Police sergeants say no to contract, reject Emanuel’s pension plan
BY FRAN SPIELMAN City Hall Reporter/ firstname.lastname@example.org March 11, 2013 1:25PM
Mayor Rahm Emanuel. File photo. | Al Podgorski~Chicago Sun-Times.
Updated: April 13, 2013 6:25AM
Mayor Rahm Emanuel on Monday suffered a serious setback in his effort to find a collaborative solution to the city’s pension crisis when Chicago Police sergeants resoundingly rejected a new four-year contract tied to pension reform.
Emanuel had touted the sergeants’ deal as a “road map” for other unions to follow but the divide-and-conquer strategy fell flat with the rank-and-file.
By a nearly 7-1 ratio, sergeants rejected a deal that would have given them a 9 percent pay raise over four years in exchange for: raising the retirement age for sergeants to 53; increasing employee pension contributions from 9 to 12 percent by January, 2015; hiking health care contributions for new retirees to 2 percent of annuities; forfeiting cost-of-living adjustments every other year and limited COLA in intervening years to 2.5 percent with simple interest.
City Hall and the sergeants union also had agreed to seek state legislation that would have given the city seven years to “ramp up” funding for police pensions, instead of coughing up another $700 million to stabilize police and fire pension funds in 2016.
Fraternal Order of Police President Mike Shields applauded rank-and-file sergeants for seeing through what he called Emanuel’s political ploy.
In a Feb. 15 letter to sergeants, Shields had urged them to reject the contract on grounds that it unfairly allowed a union with just 1,178 members to “drastically lower the income” of 25,000 active members, retirees and widows served by the police pension fund.
“The sergeants realized that the pension portion of this deal was completely unconstitutional. This was not a deal that benefitted them. It only benefitted Mayor Emanuel,” Shields said Monday.
“The mayor needs to stop declaring war on the police and declare war on the bad guys. We’ve got a major crime problem, and him fighting Chicago Police officers certainly does not help when guys show up to work.”
Jim Ade took over the sergeants association after his predecessor pleaded guilty to stealing more than $1 million from the union to fund a lavish lifestyle that, prosecutors contended, included gambling trips, steak dinners and a down payment on a Northwest Side home.
“Our membership didn’t want the pension legislation tied to the collective bargaining agreement. Moving the retirement age up ... cutting COLA was a big deal. With a vote like that, there were a lot of things,” Ade said Monday.
“As policemen, we’re fairly resistant to change. Our membership spoke that they’re not comfortable with the change put forward. It was, maybe, just too much too soon for the pension legislation.”
Emanuel issued a statement saying he’s “disappointed” that rank-and-file sergeants shot down a “landmark” agreement that would have put an “unsustainable” pension system on solid footing for city employees, retirees and taxpayers.
“President Ade and I tried to be honest with taxpayers and employees by finding common ground and a fair compromise that put our city first,” the mayor said.
“This agreement was a break from the dishonesty of the past and provided a road map for a fair and honest pension system. Despite today’s vote, I intend to move forward with reforming our pension system in order to protect taxpayers and keep our city financially secure.”
A top mayoral aide, who asked to remain anonymous, blamed the sergeants’ vote on “outside forces”— including but not limited to Shields — who “scared and misinformed” rank-and-file sergeants.
“You have a union that steps out there courageously and they get eviscerated by some and silenced by others. The silence spoke volumes,” the Emanuel adviser said.
“We’ve been asked to sit down at the table to negotiate these issues and reach a deal. That’s what we did and this is the result. What incentive is there to sit down and negotiate more? It’s not an issue for collective bargaining.”
The mayoral confidante said Emanuel will now go it alone in asking the Illinois General Assembly to approve the seven-year phase-in plan to stabilize police and fire pension funds.
“We would have loved to have gone down there together. But, it doesn’t mean pension reform won’t happen. It has to happen and it will. There’s no choice. There is a ticking time bomb in Chicago that’s gonna go off and it’s gonna be devastating to our city. It’s not like this is an option,” the Emanuel aide said.
The mayoral confidante flatly rejected the notion that the sergeants’ vote was a political defeat for Emanuel.
“You’re asking workers to vote against their economic interests and, because they refused, that’s a blow to Rahm Emanuel? That doesn’t make sense on any level,” the source said.
“What it shows is the mayor will sit down with anyone and try to find common ground on behalf of the city. He has a responsibility to the people of Chicago, and he’s determined to help the city avoid this economic threat. We will always sit down with interested parties and see if common ground can be found. But at the end of the day, we have no choice but to get real pension reform one way or the other.”
Last year, Emanuel blindsided and infuriated union leaders whose collaboration he had promised to seek to solve the pension crisis.
Instead of negotiating first with union leaders in Chicago, he went to Springfield to lower the boom by requesting: a 10-year freeze in cost-of-living increases for retirees; a five-year increase in the retirement age; a five-percent increase in employee contributions and a two-tiered pension system for new and old employees.
Labor leaders accused the mayor of pitting hardworking employees against taxpayers — by portraying a 150 percent increase in property taxes as the only alternative to employee concessions.
In the end, Chicago’s pension crisis was put off until the state solves its larger pension problem. There’s been no progress on either front.
No matter how City Hall tries to spin it, Monday’s vote marks a “very significant setback” for the mayor, according to Civic Federation President Laurence Msall.
“It puts the whole thing back to square one for Mayor Emanuel. How does he balance the city’s budget going forward when he knows that Springfield has been slow in its own pension reform and he desperately needs relief — not just for police and fire, but for Chicago teachers, municipal employees and laborers?” Msall said.
“It raises real questions about how the city can meet those growing obligations without some dramatic changes in pension, retiree health care and other employment benefits. The city faces a very difficult financial future to maintain the level of benefits that exist right now. It would require an enormous tax increase.”