The Chief
July 8, 2005

PBA Pact: ’88 In The Shade

By Richard Steier

“It works for veterans,” one Police Officer who’s already at maximum salary said of the June 28 contract arbitration award that gave members of the Patrolmen’s Benevolent Association a 10-percent raise over two years.

But, he added, in a reference to the sharp reduction in starting salary and the inferior pay scale for future cops that helped offset the cost of the raises, “ I feel bad for the guys that are gonna be coming on the job. They’ll have two years in college, maybe four years in college, and you’ll expect them to take a job for $25,000?”

“Do I think it’s gonna be a problem?” a female officer said when asked about the impact the reduced pay scale would have on recruitment. “Yeah.”

“It’s horrible,” chimed in another veteran, who like the others was unwilling to be quoted by name.”

Might As Well Get Welfare’

A younger officer remarked, “You’re talking about a salary that, if you’ve got a family, you might as well file for public assistance.”

They were speaking less than 36 hours after the arbitrators issued their award. The wage hikes went well beyond what civilian employees had received under a wage pattern set by District Council 37 that provided 5 percent in raises (6 counting an additional 1-percent productivity hike that the union disclosed that afternoon) over three years. In fact, they were more than a point above the annual wage hikes cops in Nassau County and at the Port Authority received for the comparable period in 2003 and 2004.

But DC 37’s selling of its unborn to finance part of its wage hike seemed like a mild spanking compared to the abuse inflicted on the future generation when the PBA’s representative on the arbitration panel agreed to the reduced pay scale for cops hired beginning next year.

The DC 37 contract 15 months ago put starting pay, which had been 7.16 percent below the rate for incumbents, at 15 percent below the regular rate and extended from one year to two the period in which new workers got the reduced salary.

The PBA award goes much further in shortchanging the unborn. The new first-year salary amounts to $28,900, which is 79 cents on the dollar compared to the old rate of $36,878 and about 71 cents compared to the $40,658 that will be paid to the rookies who begin Police Academy training next week. But to appreciate just how badly those future hires will be hurt, you have to look at the full change in the pay scale, with the progression to maximum salary now spread over 5 ½ years rather than 5.

It isn’t the extra six months so much as it is the slower advancement on the scale as they go. Next week’s class by July 2007 will have a base pay of $44,145. Next January’s recruits, by contrast, will not reach $44,100 until July 2010, when they mark their 4 ½ year anniversary of service.

A $48,000 Difference

During their first six years on the job, members of next week’s police class currently stand to receive base pay totaling $280,806, subject to future increases won by the PBA. Next January’s class over its first six years in the NYPD will receive $232,644 in base pay, meaning the stretch will cost them $48,162.

Examine those numbers carefully enough and it’s not hard to understand why Mayor Bloomberg, despite the strain the PBA award puts on the city budget in the short term – before the productivity gains kick in – could hail the award and claim it “will reduce overtime costs and generate the cost savings necessary to pay our Police Officers more.”

His reference to overtime savings centered largely on another component of the award, which increases from 10 to 15 the number of days the NYPD can reschedule officers to work without having to pay them overtime.

Until now, according to one city official, the NYPD has not been stringent about taking full advantage of rescheduling rights, perhaps figuring that officers who had been working nearly three years under an expired contract would view it as piling on. That is likely to change, as the Mayor looks to get some relief from the cost of the police raises by trimming the NYPD’s overtime spending.

The problem with the award, from the city’s standpoint, is that all the productivity gains are prospective, while the raises are retroactive. Most cops will be entitled to back pay of $13,000 or more from Aug. 1, 2002 when the first raise is effective and continuing to the present, even though the award’s expiration date was last July 31. But the savings from the elimination if a personal day for all officers and from greater flexibility on rescheduling are first taking effect, and the reduced salary scale won’t be imposed until January.

Contracts are costed using an 11-year model, however, and the Mayor and Labor Relations Commissioner Jim Hanley both said that the concessions imposed on the PBA will save the city 5.5 percent, meaning the true long-term cost of the award is a bit less than 5 percent. Once that 11-year period runs out, according to one contract expert who was not involved in the PBA arbitration, “the city could come out ahead” as an increasing percentage of the force is comprised by officers hired under the reduced pay scale.

Hiring Not a Factor

The chairman of the arbitration panel, Eric Schmertz, said in an interview a day after the decision was reached in the wee, small hours of June 28 that he hadn’t considered the impact of the stretched pay scale on the NYPD’s ability to recruit qualified candidates when he put the award forward for approval by his colleagues PBA representative Jay Waks and city representative Carol O’Blenes.

