City, DC 37 reach tentative contract

The city last week reached a tentative agreement with its largest public employee union on a new contract.

And while it is being considered a good deal for members of District Council 37, some critics are questioning whether the city can afford the five-plus-year deal with a total 16.2 percent increase, particularly since it is expected to be used as the framework for other unions presently in negotiation with the administration, which incudes most of them.

DC 37 represents more than 90,000 workers, including school cafeteria workers, social workers, crossing guards, library workers, school safety agents and 911 operators.

The pact is retroactive to May 2021 and runs through Nov. 6, 2026. It includes annual raises of 3, 3, 3, 3 and 3.25 percent. There also is a $3,000-per-member ratification bonus, and other stipulations for things like a childcare fund.

Union members now must put it to a vote.

“I am a blue-collar mayor who has stood shoulder to shoulder with working people all my life — to fight for fairer wages, better benefits, and a better quality of life,” Mayor Adams said in a transcript of a Feb. 17 press conference sent by his office. “This is the first tentative agreement we have reached under this administration, and it is a great deal for workers and fair to city taxpayers.”

At the press conference, multiple reporters brought up that the administration has set aside only enough money in its labor reserve fund for total average raises of 1.25 percent.

For the DC 37 pact that means a five-year addition of $4.4 billion in committed spending, with reserve offsets leaving $2.9 billion for the city to come up with over the life of the contract.

Even before the tentative settlement and any other labor contract to follow, the city’s Independent Budget Office two weeks ago forecast deficits of $2.8 billion, $3.9 billion and $2.9 billion in fiscal years 2025 through 2027.

Neither Adams nor Budget Director Jacques Jiha were specific about where the additional money might be found, though Adams said it would not be achieved through union givebacks. His office later that day told the Chronicle that the mayor is not planning tax increases to make up the difference.

“We didn’t go into this contract negotiation of saying. ‘What can we take from you?’” Adams said. “That was not our atmosphere and that I was not our thought. Our thought was ‘How do we work together?’”

Henry Garrido, the executive director of DC 37, pointed to possible healthcare savings as an example.

“So we are still committed to saving hundreds of millions of dollars in healthcare not necessarily by charging the workers more, but by being smarter in the way we procure services, that we have a relationship with hospitals and providers, the way we provide prescription medication,” he said at the press conference. “Healthcare, as the mayor has said in his whole life, has been a challenge of my life as well, has been a big challenge and been a major topic of our discussions. How we approach it is not from the perspective of concessions, but a perspective of partnership.”

Jiha said the administration knew very well the amount money in the reserve fund before and during negotiations, though he continued to speak in generalities about closing the projected gap such as by looking for savings from city agencies.

“As you know, we included in the budget about 1.25 percent. So that additional expense that we have, we’ve been planning for this all along, through the measures we have taken in the past year in terms of all the savings measures we have taken just to deal in anticipation of this year,” he said at the press conference. “So we were well prepared for this settlement ... We’re preparing for that deal. We knew that deal was coming and we’ve been negotiating with the labor unions for the past year.”

Pressed further by reporters Jiha said, “Well, we are going to take some measures to basically find ways to fund the deal. OK?”

In response to a subsequent email from the Chronicle, the Mayor’s Office said the contract gap “can be funded by recognizing underspending at city agencies, finding efficiencies and identifying additional revenue. Our administration’s careful fiscal stewardship, including conservative revenue estimates positions us well for this agreement.”

In a press release of his own, Andrew Rein, president of the Citizens Budget Commission, wasn’t completely sold.

“The tentative New York City-District Council 37 contract announced today provides raises that are very reasonable given recent and anticipated inflation,” Rein said “The great challenge, however, still is how the City will pay for them.”

Rein said assuming the DC 37 agreement sets the pattern for all other unions, the raises would cost approximately $16.2 billion more than currently budgeted.

The CBC’s preliminary analysis estimates the additional spending would total approximately $2.5 billion in fiscal year 2023, $2.3 billion in fiscal year 2024, $3.2 billion in fiscal year 2025 and grow to $4.1 billion in fiscal year 2027, above the funds already in the budget to cover 1.25 percent annual raises.

“Consequently, City budget gaps would widen to approximately $2.5 billion this year, $2.3 billion in fiscal year 2024, $6.4 billion in fiscal year 2025, $9.1 billion in fiscal year 2026 and $10.6 billion in fiscal year 2027,” he said.