Are rising salaries and benefits for police and firefighters wrecking Lancaster City's budget?

Or is insufficient income to blame?

City residents are facing a 25 percent property tax hike and the loss of 43 city workers, primarily because of revenue reductions, according to Mayor Rick Gray.

But when expenditures have doubled since 1998 — from $23 million to $46 million — that side of the ledger shares responsibility, a Lancaster Newspapers investigation shows.

Soaring salaries and benefits for public safety personnel, along with other escalating government costs, have forced spending to increase at a rate far higher than inflation.

While inflation has risen 32 percent since 1998, the city budget has increased 100 percent.

"I told one union, 'You're pricing yourself out of a job,' " Gray says. "I said, 'I don't blame you. You're just becoming too expensive for us to have you.' "

To reduce spending, Gray is cutting 23 police and 12 fire positions in the 2010 budget.

Police and fire unions are currently negotiating with the Gray administration in an effort to save some of those jobs.

But no one in City Hall or the unions is talking about changing the bottom line of the $46 million general fund budget, balanced in large part by the largest city tax increase since 1980.

Under the proposed budget, the owner of a $100,000 property would see taxes increase $240 — from $964 to $1,204 — and those costs would ripple out to renters.

The average city resident also would pay $73 more for water and sewer service and trash collection.

Lancaster is hardly alone in facing tough budget decisions this month.

East Lampeter Township is weighing a 25 percent tax hike and police layoffs. The Lancaster County Commissioners plan to cut farmland preservation funds in half. Reading has sold its parks and remains a distressed city, millions of dollars in debt.

But Lancaster's situation is different from many stressed municipalities in one crucial respect: It has a highly unionized work force.

Everyone in the Bureau of Police, except for the chief and three captains, belongs to the Lancaster City Police Officers Association. That means, of the 158 uniformed officers, 154 belong to the union.

Everyone in the Bureau of Fire, except for the chief and deputy chief, belongs to the Lancaster Professional Firefighters Association. Of the 85 uniformed officers, 83 belong to the union.

And the American Federation of State, County and Municipal Employees represents 110 workers — all but 44 nonunion positions — in the rest of the city work force.

The police and fire unions have the largest impact on the budget because employees of the two bureaus consume nearly 80 percent of salary budget in the general fund.

Without touching police salaries ($12 million) and fire salaries ($5 million), it's hard to make a significant dent in city's proposed expenditures of $45,866,205 next year.

Even with cuts in public safety personnel, the city plans to draw another $1.3 million from once hefty reserves that already have been cut in half — from more than $16 million to about $8 million — since 2005.

Salaries
At a time when inflation is running below zero, city police will receive a 2 percent pay hike in January and another 2 percent in July.

Those increases extend a trend.

Between 2000 and 2010, the lowest-paid patrol officers listed in the budget have seen their annual pay increase from $28,505 to $42,273 — 48 percent.

An entry-level officer now earns $40,661, rising to $58,088 after four years.

That entry-level salary is in line with other police departments.

Average entrance salaries for police nationwide were $41,620 in 2008, according to a survey by the International City-County Management Association.

This year's entry-level salary in neighboring Manheim Township, which has 55 uniformed officers, is $41,720.

Command officers in the Lancaster Bureau of Police have received boosts similar to patrol officers. The lowest-paid lieutenants received $56,260 in 2000 and will get $81,011 next year — a 44 percent hike.

Eleven officers have moved into higher salary brackets in recent years, and that has added to salary expenses.

The police force added three sergeants in 2007 to bring the level up to 25. Eight patrol officers were elevated to detectives last year to recognize more complex duties and to bring their number to 20.

Their salaries rose with them.

As a result, total salaries for lieutenants, sergeants and detectives rose 20 percent from 2007 to 2009, while total salaries for patrol officers fell by 7 percent.

Even though the bureau is downsizing, it cannot reduce the number of ranking officers because of a city ordinance mandating that the bureau employ 10 lieutenants, 26 sergeants and 20 detectives.

At a time of budgetary distress and public safety cutbacks, that ordinance needs to go, says Gray, who plans to ask council to lift the restriction next month.

The city has limited control over rising police salaries, medical benefits and pensions, Gray notes, but it should be able to adjust the makeup of the department.

Police Chief Keith Sadler agrees.

"I've never heard of an ordinance anywhere that requires staff numbers," Sadler says. "It doesn't give me much leeway to make assignments."

Command officers could be reduced more directly if many of the officers who now retire from the force come from the command ranks.

"We're trying to entice people in management positions to get out," Gray says.

"My goal is to not touch any of those officers on the street," Sadler says. "I'd rather manage the bureau with officers on extra work than lose that extra enthusiasm and tenacity on the street."

The city is offering buyouts based on several years' salary, while the union is bargaining to save jobs.

Negotiations will continue past a meeting Tuesday night at which City Council will consider adopting the budget, according to Christopher Erb, president of the Lancaster Police Association and a bureau detective.

"We have a chance to preserve 13 of those 23 job eliminations through early retirements and other negotiations," Erb says.

The other 10 positions are being eliminated permanently because Manheim Township is taking over the city's role of providing police service to Lancaster Township.

