Jeannette fears bankruptcy over police contract ruling
Jeannette faces a potential “budget crusher” this year if an arbitrator rules in favor of police in stalled contract talks, the city's attorney said.
The city and its police officers have failed to hammer out a contract and are headed to arbitration in mid-March, according to solicitor Scott Avolio.
Council faces tough decisions when it reopens the 2013 budget next week, Avolio said. Any arbitration award above what the city offered could force officials to seek protection under Act 47 for financially distressed cities. Another option is municipal bankruptcy.
Council offered police a four-year deal with a wage freeze in the first year, a 1 percent increase in the second, 2 percent in the third and 3 percent in the fourth.
Avolio said the two sides hit a roadblock when council wanted retired policemen to pay 10 percent of their health care costs.
“I think we made them a very reasonable offer,” Avolio said. “Considering the revenues of the city, realistically, the city has to find a way to reduce the cost of the police force. The cost of a police force has not continued to shrink like the revenue and population have. Anything over that is going to be crushing to us.”
Mayor Robert Carter, who oversees the police department, and Councilman Bill Bedont, who heads the finance committee, did not respond to requests for comment. Officer Richard O'Neal Sr., president of the Jeannette police union, could not be reached.
Jeannette's force includes a police chief, a dozen full-time officers and three part-time officers.
“That's too large and too expensive for the size of the city,” Avolio said.
Jeannette has 9,634 residents, according to the 2010 census. The population has dropped 23 percent since 1990, and the census projects a further 2.7 decrease by 2014.
At least one officer earned more than $92,000 last year, according to city records. Six earned more than $80,000, and two others earned between $70,000 and $75,000.
The per capita income in Jeannette is $19,199, according to census data. Its median income is $30,575, far lower than the state's $49,250.
Jeannette Council has been reluctant to lay off police officers and undertake any other recommendations offered by a state consultant to help the city financially.
Police Chief Brad Shepler said council has discussed furloughs with him, although he said layoffs would be “extremely bad.” Part-timers must be laid off before any full-time officers, he said.
“We've had conversations about that,” Shepler said.
Because police are prohibited by law from striking, binding arbitration is used to settle contract disputes in an impasse.
• Plum Borough in Allegheny County, with a population nearly three times that of Jeannette, went to arbitration three years ago. A ruling last year awarded Plum patrolmen more than $73,600. Sergeants earn more than $79,000 and lieutenants are paid at least $83,000.
• A patrolman in neighboring Monroeville, population 28,445, will earn an average salary of at least $105,000 this year.
• A police officer in Greensburg, population 14,865, earns an average annual salary of $85,000.
Adding to Jeannette's financial burden is the required annual pension contribution to the officers' fund, known as the Minimum Municipal Obligation. Jeannette still owes $350,000 for last year's contribution and must pay $546,000 by Dec. 31.
The city's police pension fund has $9.8 million in liability but only $5.7 million in assets, according to the Pennsylvania Employees Retirement Commission.
Executive Director James McAneny said the penalty for not paying the MMO “can be substantial.” Jeannette is being penalized 7 percent interest, compounded monthly, for each month the pension fund isn't paid.
“If you don't pay, you just keep going deeper in the hole,” he said.
Richard Gazarik is a staff writer for Trib Total Media. He can be reached at 724-830-6292 or at email@example.com.