Bethlehem Mayor John Callahan and the city’s police union on Friday announced a new collective bargaining agreement that freezes wages through the end of this year and cuts city costs for pension and medical benefits, particularly in the long term.
Star Lodge 20 of the Fraternal Order of Police ratified the contract on Thursday night with very little dissent, according to Wade Haubert, the union’s chief negotiator and past president.
Nearly 99 percent of the membership that voted favored the new contract, Haubert said. The union represents 140 city police officers, including everyone on the uniformed force who ranks lieutenant or below.
As city police had been working without a contract since the start of 2011, the new four-year deal provides for no retroactive raises and no raise for the current year. However, the contract does call for a 3-percent wage increase in 2013 and 4 percent more in 2014.
At the same time, there will be increases in health insurance premiums for officers, ranging from $15 a month for a single officer to $21 for an officer with a family, an increase of more than 50 percent.
There were other “significant concessions” for the union, Haubert said. However, the impact of those will be felt most by officers hired from this time forward.
For example, newly hired officers will no longer be eligible for city-sponsored, cost-free health insurance if they retire before they reach the age of Medicare eligibility. In 2011, the city paid $1.3 million for retiree health benefits, Callahan said.
Also, new hires with employed spouses who have health insurance will not be permitted to bring the spouse under the city’s health insurance.
Pensions are also being reduced significantly, but only for new hires, who will only be able to earn a maximum of 50 percent of their base salary after 20 years of service.
Currently, an officer who retires after 20 years can make 60 percent of his or her base salary. Two percent is added for each year beyond 20 up to 25 years, making 70 percent the current maximum.
Further, the pension formula currently figures in extra-duty pay, overtime and holiday pay. The new formula will not, Callahan said.
The mayor gave credit to the union for recognizing that the city’s pension obligations would not be sustainable under the current formula.
Bethlehem’s pension fund is currently 84-percent funded, which is less than the ideal 100 percent, but still better than all but three of Pennsylvania’s 15 largest cities, Callahan said.
CORRECTION: Wade Haubert's name and title were wrong in an earlier version of the story. New contract health insurance premiums have also been corrected.