New police contract will wipe out city's $200M labor reserve fund: Report

Philadelphia may be in for some service cuts as it struggles to pay for new municipal labor contracts, according to a city official.

Finance Director Rob Dubow's comments came as the state board overseeing the city's finances met Tuesday to approve a change to the city's five-year plan to pay for a new police contract.

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Kimberly Paynter/ WHYY

That agreement handed down by an arbitration panel gave officers a three-year contract with raises averaging 3.5 percent a year.

The Pennsylvania Intergovernmental Cooperation Authority staff said in a report the cost of that deal will more than wipe out a $200 million labor reserve fund the city had set aside.

And if contracts yet to come for two more city unions provide raises comparable to the police officers, those costs will eliminate all the financial cushion built into the city's plan for four of the next five years.

Dubow said he'll start talking to city department heads now about finding savings, and that could mean service cuts.

What a PICA board member has to say about the city's fiscal plan, at Newsworks.org.

Source: Philadelphia Business Journal