DENVER, CO &#8211 Denver firefighters were first in the chute for contract negotiations, agreeing to $6 million in cuts over the next three years and setting the tone for the other two public safety unions that will begin negotiations soon.

Denver Firefighter Local 858 agreed to no raise next year, and 1 percent raises in 2014 and 2015 — saving the city $1.1 million in both 2014 and 2015. The union also agreed to changes in health insurance coverage and vacation policies.

But no layoffs are being factored into the settlement that still must be approved by the City Council.

“Denver’s firefighters have boldly led the charge, continuing to make sacrifices necessary to balancing the city’s budget while maintaining our high-quality services to Denver’s residents,” said Mayor Michael Hancock in a statement.

The city is facing a $94 million budget shortfall for next year, including a persistent structural gap of $30 million that the city is trying to address through systemic changes.

Seventy percent of the city’s expenses are personnel costs. About 3,100 of the city’s 7,200 employees are covered by collective-bargaining agreements. Negotiations for the police and sheriff’s contracts are next.

“City Council is very proud of the Hancock Administration and Local 858?s collaboration, getting us to a record level of cost savings to the City and County of Denver in these difficult budgetary times while still meeting the needs of our firefighters,” said Council President Chris Nevitt.

“Local 858 is truly dedicated to our community, understanding that in these tough economic times difficult decisions are critical to put our city on a sustainable path,” said Local 858 President Mike Rodgers in a statement.

Here is a breakdown of the agreement:

SUMMARY OF NEGOTIATED CHANGES

Article VII (Call Back Compensation)

• Starting in 2013, fire fighters can be paid in 15-minute increments when the fire fighter is not required to respond to a station, work location or incident. (Example: An issue is resolved over the phone in 25 minutes – the fire fighter is paid for 30 minutes of overtime, instead of 3 hours at overtime rate.)
• This contract change will result in reduced overtime expenses for the department (potentially $50,000/year).

Article IX (Uniform Allowance)

• Fire fighters will forego the $550 per employee per year uniform cleaning and maintenance allowance in 2013 and 2014. The allowance will be reinstated in 2015.
• This will result in a $512,000/year savings to the City in both 2013 and 2014.

Article X (Insurance, Health and Safety)

• The City will provide a high deductible health insurance plan with a health savings account. While it is difficult to estimate the exact savings created through this offering since we do not know how many fire fighters will enroll in it, we anticipate significant savings to the City through the plan’s lower premiums.
• Both parties agreed to a four-tiered plan structure like the CSA program, allowing fire fighters to enroll in an employee only plan, employee plus spouse, employee plus child(ren), or family plan. This new structure along with other deductible and copay changes will result in an estimated $500,000 savings to the City each year of the contract.
• Fire fighters will absorb all brokerage fees and commissions should they continue to utilize an independent broker. (This was a recommended change by the Structural Financial Task Force). Saves the City $90,000/year.

Article XII (Salaries)

• The parties have negotiated the following salary increases:
• 0% increase in 2013
• 1% increase in 2014
• 1% increase in 2015
• Each 1% increase in salary is approximately a $1.1 million cost to the City.

Article XIV (Vacations)

• The agreement allows for a voluntary vacation sell back program to be established by the Fire Chief, which would allow fire fighters to sell back accrued but unused vacation leave at the fire fighter regular rate of pay.
• By doing so, the City will save the half-time expense it would have otherwise incurred backfilling the position. The City could save as much as $700,000/year under this program.
• The parties have also agreed to changes in the vacation selection method that could result in a savings of approximately $70,000 annually.

Article XVII (Work Day and Work Week)

• Under the current contract, fire fighters assigned dispatcher duties work 40 hours a week. Starting in 2013, dispatchers will work a 48-hour work week. Not only will this result in dispatchers working more hours each year, but fewer fire fighters will be needed to staff dispatch operations in the future.
• This contract change will:
• Reduce the cost of staffing Dispatch by $310,00/year
• Reduce OT in Dispatch by $50,000/year;
• Reduce OT in Suppression by $175,000 in 2013 (until the new Lowry station comes on line); and
• Reduce holiday/sick leave payouts in Dispatch by $40,000/year

Article XX (Retiree Health)

• The City’s annual payment to the retiree health trust fund was phased out, resulting in a permanent savings of $170,000/year.
• Fire fighters have agreed to forego one-half of the City’s annual contribution to the Post Employment Health Plan in the first two years of the contract, resulting in savings of $487,000 in both 2013 and 2014.

Total Cost Reductions 2013-2015: $8.1 million ($6 million in permanent savings)
Salary Increases in 2014 and 2015: $2.2 million
Net Savings 2013-2015: $5.9 million

From The Denver Post.