“My focus was totally on what (the award) would do to the salary structure for the incumbents,” Mr. Schmertz said.

It wasn’t, he said, that he was unaware of the potential recruiting problem that would be caused. “In my mind, it was a consideration,” he acknowledged. “But you’ve got to consider that the city representative signed on to that award. You would have to assume that the city representative raised that issue with the (Police) Department.”

Nor, he said, had the PBA representative argued against the pay scale stretch as harmful to recruiting, even though PBA President Pat Lynch sounded that theme after the award was issued. Mr. Schmertz declined to comment on whether, as Mr. Hanley contended, it was the PBA that proposed the pay stretch to offset the cost of the raises.

“That’s What They Wanted”

The city Labor Commissioner said there were other areas the Bloomberg administration preferred to explore for savings rather than the reduced pay schedule. “This is the direction the PBA insisted on with the arbitration,” he said in a June 29 phone interview.

Mr. Lynch didn’t directly respond to Mr. Hanley’s claim that the union put the pay stretch on the arbitration table, merely saying that it was the city that had presented the evidence regarding savings from such a stretch.

Asked why the union rep on the panel, Mr. Waks, signed off on the stretch if it was considered so onerous, Mr. Lynch responded that it was the lesser of the bad choices open to the union if it wanted the 5-percent raises. The other option presented, he said, would have permanently stuck future hires with 10 fewer vacation days, eight fewer paid holidays and a lesser night differential than incumbents receive.

“That was even more draconian,” the PBA leader said.

Rank-and-file cops did not fault the PBA for pushing the pay stretch or signing off on the award despite the reduced compensation for future hires. One of them said of Mr. Lynch, “His responsibility is the people who are on the job, who are paying dues today. I feel bad for the guys that are gonna be coming on the job. But it’s not the PBA’s responsibility to recruit; it’s the Police Department’s.”

Could Address It Fast

Mr. Schmertz said that one benefit of the fact that the contract award has already expired is that it gives both sides the opportunity to swiftly revisit the reduced pay for new hires if recruitment for the January class proves to be a problem.

The split first-year salary for new hires – a pro-rated $25,100 for the six months spent in the Police Academy and a pro-rated $32,700 for the first six months on patrol – is not, contrary to what some Police Officers believed, the lowest in the New York area. Nassau County under a 2003 arbitration award has a similar split salary that comes to just over $26,000 compared to $28,900 for future city cops.

But new Nassau cops jump to $35,000 after one year on the job and then to $43,244 six months later, while future NYPD officers upon reaching the 18-month mark will be getting only $34,000. The gulf grows more pronounced with experience: the new maximum under the PBA award of $59,588 pales before the $82,843 that Nassau cops got by the same point in 2004, and a 3.9-percent raise that took effect for them last week pushed top pay to $86,054.

Looking Up At Yonkers

Mr. Schmertz said, “Nassau is not the best standard [for comparison] because Nassau and Suffolk pay so much more than anywhere else. But when cities that have their own fiscal problems, like Yonkers and Elizabeth, pay more, then you have a disparity.”

In the opinion he wrote accompanying the panel decision, Mr. Schmertz noted that maximum pay for Yonkers cops was $68,579 and those in Elizabeth, New Jersey at top salary got $71,436. While city officials argued that NYPD cops largely made up for such gaps through superior fringe benefits in areas ranging from pensions to health coverage, Mr. Schmertz said the only pronounced advantage enjoyed by city Police Officers was their entitlement to a Variable Supplements Fund payment that currently amounts to $11,000 a year at retirement.

“There’s an obligation, it seems to me, to pay competitive salaries to employees,” he said. “Cops are terribly critical and firefighters are terribly critical. Well, how dedicated is a policeman or a fireman when they look across a contiguous border and see someone making much more money and they have less stress and lesser responsibilities?”

It seemed like an argument for granting the pay hikes he proposed without taking so much of the value out of the hides of the unborn. Mr. Schmertz, who noted that he had been a member of the city Board of Collective Bargaining during the 1970’s fiscal crisis, said he had to be mindful of the Taylor Law requirement that ability to pay be a consideration in granting any pay award and the city’s demand that he “consider the impact on the general budget.”

Trooper Deal Irrelevant

He hadn’t even considered the relevance of the Pataki administration’s decision in late May to pay State Troopers over $2,500 in “expanded duty pay” for anti-terrorism work in addition to basic pay hikes of 3 percent a year. By that time, Mr. Schmertz pointed out, both sides had concluded their oral and written cases in the PBA arbitration, and so to weigh the Trooper contract, “I’d have had to reopen the proceedings.”

