City of Allentown v. International Ass'n of Fire Fighters Local 302

122 A.3d 492, 2015 Pa. Commw. LEXIS 360, 2015 WL 4680890
CourtCommonwealth Court of Pennsylvania
DecidedAugust 7, 2015
Docket1802 C.D. 2014
StatusPublished
Cited by2 cases

This text of 122 A.3d 492 (City of Allentown v. International Ass'n of Fire Fighters Local 302) is published on Counsel Stack Legal Research, covering Commonwealth Court of Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
City of Allentown v. International Ass'n of Fire Fighters Local 302, 122 A.3d 492, 2015 Pa. Commw. LEXIS 360, 2015 WL 4680890 (Pa. Ct. App. 2015).

Opinions

OPINION BY President

Judge DAN PELLEGRINI.

The City of Allentown (City) petitions for review of an order of the Lehigh County Court of Common Pleas (trial court) reviewing an interest arbitration award issued by an arbitration panel under the Policeman and Fireman Collective Bargaining Act (Act 111).1 We affirm in part and reverse in part.

I.

The City and the International. Association of Fire Fighters Local 302 (Union) were parties to a collective bargaining agreement (CBA) governing the wages, hours and working conditions of the employees of the City’s Fire Department (Department) who provide firefighting and emergency medical services that was set to expire in December 2011. Pertinent to our discussion regarding manning, the CBA provided that the City Fire Department shall have 140 sworn personnel with an on-duty shift strength of no less than 28 firefighters. Regarding pensions, the CBA provided:

• that any firefighter was eligible to retire regardless of age;
• that any firefighter retiring after January 1, 2005, received an annual cost of living adjustment (COLA), but the pension benefit should not exceed one-half of the current salary being paid to firefighters of same rank that the pensioner had prior to retirement as provided for under Section 4322 of the Third Class City Code;2 and
[495]*495• that any firefighter could purchase up to 4 years of pension time after the firefighter had contributed to the Department’s Pension Fund for 16 years.3

When the parties could not reach an agreement on a new CBA, the City declared an impasse and sought binding interest arbitration under Act 1114 before an arbitration panel.5 At hearing, the City argued that the CBA pension provisions violated the Third Class City Code, and that the illegal minimum manning and sick leave provisions impact the overtime provisions which then, in turn, inflate pension benefits.

Vijay Kapoor, the Director of Public Financial Management’s Workforce Consulting, testified that “[T]his is all interrelated, You can see how minimum manning impacts overtime, how sick leave impacts overtime, how overtime impacts pension. All that put together puts a strain on [the City], which is, frankly, different than other third class cities.” (Reproduced Record (RR) at 468a). He explained that the City got into this dire financial situation due in part to the former CBAs which provided pension benefits levels and minimum age requirements that violated the Third Class City Code. (Id. at 476a-477a). He stated that the significant amounts of overtime generated during the period of calculating firefighters! final salaries and the ability to purchase four years of nonmilitary service also contributed.. (Id. at 477a). He testified that a number of third class cities are struggling with the minimum manning requirements and they have been eliminated or significantly scaled back in those other cities. (Id. at 487a). He stated that when the City of Bethlehem’s Fire Department took over EMS duties, there was very little impact on the amount of overtime, but .the transfer of EMS duties to the Department coincided with an increase in the minimum manning requirements under the CBA and that overtime increased as well. (Id. at 490a). He stated that both the Union and the police union had renegotiated pay freezes at the end of their CBAs. (Id. at 488a-489a).

[496]*496Fire Chief Robert Scheirer explained the assignment of overtime and testified that he did not believe that there were a lot of problems with the system until overtime became included in the calculation of the firefighters’ pensions under the prior CBAs. (RR at 480a). He stated that the firefighters realized that if they did not work a lot of overtime in the first couple of years of the CBA, they could start accepting overtime and work in large quantities at the end of the CBA to spike their pensions because it was now part of the pension calculation. (Id.).

Ed Pawlowski, the City’s Mayor, testified regarding the City’s dire financial situation. He explained that they have used casino revenues, comprising 4% of the City’s general funds, to help absorb the increasing costs in salaries, fuel and pension costs, but that “it doesn’t even come close to addressing some of these equities that we talked about today with the rising pension costs because of early retirement, and the increases because of some of the other factors, like overtime and so forth that have played into these numbers.” (RR at 494a). He stated that “the biggest thing that is affecting us and will affect this City for years to come is the pension challenge,” and that the unfunded liability from the City’s fire and police pensions will increase to 25% of the City’s general fund by 2015 under the current provisions. (Id. at 495a). He stated that the City’s budget has spiked tremendously due to the early retirement of police and firefighters with a cumulative impact of 34.5 million dollars. • (Id. at 496a).

Ultimately, the panel eschewed holding another hearing and issued an award in July 2012 that was to be in effect from January 1, 2012, through December 31, 2015. The panel noted the City’s dire financial situation and its relationship with the CBA pension provisions stating:

The voluminous record in this case leaves the City’s claim that it is faced with significant financial difficulties now and, at least, over the next few years substantially unchallenged. The City has also established on this record that the firefighters’ pension plan suffers from a significant underfunding shortfall. There is no reason to believe that this situation will be substantially improved in the near term without the implementation of some structural changes.
Certainly, the fact that a number of the City’s employees, including those who have the right to bargain collectively regarding wages, have agreed to freeze wages for a period of time supports the City’s position. This fact, standing alone, corroborates the City’s claim that current financial circumstances mandate recognition by the Panel of the City’s need for relief.
Additionally, the evidence in the record supports the City’s claim that its funding obligations under the firefight- . ers’ pension plan have become critically onerous. In fact, it was most unfortunate that a significant number of long term, experienced, professional and dedicated firefighters believed that they had to take early retirement in order to protect the pension benefits they earned under the terms of the existing pension plan. These facts present, in the Panel’s opinion, a need to provide the City with relief insofar as the structure in the firefighters’ pension plan is concerned.

(RR at 33a).

As a result, the award eliminated the provision that the City had to have a set number of firefighters and reduced the minimum manning scheduling requirement [497]*497to 25 per shift.6 Regarding pensions, the arbitration panel eliminated, effective January 1, 2012, the ability of firefighters to purchase four years of pension time, as well as eliminating the provision that firefighters could retire at any age;7 and eliminated the COLA benefits for retired firefighters.

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Cite This Page — Counsel Stack

Bluebook (online)
122 A.3d 492, 2015 Pa. Commw. LEXIS 360, 2015 WL 4680890, Counsel Stack Legal Research, https://law.counselstack.com/opinion/city-of-allentown-v-international-assn-of-fire-fighters-local-302-pacommwct-2015.