CREATED Dec. 18, 2012
The Omaha City Council approved a new fire contract that will start soon. The City of Omaha and the firefighters union have been running on a contract that expired almost two years ago. A contract that councilmembers say was egregious.
In a 6-1 vote the Omaha City Council approved a new fire contract, which was agreed upon by both sides. It's technically for four years, but will go through 2014. Most felt it was in the best interest of the city dealing with a $680 million Unfunded Pension Liability.
"Here's the bottom line. The city got pension reform that's going to make this pension long term viable, the city got health care reform which puts money in the taxpayers’ pockets indirectly, the city achieved goals it was attempting to achieve when it removed negotiating authority from the mayor,” said Mark McQueen, the attorney who negotiated the contract on behalf of the City of Omaha.
Here are the major changes from the previous contract. There's an 18-month salary freeze that will be retroactively enforced, and there will be no pension spiking. Firefighters will pay a higher health insurance premium, and will pay more into the pension. The age when firefighters can receive full pension benefits will change for new hires; it will be 55 years old instead of 45. The total pension that can be received by new hires will decrease from 75% to 65%. The city says it will save a total of $822 million.
The discussion turned towards critics who said the contract would violate the city charter, and Omaha needs to take more time because the contract wouldn't, in fact, ease taxpayer burden. Both claims were disputed by the council.
"It would be fiscal insanity to delay this repair and this pension and health care and contractual reforms that have been achieved here,” said Councilman Chris Jerram.
The last contract was approved in 2004. Franklin Thompson approved it then, but called it a mistake and apologized. He's the lone council member who dissented Tuesday.
"The message that I want to send forward is that I'm expecting more from the union and that's my reason for voting no," said Councilman Thompson.
The contract goes into effect after the new year. When it does councilmembers say the Unfunded Pension Liability will immediately drop $30 million. The city will start negotiations with the fire union again in about a year, and they have to agree on a new police contract also.