Sustainable Costs and Inconvenient Facts – 5/19/2011

Posted by Bob on May 19, 2011 under Daily Blogs | Be the First to Comment

This morning’s (5/19/2011) editorial in the Waterbury Republican-American addresses the frustrations expressed by many municipal officials regarding public sector pensions.  While print newspapers rarely provide a name to their editorials, the author discusses the provision in the collective bargaining agreements (“CBA”) between the Borough and local firefighters which allows members to retire with disability pensions for non-work related injuries and/or illnesses.

Our administration has consistently maintained that the Borough can not sustain certain benefit levels for the next generation of municipal employees.  Unlike some who seem to use CBA’s as an excuse, we have actually been successful in negotiating that new hires in five (5) of our seven (7)  municipal bargaining units receive defined contribution pension plans similar to the private sector 401 (k)’s.  The benefits of such policy will take years to reap results, but this is a significant step toward fiscal responsibility in the long term.

The editorial gives credit to a particular elected official for advocating renegotiating such pension provisions in CBA’s.  The particular agreement between the Borough and the Firefighters collective bargaining unit (“CBU”), covering the period from July 1, 2005, through June 30, 2009, can be viewed here.  The provision in question is contained on page twenty two (22) of the CBA.  It is interesting that the Borough signature on page thirty nine (39) of the CBA looks similar to the elected official receiving praise for advocating renegotiation of such provisions.

Our administration inherited this expiring CBA after the election in May of 2009.  While this normally would present a great opportunity to negotiate changes to benefit the Borough, our negotiating team was forced to address another pressing issue. The previous administration budgeted for wage freezes during the 2009-2010 budget process, which concluded prior to the election.  While this was certainly understandable given the recession that had engulfed the nation, the wage freezes had not been approved by all of the Borough’s seven (7) municipal, collective bargaining units, several of which had years remaining on their respective agreements.  The focus of negotiations, given that budgetary restrictions, was to achieve the wage freezes for 2009-2010.  In some cases, this required opening existing agreements. Some expiring agreements, including the Firefighters CBA, were extended to achieve the freeze.  Given the collective bargaining system under which Connecticut municipalities operate, this made achieving more sustainable and systemic concerns addressing health care and pension benefits much more difficult.

As I have stated previously, the Borough can not sustain the level of benefits it provides to the next generation of municipal employees.  That is not to say that we would not like to do so in a perfect world, but math is math and the economic realities in which we live force us to think about long term consequences.  Wages have always been the most sensational part of collective bargaining agreements.  The headlines wages receive in print and online media often do not mention the costly details of collective bargaining agreements.  Achieving one (1) year fixes by focusing solely on wages requires work and expensive legal bills, but is certainly possible.  Doing so at the expense of addressing the long-term, sustainable cost issues is a bad business practice that we can not afford.  (Please view a previous post on this topic here.)  Most elected officials who subscribe to this philosophy realize that it is not the most politically beneficial policy as they may be long gone before a true sustainable government can actually be achieved.  Hopefully, however, those entrusted to determine public policy in Naugatuck will think how their respective votes and actions will impact future budgets beyond each individual year.

Intelligent negotiating strategy and time are the only way to address the provisions of collective bargaining agreements that taxpayers find most distasteful.  There is no quick solution to repair years of shortsighted decisions.  Rhetoric and a selective memory of the facts will not save the Borough a dime.