Eighteen members of the union are eligible for early retirement packages. If more than 13 officers leave, Erb notes, new patrolmen could be hired at lower salaries.

Moreover, he notes, the union is considering deferring benefits that could save the city $250,000 to $300,000, and that could help preserve jobs.

But whether any positions can be saved depends on a number of factors, according to city business administrator Patrick Hopkins.

"If concessions are made that equal long-term savings," he says, "then we'll take a look at that."

Firefighters
City firefighters face a similar situation.

They also have received hefty pay increases over the past decade and will get a 3.25 percent increase next year.

The lowest-paid firefighters now working make considerably more than the lowest-paid patrol officers. Command fire officials make less than their counterparts in the Bureau of Police.

From 2000 to 2010, the lowest-paid firefighters have seen their annual pay rise from $37,263 to $50,992 — 37 percent. The firefighters who will earn $50,000 next year have been working for over two years.

The entry-level salary for firefighters is $39,296 — a figure that is in line with the average entrance-level pay for fire personnel nationwide in 2008 — $38,889.

Command officers also have received large boosts in pay. The lowest-paid fire captain received $48,032 in 2000 and will get $72,415 next year — a 51 percent increase.

The number of fire command officers has remained the same since the mid-1990s, when a downsized bureau cut the number of lieutenants from 20 to 16.

Now that the bureau is being reduced by another 12 firefighters, including three vacant positions, to a total of 76, should the number of command officers — 31 — be lowered again?

"I couldn't just come in and say I don't want that level of supervision and just eliminate it," Fire Chief Tim Gregg said. "That would have to be negotiated with the union."

It's difficult to separate command officers from others in the Bureau of Fire, Gregg says, because every firefighter, including the chief, is responsible for on-the-ground firefighting.

Losing 12 firefighters at any level will mean "looking at some new strategies to keep things safe," Gregg says. That will include working more closely with neighboring municipalities.

The Firefighters Association hopes early retirements and attrition among command officers will prevent any younger firefighters from leaving the force, according to Marty Harsh, union vice president and a fire marshal.

Twenty-nine firefighters are eligible for retirement, Harsh notes, and he hopes "to get some of our older firefighters out. This is a young man's job."

The union is not offering any benefit concessions, Harsh says, because the city did not request them.

Negotiations with the city have been going well, he notes. He expects to take the city's final proposal to the union membership Monday night.

Medical insurance
Salaries, of course, are only part of the expense of the city work force. Insurance premiums will increase 9 percent next year to nearly $9 million for all employees.

Insurance for active and retired police totals nearly half that amount. Insurance for active and retired firefighters will cost nearly 30 percent.

Until this year, Lancaster police paid nothing toward medical premiums. An arbitration board ruled they must provide $260 annually for an officer and $520 annually for a family. That's just 2.8 percent of the city's $20,000 premium for family coverage in 2010.

Firefighters had been contributing $7.50 biweekly toward their medical premiums for about a decade before this year. Now they're paying $280 and $561 a year — just 2.6 percent of the city's premium.

This compares with an average of 23 percent to 32 percent paid toward medical premiums by workers in the private sector in Lancaster County, according to a policy and benefit survey taken in 2008 by the Lancaster Chamber of Commerce and Industry.

Since 2000, the city's medical insurance premium has nearly quadrupled.

Pensions
The final large employee-related cost is pensions. In 2010, the city will pay out over $1.6 million in pensions to retired police and more than $1 million to retired firefighters. The state will cover nearly half of that tab.

Since 2007, pension contributions for police have increased 56.8 percent, and for firefighters, 102.5 percent.

Members of both unions contribute about 5 percent of each month's salary to the pension fund. The city and state pay the rest.

But, as Hopkins explains, city workers don't pay into or receive Social Security, and there is no cost-of-living increase in the pension plan.

On the other hand, those who retire at a relatively young age can bank their pensions and begin a second career.

Other departments
Salary and benefits also have increased in other city departments, of course, but as they make up a much smaller part of the budget, it's more difficult to find significant cuts to make there.

But former Mayor Charlie Smithgall believes the salaries of executives and more than eight jobs in departments other than the police and fire bureaus should be cut in order to save police and firefighters.

"They're cutting police and fire, which are public safety," he says, "and not administration, which is top-heavy with fat."

Gray asked Hopkins to compare executive salaries in Smithgall's last budget (2006) with salaries of the same officials in the 2010 budget. Salaries rose from $596,000 to $628,000 — a 5.3 percent increase over the four years, according to Hopkins.

Reducing those salaries would not resolve the budget crunch, Gray says.

However, reducing the number of police and firefighters, he says, saves real money.

"If you don't have nine firefighters, if you don't have 13 police officers," he explains, "you don't have $20,000 for your medical expenses, you don't have the payroll, you don't have the pension contribution next year and the year after that."

Smithgall counters that reducing spending in other departments would not only save police and fire jobs but allow a reduction in the proposed tax hike.

"We're going to force all senior citizens and marginal people out of the city with this tax increase," he says. "We're spending too much this year and last, so we need to cut expenses."

E-mail: jbrubaker@lnpnews.com