Some on Council Balk at Raises in Union Contracts

By Ann E. Marimow
Washington Post Staff Writer
Tuesday, April 8, 2008

Montgomery County Executive Isiah Leggett has signed off on union contracts that would provide most firefighters with a 28 percent pay increase over three years and enhance retirement benefits for some police officers and other government workers.

Leggett's negotiators say the changes are necessary to compete for talent and provide high-quality services in the high-cost Washington region. Critics contend that the deals are overly generous at a time when Leggett (D) has proposed budget cuts and the largest property tax rate increase in two decades to close a projected $297 million shortfall.

The labor agreements, which need the County Council's approval this spring, would cost taxpayers more than $40 million over three years.

Council member Phil Andrews (D-Rockville-Gaithersburg), who chairs the Public Safety Committee, called the contracts "unsustainable, unnecessary and unrelated to real-world economic conditions," and he urged his council colleagues to reject them.

"It's difficult, although necessary, for elected officials to occasionally say no. This is one of those years," he said.

Joseph Adler, who as the county's human resources director oversees labor negotiations, said Montgomery lags behind other jurisdictions in salaries.

"To get the best talent, we've got to be competitive," he said. "I realize if you take the numbers in isolation, they look like a lot, but even with the increases, we've not jumped to number one in this area."

John Sparks, president of the Montgomery County Career Fire Fighters Association, said the county is playing catch-up for its 1,050 firefighters and paramedics. Rookie firefighters are paid $39,997, compared with $44,301 in the District, $40,784 in Prince George's County and $47,472 in Fairfax County. Among jurisdictions such as Montgomery with more than 500,000 people, the average salary nationally is $44,275 for starting firefighters.

Gino Renne, president of the county's Municipal and County Government Employees Organization, said that public safety salaries have lagged in Montgomery for some time and that the county is just beginning to address the issue.

Salaries and benefits for the county's 34,000 workers account for about 80 percent of the $4.3 billion budget blueprint for fiscal 2009.

As part of the contracts, the county would increase its contribution to the retirement accounts of more than half its general government workers from 6 to 8 percent of an employee's salary. The pensions of the longest-serving police officers would increase from 76 percent to 86 percent of their average pay for the final three years on the job.

Firefighter salaries would increase 4 percent in fiscal 2009, 4 percent the next year and 7 percent in fiscal 2011. In addition, most firefighters would continue to receive 3.5 percent annual step increases.

Sparks said the union is well aware of the fiscal challenges facing the county, and the highest raises are scheduled to coincide with an anticipated economic rebound, "when there will be more resources to be able to afford it."

The raises are also in line with the three-year contracts Leggett agreed to last year for police officers and general government workers, which were 29 percent and 26 percent, respectively, over three years for most employees.

For the school system's 21,000 employees, school officials signed off on general raises of 4.8 percent, 5 percent and 5.3 percent. Two-thirds of employees will continue to get annual incremental raises. The average salary for Montgomery's beginning teachers, 61 percent of whom have master's degrees, is $50,900.

Kerry Ryan, a firefighter at the Twinbrook station, called the raises "a little progress." She and her husband, Jaymie Birney, a firefighter at the Rockville station, have given up searching for a home they can afford nearby and are moving from a rental apartment in Rockville to a townhouse in Howard County.

"If I protect this community, then I should be able to live in this community," said Ryan, 26, who grew up in the county.

Under all of the new contracts, the county would save money on health care by relying more on generic drugs and encouraging employees to fill prescriptions through the mail. The county would continue to pay 80 percent of the standard health-care plan, but employees who choose additional coverage would have to make up the difference in cost.

"Employees are doing their part," Sparks said.

Adler said Montgomery has moved to control costs by setting up a 401(k)-style "defined-contribution" retirement plan for non-public safety employees hired since 1994. Others Washington area local governments have more traditional and more costly "defined-benefit" plans, he said.

Under another contract provision, most general government workers would have a one-time option to change to a retirement plan with a guaranteed return of 7.25 percent on employee and county contributions. Consultants hired by the county assume that the pension fund will achieve an 8 percent return and that the county will actually make money, Adler said. As of last month, though, the 10-year investment return on the county's pension fund was 6.85 percent.

"In the long run, it will work itself out," Adler said.

Discussions about contracts for firefighters, police and general government workers began last year as Leggett announced that the county was facing its deepest-ever budget shortfall. He called on the council to make mid-year budget trims and instituted a hiring freeze. Last week, Leggett issued another warning, telling council members, "This is the year to draw the line and say let's not go any further."

Council President Michael Knapp (D-Upcounty) said Leggett's approval of the contracts appears to run counter to his message about the need to slow down spending.

"One would have thought that a more conservative approach would have been taken," Knapp said. "It looks like we're trying to play both sides. Do we have bad economic times, or do we need to have generous increases in our contracts?"

In a prepared statement, Leggett called the contracts "consistent with agreements throughout the region" and said Knapp does not fully understand collective bargaining. Leggett said he has limited flexibility because of past decisions by the council and the school system and because of the possibility of binding arbitration in the event of an impasse. He cited the council's approval in 2006 of a $13 million enhancement to pensions for school system employees.

"I believe the Council President voted in favor of additional pension enhancements and every collective bargaining agreement that has ever been placed before him, thereby establishing less than favorable conditions in which future executives must negotiate," he said in the statement.

The council, which controls the county's checkbook, is supposed to signal by May 1 whether it intends to approve the contracts. In the past 20 years, the council has said no to minor provisions but has not rejected a contract outright.

The thick documents are difficult to decipher even for seasoned council aides, and last week council members were just beginning to digest the fine print.

Duchy Trachtenberg (D-At Large), who chairs the council's fiscal policy committee, said that it was too soon to say how she would vote but that she is generally concerned about spending.

"Expenses have to be controlled, and clearly one of the biggest items we spend money on are the employee contracts," she said.

Marvin Weinman, president of the Montgomery County Taxpayers League, urged the council to hold a public hearing to examine the contracts.

"They are creating problems for the future by awarding contracts of that magnitude," he said. "The public doesn't seem to understand, and the public needs to be involved. It's their money."

For council member Nancy Floreen (D-At Large), it is a question "of how we treat our employees. . . . Getting residents the best and the brightest to serve them is an expensive proposition, no question about it."