Firefighter contract will prove costly: town

Duane Hicks

Council agreed to a new collective agreement with the Fort Frances Professional Fire Fighters Association at Monday night’s council meeting, which includes a 16 percent wage increase over a four-year period, more benefits, and recognition pay.
But in a press release issued immediately after the meeting, the Town of Fort Frances made it clear it feels the new deal reflects employee costs continuing “to escalate out of the control of the corporation and without regard to the ability to pay.”
“A Board of Arbitration, appointed pursuant to the Fire Protection and Prevention Act, chaired by Kevin Burkett, has imposed an arbitration award between the Town of Fort Frances and the Fort Frances Professional Fire Fighters Association that proves to be very costly for the corporation and for the taxpayers of the Town of Fort Frances,” said the town in a press release.
“Chairman Burkett and the panel’s decision was based solely upon provincial comparators and did not take into consideration any local economic circumstances whatsoever.
“Proposals put forward by the corporation to gain operational efficiencies were opposed by the association during bargaining and were completely disregarded in the award,” it continued.
Apparently, Fort Frances is not alone. Peter Hume, president of the Association of Municipalities of Ontario (AMO), commented on CBC Radio about the City of Thunder Bay’s recent arbitrated settlement by saying, “Arbitrators and arbitration boards really haven’t paid as much attention, if any, into the economic circumstances of municipalities.
“Arbitrators and arbitration boards need to apply local economic tests [change in taxation, losing of assessment, layoffs, or loss of employment] to determine a municipality’s ability to pay.
“Arbitrators need to consider if the municipality will have to raise taxes and if homeowners can afford that,” Hume added.
“This is not a process that is favorable or recognizes tough circumstance in Thunder Bay or any of the other municipalities across the north,” he charged.
The town noted the decision imposed unilateral monetary increases such as a full benefit plan for retirees until the age of 65 (firefighters already enjoy an enhanced retirement option at the age of 50), service pay, and substantial wage increases.
“Recognition pay, which was originally termed as retention pay, was historically a bonus system to keep Toronto area police officers from moving to adjoining forces,” said the town.
“This trend spread throughout the police sector and eventually made its way into the fire sector,” it noted.
“This has now become a standard across the province which, from our perspective, has no relevance for our community and arguably the north in general,” the town continued.
“The average years of service in the Fort Frances department is 17, and the recruitment and retention of quality members has never been an issue.”
Recognition pay, which is a percentage of a firefighter’s wages, has the effect of compounding as years of service increase and wages increase.
It is a type of bonus-based system, integrated into wages based on the following calculation:
•after eight years of service, recognition pay equals three percent of annual wages;
•after 17 years of service, recognition pay equals six percent of annual wages; and
•after 23 years of service, recognition pay equals nine percent of annual wages.
Recognition pay also increases other wage-based employee benefit costs such as the OMERS pension plan.
“Wages were also a costly impact of the award,” the town said. “Our department was at the low end of the provincial average for wages.
“As a result, the previous collective agreement saw freely-negotiated wage increases that were higher than any of our other employee groups.
“This was an attempt to keep in line with provincial trends, but also recognized the fact that Fort Frances and communities in southern Ontario are vastly different.”
The last round of increases were four percent in 2006, five percent in 2007, and six percent in 2008.
“This round of bargaining was more difficult,” the town noted. “As quoted from the award, ‘The Union demands for substantial salary catch-up and recognition pay and, in addition, significant benefit improvements and staffing enhancements, were seen by the employer as creating an insurmountable economic barrier to resolution.
“Hence this dispute is before adjudication.’”
The arbitration awarded wage increases this time include a three percent hike in 2009, four percent in 2010, four percent in 2011, and five percent in 2012.
The town pointed out that in 2006, the base salary for a captain was $63,108. At the end of 2012, the base salary for a captain who has 23 or more years of service will be $89,554.
This is a 42 percent wage increase over a seven-year period.
This base wage includes the recognition/bonus pay, but does not include statutory holiday pay (close to $5,000 per year) or overtime.
Inclusive of all factors, in 2012, captain wages now will start at $95,000 and easily could exceed $100,000 per year.
Four of the eight firefighters are captains, noted the town.
“The cumulative cost effect of this award through 2012 is $171,000, which equates to a two percent tax increase, and will only grow as years of service increase and wages are increased,” concluded the town.
“These cost factors will make it extremely difficult to maintain the same level of service, as these employee costs continue to escalate out of the control of the corporation and without regard to the ability to pay,” it said.