized with police officers last week, the officers union agreed to the new structure. The trimmed down plan is expected to save the city $775,000 this year in health care premiums for officers alone, moving the administration of health care for police officers solely under the city’s administration.
Union officials said the deal will benefit those officers who were fleeing the force — the ones with families — while shrinking the benefits of those who previously waived health care.
But police’s new deal has a catch: it can be undone if firefighters don’t make the same switch.
Unable to come to a deal with the firefighters, the mayor has recommended to the City Council imposing a one-year contract on them that would keep in place a salary freeze and convert them to the new health care system.
That plan has hit a snag. Last week, a number of members of the City Council expressed a desire to craft their own labor plan with firefighters and give them a raise. Because of a number of absences at council last week, the issue went unresolved and will be taken up again Tuesday at City Council.
The mayor hopes to save an additional $664,000 a year with the firefighters’ health care change. However, the prices negotiated for the city for the police union rely on the firefighters’ inclusion in the new health care.
“If the council does not impose the system on the firefighters, the reform will be scuttled, our buying power will be reduced and our rates will go up dramatically,” Sanders said when unveiling his budget earlier this month.
Under the current system, employees are allotted a flat $5,575 that can be spent among the 21 different health, dental and vision plans available between the unions and the city. However, if the employee chooses not to use those health care options, the full $5,575 can be cashed out, rolled into a 401(k) or used to purchase such things as life insurance.
The police union says the new plan gives greater assistance to those with families, while acknowledging that some of the savings comes at the expense of those who had previously opted of the health care and taken the cash.
For example, the 360 officers who currently waive health care coverage would see their cash payout drop from $5,575 to $1,000.
Conversely, an officer with two dependents who once saw the city cover 48 percent of health care could see that figure rise to 75 percent under one model. That means the officer would be paying $2,538 out of pocket for health care, compared to $5,205 under the previous structure, according to figures provided by the Mayor’s Office.
“Our people with families and one dependent are bleeding out,” said Jeff Jordan of the Police Officers Association. He added: “You had to do something to stop the bleeding.”
But, in agreeing to the health care reform, the police also were agreeing to pay raises of between 8 percent and 9 percent. Other unions won’t see such a carrot to entice them to accept the health care package.
Ron Saathoff, president of the firefighters union, said there’s a reason why unions began offering their own competing plans: because the union plans are better for workers. He said the new proposal adversely impacts workers and gives the city carte blanche control over the administration of health care — meaning the city would have the power to increase costs to workers down the line.
“We are certainly not supportive of a plan that shifts money and reduces benefits,” Saathoff said.
The mayor’s proposal for the firefighter contract includes no raise; Council President Scott Peters and Councilwoman Toni Atkins have said they support giving firefighters a raise.
The deputy city attorney union had the new system imposed upon them by the mayor this year. The remaining two unions, those representing white-collar and blue-collar workers, return to the bargaining table next year.
Officials with the blue-collar union, the Association of Federal, State and Municipal Employees Local 127, said they’re ready to buck the current system. The union, they said, wants a board of directors to administer the plan, not the city. But they do not want to continue handling health insurance for their members.
“We can’t wait until the day we’re out of the business,” said Ed Lehman, the union’s business representative.