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Fire contract will cost Phila.

Arbitrators largely let stand an award with three years of raises, no right to furlough.

Philadelphia firefighters battle a blaze last year at the Julia de Burgos school on Lehigh Avenue in North Philadelphia. (David Maialetti / Staff Photographer)
Philadelphia firefighters battle a blaze last year at the Julia de Burgos school on Lehigh Avenue in North Philadelphia. (David Maialetti / Staff Photographer)Read more

In a blow to the Nutter administration's hopes for cost savings, the city's firefighters won three years of 3 percent raises from a panel of arbitrators who largely let stand an initial award from October 2010.

The three-member panel also denied the city the right to furlough the city's 2,100 firefighters and medics, as the earlier award also had done.

The wage and benefit increases are expected to cost Philadelphia as much as $66 million over the four years of the contract, which expires June 30, 2013, according to the award, released Monday.

The award is the result of about 20 months of legal wrangling following the initial arbitration award. Contracts for firefighters and police are generally resolved through arbitration.

The contracts for AFSCME District Councils 33 and 47, which represent other municipal employees, expired in June 2009 and are still being negotiated.

The arbitration panel's decision on the firefighters contract raises immediate financial questions for a city budget already gasping for revenue and savings. Philadelphia may have to come up with a lot of cash to pay that quickly, since the arbitration award covers the period from 2009 through 2013, said Sam Katz, chair of the of Pennsylvania Intergovernmental Cooperation Authority, a state-appointed board that oversees the city budget.

"There is an immediate cash problem that is going to impose itself on the city," Katz said.

The award contains no salary increase in the first year.

The Nutter administration had assumed no wage increases for firefighters and $2.7 million in yearly cost savings from furloughs over the span of the contract.

Mark McDonald, a spokesman for Mayor Nutter, said the administration was reviewing the most recent arbitrators' decision and had no immediate comment. The city has 30 days to decide whether to appeal.

The city appealed the original ruling in November 2010, arguing that it was too costly. In November 2011, a Common Pleas Court judge sent the contract dispute back to the arbitration panel that reached the decision.

Bill Gault, president of Local 22 of the International Association of Fire Fighters, urged city officials not to appeal again. "The economics remain largely unchanged from the last award and neither side got everything it desired," Gault said. "Enough is enough. The terms of this contract will end in [a few] short months and then we'll start the whole process all over again."

The award continues to require firefighters to live in the city. In their last arbitration, Philadelphia police won the right to live outside the city.

The panel included Kenneth M. Jarin, who represented the city; Stuart Davidson, for the union; and Michael Zobrak, the chairman and neutral member.

In his dissenting opinion, Jarin said he was "profoundly dismayed" that Zobrak "utterly and completely abdicated his statutory responsibility to issue a fair award."

He said the contract would impose "more than $200 million in unbudgeted costs" and create deficits "in every one of the next four fiscal years."

Zobrak argued that the city had the means to pay for the increases. He cited Philadelphia's decision not to appeal the police arbitration award, which also included raises, as well as now-improving city finances. Nutter has argued that the police contract was different because it included crucial savings such as the ability to furlough.

Jarin's estimate of more than $200 million in higher costs projected the contract's changes over eight years, a method that Zobrak said he found questionable.