More than two years after their previous contract expired, North Riverside firefighters agreed in August to a new five-year deal with the village. The deal is retroactive to May 1, 2009 and will expire April 30, 2014.
Firefighters were able to preserve pay raises in the face of an economy that has forced non-union employees to accept wage freezes and fewer staffers to do the work. But the contract also fundamentally changes long-standing health insurance benefits and eliminates for firefighters hired after May 1, 2011, cherished village-subsidized, post-retirement health insurance.
Eventually, the village would like to phase out that same perk for other union and non-union village employees. In time, the change could save the village more than $1 million per year.
“The village is working in the direction of trying to get some concessions across all of the bargaining groups, and later village-wide,” said Sue Scarpiniti, the village’s finance director. “While there won’t be an immediate savings, it was the long-term plan for the village.”
According to Scarpiniti, North Riverside has 114 employees (both union and non-union) drawing healthcare benefits from the village. Of that number, 51 are retirees, almost all of whom are on the village’s family medical plan and will remain on the plan for the rest of their lives if they so choose.
Each retiree pays either $1,000 per year or 1.5 percent of his pension, whichever is greater, as their co-pay for their health insurance premiums. All but one retiree pays the $1,000. The rest of the premium – $9,900 for single coverage and $21,600 for family coverage – is paid for by the village of North Riverside.
In all, North Riverside contributes more than $1 million annually for retirees’ health insurance premiums, and it represents almost half of what the village pays toward health insurance premiums annually.
“The full accrued, actuarial liability is over $17 million. That’s a lot of cost,” said Scarpiniti. “This was a very important concession the village was able to receive from the union.”
There are still 63 employees eligible for post-retirement healthcare benefits, including 15 firefighters, said Scarpiniti. As such, it still could take decades before North Riverside realizes the full impact of eliminating the post-retirement insurance perk. North Riverside is currently negotiating a new contract with its police officers and police dispatchers.
Scarpiniti said that the post-retirement insurance perk will be eliminated for new non-union employees when the village begins hiring again. The village has frozen non-union hiring in recent years.
In place of the insurance perk, the firefighters’ contract creates Retirement Health Savings Accounts for employees. Both the village and the employee will contribute 1.5 percent of the employee’s pay to the account, which can used to purchase health insurance from the village or another provider in retirement. For a new firefighter, said Scarpiniti, the village’s contribution to such an account in the first year of his employment would be $650.
Firefighters also gave in on the village’s demand for them to start contributing a percentage of their health insurance premiums, versus the flat rate they had been paying.
Under the terms of the old contract, firefighters paid $1,000 per year toward their single or family health insurance premiums, with the village paying the rest. Under the new contract, effective May 1, 2010, firefighters paid 7.5 percent of their premiums. On May 1, 2011 the percentage rose to 8.5 percent and will rise again to 10 percent effective May 1, 2012, where it will remain until the end of the contract.
However, if the village is unable to negotiate a similar percentage-based plan with police officers, firefighters have the right to reopen negotiations on their health insurance contributions, according to the contract.
In exchange for the concessions on insurance, however, firefighters were able to maintain annual salary increases.
Base pay will increase by 12.5 percent over the five-year term of the contract. But step raises – raises given for each year of seniority – built into the contract result in much more generous pay hikes, particularly for firefighters just beginning their careers.
A firefighter starting his career on May 1, 2011, for example, is scheduled to make $43,142 in annual salary. By the end of the contract, in 2014, because of step raises, that same firefighter will make $64,397 – an increase of almost 50 percent in just three years.
Step raises flatten out somewhat after five years. For example, firefighters stay at the same step from years five through nine, moving to the next lane in year 10. And the increases for each lane change are far smaller than in the first five years on the force. All but one of North Riverside’s firefighters have been with the force for 10 years or more.
Firefighters also get paid in a lump sum for nine holidays, receive between seven and 13 24-hour vacation days per year and two 24-hour personal days per year, and accrue 12 hours of sick leave per month.
Every five years, the village must buy back all accumulated sick leave above 60 days by paying firefighters one hour of pay for every two hours of accumulated sick leave.