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A recent post on Politics Early & Often, part of the Sun-Times network, highlights how Chicago managed to settle its back pay obligations for firefighters without resorting to borrowing. The deal, spanning five years, grants firefighters and paramedics over $20 million in overdue compensation without increasing the city's existing debt burden. In exchange, the union has foregone concessions in favor of exploring potential pension reforms.
This year, Mayor Rahm Emanuel successfully pushed the City Council to double its "commercial paper" borrowing program from $500 million to $1 billion. Chief Financial Officer Lois Scott explained that this short-term loan mechanism would ensure the city remains liquid for unexpected expenses like retroactive salary payments. However, City Hall emphasized that the funds necessary to cover the firefighters' back pay were already allocated within the mayor's 2014 budget, specifically in general "finance" accounts, avoiding any reliance on borrowed money.
Under the new agreement, firefighters and paramedics will receive an 11% pay increase over five years while maintaining current staffing levels. Additionally, the city plans to upgrade all 15 of its basic-life-support (BLS) ambulances to advanced-life-support (ALS) units. This move is expected to free up around 30 firefighter positions, as each BLS ambulance requires two firefighter-EMTs. The city has also committed to hiring between 50 and 200 additional paramedics.
"This is kind of a roundabout way to adjust staffing requirements," explained a source familiar with the negotiations. "With fewer personnel needed per vehicle, there will be more firefighters available in the stations. It’s a win-win situation."
Moreover, the contract establishes a six-member committee—three appointed by the mayor and three selected by the Chicago Firefighters Union Local 2—to evaluate the necessity of deploying five more ambulances by 2016. Alderman Nick Sposato, a former firefighter, noted that the BLS program had proven ineffective, with over 4,000 cases last year requiring an upgrade to ALS services. "Sending an ALS unit when in doubt is better than risking someone’s life with a BLS response," he stated.
Mayor Emanuel’s administration expressed optimism about expanding the fleet to 80 ambulances, aligning with the union’s goals. Despite these advancements, the agreement includes minimal concessions from the union. For instance, firefighters and paramedics retiring between the ages of 55 and 59 will now contribute 2% towards their retiree healthcare costs, a change already implemented for police sergeants and lieutenants. However, Emanuel failed to secure significant cuts to other union benefits, such as holiday pay, clothing allowances, premium rates, or double-house staffing models.
The mayor described this agreement as "vanilla" but hoped it would foster collaboration to address the city's looming pension crisis. Next year, Chicago must contribute $600 million to stabilize its underfunded police and fire pension funds, which currently cover only 30.5% and 25% of their liabilities, respectively. Emanuel seeks legislative approval to delay this mandatory payment until 2023, giving him breathing room to negotiate pension reforms with public safety unions.
A senior mayoral advisor acknowledged the risks of pushing harder during negotiations: "If we had pursued staffing adjustments or targeted additional benefits, it might have triggered interest arbitration. Arbitrators often balance concessions, meaning we’d lose ground elsewhere."
In summary, while the agreement represents a compromise rather than a breakthrough, it marks a cautious step forward for both sides, aiming to ease immediate financial pressures while laying groundwork for future discussions on pensions.
Thanks, Dan!
June 07, 2025