The City of Bloomington sought to reduce its sick leave buyback program for new firefighter hires from 100% to 50% buyback. Under the buyback program firefighters with accrued sick leave at the time of retirement have the accumulated sick leave, up to 1800 hours, cashed out 100% by the City and the proceeds placed in a retirement health savings account to pay the firefighter’s health insurance costs during retirement. The City proposal only affected employees hired after June 17, 2013. To offset the reduction in buyback for new hires, the City also offered a onetime payment of $1,000 to all firefighters employed as of June 17, 2013. The Union sought to maintain the status quo.
The dispute went to arbitration. The arbitrator ruled in favor of the City’s position. The Arbitrator stated “this case …mainly turns upon how much weight, if any, must be given to the City’s projection that it faces a $37,600,000 shortfall in its firefighters’ pension liabilities.” The arbitrator determined he could consider the pension shortfall and that modifying the buyback provision was a reasonable approach, given the “extraordinary circumstances” of the pension shortfall.
The Union appealed the Arbitrator’s decision. The trial court affirmed the decision as did the Fourth District Court of Appeals. The Union argued that the award was arbitrary and capricious because the Arbitrator improperly considered the City’s pension obligations. The Court of Appeals said the issue before the Arbitrator was the sick leave buyback program, not the level of pension funding. Under the Illinois Public Relations Act an Arbitrator may consider “the interests and welfare of the public and the financial ability of the unit of government to meet those costs.” Under the Act the Arbitrator could consider the City’s pension obligations and its financial ability to meet those obligations as part of the City’s broader financial landscape.
It is often difficult to negotiate wage and benefit concessions. Proper framing of the issues is important to success. Additionally it helps to put reasonable offers on the table and not overreach. Bloomington was able to negotiate a change in benefits given “extraordinary circumstances” affecting the financial ability of the city. Municipalities asking for concessions in bargaining should consult with legal counsel to plan a course of action justified by legal precedent and statutory authority.