The other argument raised by the city that invoked larger forces involved the impact a PBA award would have on other unions, particularly among the uniformed forces. As it turned out, however, the arbitrators may have created a greater problem for those unions than for the city, notwithstanding the significant pay hikes.

Like ’88 PBA Deal

The structure of Mr. Lynch’s deal evokes memories of the 1988 contract negotiated by then-PBA President Phil Caruso, who used a similar stretching of the pay scale – in that instance slowing the climb to maximum salary to five years, compared to the old three-year progression – to pay for a huge increase in longevity benefits.

Because the turnover rate for Police Officers was higher than for any other uniformed group except Correction Officers, city officials argued that they would not receive the same savings from stretching the pay scales for firefighters, superior officers in the NYPD and cops in the Transit and Housing Police Departments. As a result, they demanded greater concessions in return for the same benefits. The struggles those unions had in coming up with proposals that satisfied the city led to an unusually high turnover rate among uniformed union presidents, with at least five of them losing elections over the next three years that pivoted on the membership anger over contract disparities.

Sought Assurances

Back then, as now, the other uniformed unions decided to put their own contract talks on hold because they believed the PBA had the best chance of creating a favorable pattern that the rest of them could follow. They never anticipated that Mr. Caruso would reach a deal tied heavily to attrition rates that would leave them at a disadvantage.

This time around, that bit of history loomed over the uniformed talks, and there are officials who insist that Uniformed Firefighters’ Association President Steve Cassidy deferred to Mr. Lynch only after being assured that he would not pursue an attrition-based deal, either in bargaining or in arbitration, that city officials could use as leverage against the UFA leader.

Mr. Lynch said he had told other union leaders he had no intention of negotiating an attrition-based contract. “This was not negotiation; this was arbitration,” he said, suggesting that the structure of the panel’s proposals made it impossible to hold to his original plan.

Uniformed Fire Officers’ Association President Pete Gorman questioned the implications that Mr. Lynch’s hands were tied in the arbitration. “From what I understand, there was some give-and-take here,” he said. “I think Pat was trying to get the biggest cash award.”

Trouble for UFA?

In contrast, Captain Gorman noted, three years ago Mr. Lynch had turned down a more lucrative arbitration proposal because it would have extended incumbent Police Officers’ tours.

“I don’t like attrition bargaining or selling the unborn because I think that’s damaging to labor,” Mr. Gorman said.

Mr. Cassidy described his conversations on that subject with his PBA counterpart this way: “Pat Lynch said that he was going to do everything in his power to get a contract just based on a salary increase.”

Told that Mr. Hanley said that it was the PBA that put the pay stretch proposal on the table during the arbitration, Mr. Cassidy said with some surprise, “He said that? On the record?” added, though, “I will not second-guess Pat. I’m not concerned that we can’t match that deal. I think we finally have a benchmark for negotiations.”

Other uniformed union leaders weren’t so sure. “The appearance of it is it could cause problems,” said Sergeants’ Benevolent Association President Ed Mullins, alluding to the lower turnover rate among his members compared to Police Officers. “Right now we’ve gotta get the numbers.”

He also wondered whether the gains under the PBA deal outweighed the losses. “Five and five, that’s a good number,” Sergeant Mullins said of the raises. “But at what cost?”

A similar sentiment was expressed by Lieutenants’ Benevolent Association President Tony Garvey. “In looking at the last contract, there’s something to be said for negotiating a settlement,” he said, alluding to the Uniformed Forces Coalition having bargained its own deal in 2001 before the PBA went to arbitration the following year. “In the last round, we set the pattern and we gave up nothing.”

No Promises, But…

While Sergeant Mullins denied that Mr. Lynch pledged not to pursue an attrition-based contract, saying, “there were no promises made,” Mr. Garvey had a different interpretation of their conversations. He said that Mr. Lynch “expressed that intent, not to do attrition bargaining.”

If such a pledge was given, Mr. Lynch probably meant it at the time. The pressures of running the PBA should not be underestimated, however: there were reports last week of cops being enraged not because of the bite the award takes out of future hires but because they firmly believed the union would get raises of 8 or 9 percent a year in the arbitration. Such expectations were not reasonable in the current bargaining climate, and so Mr. Lynch may have felt compelled to let his representative sign off on an attrition-based deal to ensure that the raises granted were meaty enough to prevent the unreasonableness from infecting too large a segment of his rank and file.

