April 22, 2004

Mayor Gets Labor-Pact Savings That Eluded His Predecessors

By STEVEN GREENHOUSE

he three-year deal that Mayor Michael R. Bloomberg reached Tuesday night with the city's biggest municipal union, District Council 37, achieved a goal that has repeatedly eluded mayors over the last two decades: broad labor savings to help balance their budgets.

Mr. Bloomberg not only persuaded District Council 37 to agree to lower starting salaries and benefits for newly hired workers — important savings in themselves — but also got the union to pledge to work closely with the administration to find additional workplace savings in the future.

While Rudolph W. Giuliani and other mayors occasionally persuaded labor leaders to agree to savings, Mr. Bloomberg's predecessors did not make them a centerpiece of their administrations the way he has. Nor did those previous mayors achieve the wide-ranging labor savings that he obtained in the tentative contract with District Council 37, which has historically set the pattern for other city unions.

Independent analysts who examined the pact said yesterday that it broke significant new ground, particularly the provision for new workers to be paid 15 percent less in their first two years than current workers were.

"This settlement in fact has cash savings from the 15 percent pay cut, and those savings are real," said Charles Brecher, research director of the Citizens Budget Commission, a business-backed policy group. "A lot of the productivity stuff we heard about in previous contracts wasn't real."

As part of the deal, the 121,000-member union also agreed to fewer sick days, holidays and vacation days for new workers.

City Hall officials insisted that they would seek to make the labor savings in Tuesday's deal a model for the agreements they negotiate with the city's other unions, including the teachers, firefighters and police.

"This settlement for over 100,000 workers is an important one," said James F. Hanley, the city's labor commissioner. "It stands for the proposition that productivity is a basic element in this round of bargaining."

Mayor Giuliani took a more scattershot approach to labor savings and obtained some, like stretching out pension contributions. But, budget experts say, Mr. Bloomberg has taken a more focused approach, and has achieved an agreement with significant economic benefits down the road.

"What we've done is establish the principle, which I've said from the beginning was our basic belief — we don't have any money, we've got to find ways to, if you will, create money," Mr. Bloomberg said yesterday. "You do that by finding ways to do more with less."

After the District Council 37 deal was announced late Tuesday, two of the city's most powerful unions — the United Federation of Teachers and the Patrolmen's Benevolent Association — said they would not consider lower starting salaries for their members.

Officials from those unions noted that the city was already having a hard time recruiting enough teachers and police officers because pay levels are higher in the suburbs. Indeed, some labor leaders questioned the wisdom of District Council 37 officials agreeing to the lower starting salaries, saying it could eventually hurt the city's work force.

With regard to the police, Patrick Lynch, president of the patrolmen's union, said: "I think a lower starting salary is wrong. It won't serve to solve the problem that the New York City Police Department faces: the city can't hire enough candidates to fill police vacancies. We cannot fill a recruitment class."

Bloomberg administration officials said they would not necessarily ask other unions to agree to the same provisions accepted by District Council 37.

"You don't have to be wedded to lower starting salaries," said one senior city official, who spoke on condition of anonymity. "D.C. 37 doesn't have sabbaticals, but the teachers do."

Mr. Bloomberg said last week that he considered teacher sabbaticals as a luxury that should be scaled back to free money for raises and other spending.

The District Council 37 accord, which union members will vote on over the next month, calls for no raise in the first year, but a one-time $1,000 cash payment that year. There would be a 3 percent raise in the second year and 2 percent in the third. District Council officials say their members' average salary is just under $30,000 a year.

As part of the deal, the city pledged an extra 1 percent pay increase in the third year if a panel of city and union officials agrees on specific productivity savings to pay for it.

The size of those savings and the means of achieving them are still undefined, but Dennis Sullivan, the chief negotiator at District Council 37, said yesterday that his union had some ideas. He spoke of having parking-meter workers collect more money in less time, trying a possible incentive program to encourage city workers to take fewer sick days, and administering the city's workers-compensation program less expensively.

Carl Haynes, president of Teamsters Local 237, which represents 10,000 city workers, did not see the district council's contract as a model. "I don't like the 15 percent pay cut," he said. "At this point I can't say I'd accept the same thing. That contract serves as a framework for me to go on, but I want to negotiate about the nuances that affect my members."

Mr. Bloomberg originally said that all raises had to be offset by corresponding productivity increases, but on Tuesday he acknowledged that the first-year cash payment and second-year 3 percent raise would not be financed by labor savings. Still, he said proudly that every cent of the third-year raise would be financed by labor savings.

City officials acknowledged yesterday that they had quietly created a $200 million labor reserve in recent years to help finance the District Council 37 contract and other future accords.

But Ronnie Lowenstein, director of the Independent Budget Office, a nonpartisan city agency, questioned whether the labor savings Mr.Bloomberg gained would be enough to finance the district council’s raises in the third year.

“We’re still waiting for details,” she said.

Yesterday some rank-and-file city workers criticized the District Council 37 accord. Eramis Cruz, 52, an assistant at the city’s housing authority, said: “I don’t think it’s fair for the new workers to get 15% less. It should be equal work for equal pay.”

He said he feared that the district council’s contract would adversely affect negotiations involving his own union, Teamster Local 237.

“Right now we’re fighting just to keep what we have,” he said.