Chicago police sergeants on Monday overwhelmingly rejected a proposed contract that Mayor Rahm Emanuel had called a blueprint for restoring financial soundness to the city’s woefully underfunded pension systems.
The sergeants union voted 876-134 against the contract, a result that left Emanuel expressing disappointment and the leader of the Fraternal Order of Police crowing.
“The sergeants are certainly more rational than their union representatives,” said FOP President Michael Shields, who last month wrote a letter urging them to reject the proposed contract endorsed.
“It was clear that they realized this was not a good deal for themselves,” Shields added. “This was only a good deal for City Hall.”
After the vote, Emanuel issued a written statement saying he was “disappointed members of the sergeants’ union voted down this landmark agreement.” The mayor said he and Sgt. James Ade of Chicago Police Sergeants’ Association tried to find a “compromise that put our city first.”
For weeks, the mayor had been citing the proposed sergeants’ contract as a “blueprint” or “road map” for negotiations with other city unions. After Monday’s result was announced, Shields suggested Emanuel “needs to find the GPS for Chicago.”
A state law passed a few years ago requires the city to start paying much more toward police and fire pensions in 2016. Emanuel is faced with asking lawmakers for changes or turning to a combination of tax hikes and service cuts.
Without changes, the city is on the hook for about $600 million more in annual pension payments to the police and fire unions in 2016. Pension payments for Chicago teachers also are expected to balloon by hundreds of millions of dollars.
The rejected sergeants’ contract included raises of 9 percent over four years, and retiring sergeants would have been eligible to receive as much as 80 percent of their salaries, up from 75 percent.
But the contract proposal also called for sergeants to pay an additional 3 percentage points more toward their retirement and would have raised the retirement age by three years, to 53. They now pay 9 percent of their salaries toward pensions and do not receive Social Security.
Annual cost-of-living adjustments would have dropped from 3 percent to 2.5 percent and been frozen every other year. For the first time, union members would be required to pay some of their retirement health care costs, at 2 percent.
The city also would have been given more time to step up its pension fund payments and longer to reach 90 percent funding.
In a letter sent to sergeants on Feb. 15, three days after Emanuel had heralded the deal, Shields said that if the pension changes were made for all officers, it would result in an “indefensible” reduction in income for retirees under the age of 80.
“It will invoke the ire of thousands of retirees and make you union and its leaders a pariah amongst labor organizations,” Shields wrote. “Without a doubt, lawsuits will be filed and we will be reduced to fighting against each other rather than fighting for each other.”
An analysis attached to the letter showed that increased pension contributions and reductions in cost of living increases would far outstrip the increase in pay — by $112.3 million during the life of the proposed contract.
Emanuel, however, said the “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.”
Laurence Msall, president of the non-partisan Civic Federation budget watchdog group, also expressed disappointment at the defeat of what his group viewed as “a very reasonable and fair compromise. . . . There’s no way it could be viewed as good news for anyone that this went down.”