Union ruling could cost city $690,000

An adverse arbitration decision could cost Kalispell $690,000 to pay firefighters over three years, City Manager Jane Howington told the City Council on Monday night.

The binding arbitration ruling favored Kalispell’s 30 firefighters and prompted city officials to look for budget reductions or a way to reopen negotiations.

Although council ratified the firefighters’ contract Monday, Howington reiterated her previous statement that the city has only two realistic options to deal with the financial impact: layoffs and privatizing the ambulance service.

“We are the only Class 1 city in Montana” that provides ambulance service in-house, she said. Class 1 cities are the seven largest in the state.

The 2011 fiscal year budget for Kalispell includes $777,087 for ambulance services and $2.13 million for the fire department.

Mayor Tammi Fisher said she talked to the International Association of Fire Fighters Local 547 about reopening negotiations.

“I don’t know how we can stay within the budget and not lay off firefighters,” she said.

Council member Duane Larson said he’d like to renegotiate with the firefighters.

Howington said afterward that the city would schedule a meeting with the firefighters union soon.

Firefighters union president Kirk Pederson said firefighters are open to meeting with city officials, but not until they receive “their numbers.”

In a press release, union vice president Doug Schwartz said: “It is irrational to assume that a reasonable and impartial arbitrator would choose a proposal that would cause such a drastic alteration to public safety.”

Howington told the council: “I hate to just paint a doom-and-gloom picture, but there are tough decisions.”

She noted the city improved its reserve funds to 6 to 7 percent of the budget compared to 2 percent when she took over 20 months ago. But that’s not good enough. It should be at 15 percent, she said.

“Eight to 10 months of the year, Kalispell runs ... in the red,” Howington said, noting the city is in the black only twice a year when taxes are paid.

Another financial factor is that the state Legislature is considering reducing funding to cities by 3 to 4 percent by cutting the business-equipment tax. This represents a hit of $130,000 to $150,000 to Kalispell, Howington said.

The city might also have to pay more than anticipated for the recently completed 911 Center, and little or no growth is projected in the city for three to five years.

Additionally, the city is looking at a 15 percent increase in health insurance that it pays for employees. Howington previously said the city pays the full premium of $505 per month for a single employee’s health insurance, $721 for a parent with children and $1,100 for family coverage.

On Tuesday, Howington said the city could pursue an interlocal agreement for ambulance service with another public entity such as Evergreen or Whitefish. Or it could contract with a private vendor.

Ambulance service providers in Missoula and Great Falls previously expressed an interest, she said.

The overall savings the city could see if it privatizes the ambulance service have not been analyzed yet, Howington said. According to the current fiscal year budget, expenditures are about $25,000 above revenues, not counting $107,196 in cash reserves.

The new contract includes increases in base pay for firefighters on the lower end of the pay scale and longevity increases of 23 cents per hour per year of experience. The union also won a 2.4 percent increase in wages for the 2013 fiscal year.

“The city’s expert witness testified during arbitration that Kalispell should experience a projected growth rate of 2.4 percent annually for the next several years,” Schwartz said in an email.

Kalispell firefighters’ pay still is below the average of other comparable cities in Montana, the arbitrator said. Kalispell is the seventh largest city in the state and as such was included with Billings, Missoula, Great Falls, Bozeman, Butte and Helena.

Reporter Caleb Soptelean may be reached at 758-4483 or by email at csoptelean@dailyinterlake.com.