Mr. Cassidy could have a dilemma on his hands, particularly if the city makes its upcoming arbitration case against the UFA by using attrition numbers for the year before the contract expired, as has been the traditional practice. The union is sure to argue that going back to 2001 for attrition numbers in dealing with a contract period that for the UFA will begin June 1, 2002 is unrealistic because Firefighter attrition in 2001 was far below the numbers in the years since as a result of the reaction by union members to the grievous losses suffered on Sept. 11.

Cassidy Blames DC 37

Mr. Cassidy said during a June 30 phone interview that he believed the turnover rate among Firefighters was no longer below that among cops, dismissing the possibility that the city will argue police attrition is also running higher than four years ago. The irony of such an argument, if you believe the PBA, is that the higher turnover rate among cops is more traceable to frustration over low salaries than it is to the emotional fallout from 9/11.

Mr. Cassidy said Mr. Lynch was handicapped from the outset by the DC 37 deal. The PBA award, he said, “should be a clear signal to the civilian unions that next time they should wait for either the PBA or the UFA to go first” to gain a more favorable pattern.

The police and fire unions believe the city has failed to recognize at the bargaining table both the sacrifices their members made four years ago and the added duties they have assumed in response to the continuing terrorist threat. The PBA’s frustration over that, and the hard feelings that have developed between union and city officials over the course of four wage arbitrations since 1991, account for what Mr. Schmertz characterized as a “confrontational relationship” between the two sides. He wondered “whether good-faith bargaining by both sides took place” or whether it was inevitable that they decided to carry the bad feelings into arbitration at the first opportunity.

“I think this particular situation is unfortunate and they basically distrust each other,”” he said during the interview in his law firm’s midtown offices. “They don’t believe what the other says and they don’t believe each other’s numbers.”

`Won’t Ease Distrust’

Could an award that created a wide gulf between compensation for incumbent cops and those hired in the future do much to ease that distrust? “I don’t think the award will make it any easier,” Mr. Schmertz said. “I took the liberty of raising the warning flag. But it’s symptomatic of the problem that four of the last five PBA contracts had gone to impasse and then to arbitration. It seemed to me that this was not what the persons who wrote the Taylor Act had in mind. The Taylor Act should be amended; it should not allow three years to go by after a contract expires before you go to terminal arbitration.”

He suggested that the Taylor Law be changed to require outside intervention within six months of a contract expiring. If such a change were made, the PBA would be back in arbitration already, seeking another two-year contract award.

When the union won the right seven years ago to have its arbitration cases heard under the rules of the state Public Employment Relations Board rather than the city Office of Collective Bargaining, the PBA and other police unions described it as a major breakthrough that would soon have them closing the gap in wages that existed with neighboring suburbs.

This was the first time strides were made in that direction, but only at the expense of future PBA members. And as much as the PBA, in Mr. Schmertz’s view, shares a mutual distrust with the city, it also has a certain uneasiness about the PERB process that didn’t exist when it gained the right to switch venues under former PBA President Lou Matarazzo. Otherwise, how does one explain the union’s reluctance to take advantage of the state arbitration rules to entertain a four-year proposal after the union advised its members that in Mr. Schmertz the panel had a chairman too independent to knuckle under to city pressure?

When Mr. Schmertz asked PBA officials if they would be willing to discuss an award that exceeded the 24-month maximum that is required unless both sides consent, the union balked. As a result, it will never know whether Mr. Schmertz would have been able to make good on the sentiment expressed in his opinion that Police Officers deserved increases of at least 20 percent but phased in over a four-year period.

`Could Live With It’

Mr. Hanley declined to comment on whether the city would have agreed to a 20 percent raise, but he said of Mr. Schmertz’s proposal for a four-year deal offering significantly improved compensation, “We were willing to live with it and pursue it with the appropriate funding mechanisms. The PBA did not want to go down that road.”

Mr. Lynch said he was convinced the Bloomberg administration would drive an equally hard bargain before agreeing to a 20-percent raise over four years. “The city absolutely refused to solve the problems for my union and the recruitment problems” in bargaining, he said. He questioned Mr. Schmertz’s conclusion that it would have been “irresponsible” to provide the 20-percent hike in a single two-year package.

However unsatisfactory the two arbitrations before PERB have been for the union, Mr. Lynch said the PBA was still better off working under the state rules for dispute resolution. “As difficult as this process is,” he said, “it’s better than what we had under the office of Collective Bargaining.”

The police class of 2006 might not agree.