As city of Spokane administrators consider how to solve a forecasted budget deficit next year, they’ve signed off on employee contracts with raises that are expected to outpace new revenue.
On Monday, for instance, the City Council will consider a contract for its largest union, Local 270 of the Washington State Council of County and City Employees, that would increase wages 5 percent each year from 2008 through 2010.
Administrators say they’ve gotten important medical and retirement concessions that will help the city keep benefit costs from spiraling. In some recent years, the city’s bill for medical insurance has increased by substantially more than inflation.
Even with employees paying more for coverage, the city estimates the annual cost increase from the contract, including wages and benefits, will be slightly more than 5 percent. At the same time, the city’s chief financial officer says Spokane’s revenue rises, on average, by about 3.5 percent.
Budget Director Tim Dunivant said if medical insurance rates don’t continue to increase like recent trends, the actual cost of the contract to the city may not be as high.
Mayor Mary Verner said she believes the new contract is sustainable and unions have been good “partners.”
“They’ve understood that, ultimately, we need to address the benefits package of retirement, medical and dental (and) prescription co-pays,” Verner said.
The proposed contract for Local 270, which represents more than 1,000 city workers, would increase the percentage they pay to cover dependents on their medical insurance to 25 percent from 15 percent. The contract also changes workers’ retirement formula in ways that will require new employees to work longer to qualify for benefits.
While recent contracts approved by Spokane County commissioners call for smaller pay raises, they’ve included smaller concessions on medical benefits.
The Spokane County Deputy Sheriffs Association contract approved this year, for instance, increases the amount deputies pay to insure dependents to 9 percent from 7 percent over two years.
“We can’t sustain this forever,” said County Commissioner Mark Richard. “We have to take it carefully and we have to take it slowly.”
Although some local governments have been more open with union leaders in recent years about finances, union officials are used to administrators using exaggerated, gloomy scenarios whenever a contract is about to be negotiated, said Gordon Smith, staff representative for the Washington State Council of County and City Employees,
“There is a degree of mistrust in that regard,” Smith said. “Both parties have a strong interest in sustainability.”
Smith said government workers sometimes have better medical benefits than private-sector workers to make up for lower pay.
“People that choose public employment as their career are making a choice to go into a line of work where salaries are finite,” Smith said. “In the public sector, salaries are limited, (and) sometimes the trade-off is to have benefits that can make up for that.”