RACINE — The City of Racine could very well be facing another lawsuit after the City Council voted 11-2 Tuesday to rescind prospective 2013-2014 union contracts affecting 524 of the city’s 670 employees.

The council’s Committee of Whole voted 9-1 on Thursday to recommend that the City Council toss the contracts, which were slated to begin in January.

According to City Administrator Tom Friedel, the city is facing a $2 million deficit in the 2013 budget from the wage and benefit provisions in those prospective contracts, driven in large part by increasing health care costs.

“Based on the decision of the City Council today I find it likely that there will be litigation to follow very quickly,” AFSCME Local 67 staff representative David Dorn, who works for one of the unions affected, said following the vote. “Obviously the members need to protect their interests. They have a contract that they feel was reached fairly, and we will move to protect that.”

Audience members began pouring into the chambers even as the 6 p.m. Committee of Whole meeting was still in session at City Hall, 730 Washington Ave. By the time the 7 p.m. City Council meeting was called to order, nearly 100 people filled the chamber, many of them wearing AFSCME shirts and holding signs decrying “shame, shame, shame.”

Scott Dresen, a 38-year-old Department of Public Works Equipment Operator, started the public comments period by urging the council to keep the promise they made last year when they and workers agreed to the contracts.

“One thing we all have in common is the City of Racine. We are all members of the City of Racine. No one party created this whole,” Dresen said. “As city leaders you have to keep your promise. Keep the contract in place. Drop the ‘my way or the highway’ attitude, so we can work together as one City of Racine.”

Other speakers echoed Dresen’s sentiments, urging the council to keep its promise to city workers.

But not all audience members were in favor of the city keeping the contracts in place.

Racine resident Ken Brown criticized the council for voting in the first place to approve the contracts that he said were not reasonable or affordable, and failing to take advantage of benefits of the collective bargaining restrictions in Act 10.

Aldermen spent the better part of an hour discussing the proposal. They even discussed a motion made by Alderman Keith Fair to send the item back to the Committee of the Whole, but it was ultimately voted down after several council members said they did not want see any further postponement.

“The budget process starts in October,” Alderman Jim Kaplan said. “If we just stall this off we are just stalling off the inevitable.”

Fair and Michael Shields voted against the council’s final decision.

The city has been forced into making the decision to rescind the contracts as a result of health care costs and the dual effects of Wisconsin Acts 10 and 32, Friedel said Tuesday. Both of the acts prevent the city from renegotiating many of the provisions of the 2013-2014 contracts, including retirement plan and health care contributions. In addition to installing bargaining limitations, Wisconsin Act 32 only allows the city to raise property taxes by an amount equal to the percentage increase in equalized value from net new construction. In essence, it prevents the city from raising property taxes by any other amount for any other reason, unless voters approve a referendum allowing the city to do so.

Both of the acts became law on June 30, months after the contracts in question were approved by the City Council.


The city's proposal

Last year, before Act 10 collective bargaining changes took effect, the city approved prospective 2013-2014 union contracts with 524 of its 670 employees. The contracts, which cover more than three-quarters of the city’s employees, are set to start in January.

But faced with a deficit next year, the city’s Committee of the Whole voted 9-1 Thursday night to recommend the City Council rescind its previous adoption of the contracts.

Aldermen have asked to toss the contracts because the city is facing a $2 million deficit in the 2013 budget from the wage and benefit provisions in those prospective contracts, driven in large part by increasing health care costs, according to City Administrator Tom Friedel.

If they succeed, officials could require all general municipal employees pay 50 percent of the contributions made by the city to the state retirement system, according to Friedel. Half of those employees already contribute to the system, he said. The city could also require employees contribute more toward their health care through increased premiums or deductible.

Seven groups of employees would be affected by the change: parks and public works, city hall clerks, police department clerks, police officers, police staff officers, firefighters and fire staff officers.

If the city cannot make these changes, it would need to cut nearly 30 employees to resolve the deficit without changing the agreements, Friedel said. The staff cuts would follow those for 2012, in which aldermen axed 31.5 employees and $3.7 million from the 2012 budget.

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Cara Spoto covers the school beat for The Journal Times.

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