This report was updated on 3/8/2016

PROVIDENCE, R.I. (WPRI) – Providence Mayor Jorge Elorza’s decision to overhaul the city’s fire department has become the dominant initiative of his first term in office, creating a bitter dispute between the new mayor and the powerful firefighters’ union.

So how did we get to this point?

Here’s an overview.Providence is still having money problems.

Remember when former Mayor Angel Taveras inherited a $110-million structural deficit in 2011? Providence is still recovering from that. The city finished with slight surpluses in both the 2013 and 2014 fiscal years, but Mayor Elorza’s office reported that Providence ended the 2015 fiscal year with a $5 million shortfall. That’s on top of the $8.67-million cumulative shortfall from deficits incurred during the 2011 and 2012 fiscal years, an amount that needs to be paid down by 2017.  And that’s just from the past. In May, Elorza released an independent review of the city’s finances that showed Providence’s structural deficit is projected to grow steadily over the next five years, with the gap reaching $19.1 million by 2021.Firefighter overtime is an easy target.

When city officials scrutinize the annual budget each year, the amount spent on so-called “callback” pay for firefighters is always a sticking point. The city typically lowballs the amount it expects to spend on callback as part of its effort to produce a balanced budget, which inevitably leads to massive overages. (See the chart below.) For example, the budget for the 2014-15 fiscal year set aside just $4 million for callback; the actual amount spent was nearly $8 million. On average, the city spent about $8.2 million a year on callback between 2010 and 2015. The explanation for why the city spends so much on callback depends on who you ask. From the city’s perspective, the union contract calls for 94 firefighters to be on duty at all times, a provision known as minimum manning. Under the city’s old system, there were roughly 400 firefighters split into four platoons, which meant that only six members of a platoon had to call out sick or be on vacation before members of other platoons had to be called back and paid time-and-a-half. From the union’s perspective, the city could significantly reduce overtime by hiring more firefighters.

Mayor Elorza caught the union off guard.

When the mayor introduced his $696-million budget on April 29, he actually proposed hiring 52 new firefighters. In subsequent meetings with firefighters and union leadership, he never mentioned that he was planning to move from four platoons to three. Elorza maintains he didn’t make his decision to move forward with the changes until May, but he had already entered into a $230-per-hour contract with an outside lawyer to help craft his legal strategy the month before. Ultimately Elorza informed the firefighters he would move to three platoons on May 20, the night before he held a press conference to outline the changes. Elorza maintains the changes will save $5 million a year in callback pay once all is said and done.

Providence’s firefighter schedule is unheard of.

The move from four platoons to three has forced firefighters to go from working an average of 42 hours per week to an average of 56 hours a week. The new schedule requires them to work two 10-hour days followed by two 14-hour nights followed by two days off, a schedule that no other fire department in the country is apparently required to work. Mayor Elorza has offered to change the schedule to something more common – including 24 hours on and 48 hours off – but no agreement has been reached. Since the changes were implemented Aug. 2, firefighters have complained that they’ve been forced to work significantly more than 56 hours each week to reach minimum manning. All told, the city spent more than $2 million on callback pay during the first two months of the fiscal year. (The current budget projects that the city will spend about $5 million on callback for the entire fiscal year, which doesn’t end until next June.) Elorza maintains that he expected callback to remain expensive in July and August, but it will gradually be reduced in the coming months. The two sides have also traded barbs over the massive spike in firefighters injured on duty, with the city arguing that the increase is not related to fatigue and the union saying the additional hours have led to more absences.

The changes came with a pay increase, but not necessarily a raise.

Between May and August, lawyers for the city and the firefighters’ union met seven times to try and negotiate a deal that would result in a pay increase for the 14-hour increase to the work week. Elorza’s initial offer was 5%, but he later offered a 10% increase that would count toward worker pensions or a 33% increase for all hours actually worked that wouldn’t have counted toward pensions. All of those offers were turned down. Instead, he gave the firefighters an 8% increase for a 33% increase to their work week. For the average firefighter, that works out to around $6 an hour for hours 42 to 56. (After 56 hours, the city still pays time-and-a-half.)

The city and the union are in court over money.

Neither side disputes that Mayor Elorza has the management right to move from four platoons to three, as the state Supreme Court ruled in North Kingstown earlier this year. But the two sides are in court because the union’s contract calls for firefighters to be paid time-and-a-half for working more than 42 hours in a given week. (That agreement isn’t slated to expire until June 30, 2017.) The problem on the administration side is that continuing to pay overtime for hours 42 to 56 would result in no savings for the city. The problem on the firefighter side is that earning far less overtime means losing out on a lot of money. Earlier this year, The Providence Journal reported that 31 firefighters earned at least $40,000 in overtime alone during the 2013-14 fiscal year.

The union won the first battle in court.

On Sept. 10, Superior Court Judge Jeffrey Lanphear ruled that the city and the union can go to grievance arbitration over their dispute. In his decision, Lanphear said the city failed “to focus on the key difference” between the Supreme Court decision about North Kingstown and the situation in Providence: the existence of a contract. Lanphear said “there is no reason, nor any logic, to deviate from the express provisions of the contract now.” Elorza initially said he was “excited” about the judge’s decision, but lawyers for the city then asked Lanphear to dismiss the complaint altogether. The judge called the request “an insult to the court.” The city has appealed the arbitration decision to the state Supreme Court. Separately, the firefighters have filed another lawsuit accusing the city of violating the federal Family Medical Leave Act (FMLA).

State legislation played a major role in the timing of the city’s changes.

What prompted Mayor Elorza to announce that Providence would move to a three-platoon system even though a contract was already in place? Money was obviously one factor, but just as important was a bill that was quietly making its way through the General Assembly. The bill would have added platoon structures or shift schedules to the list of matters that can be collectively bargained, which would have made it made it significantly more difficult for municipalities to restructure their fire departments. A group of mayors and town managers urged lawmakers to kill the legislation. As a response, another bill was introduced, this time designed to require cities and towns to pay firefighters time-and-a-half for working more than 42 hours in a week unless otherwise agreed to in a contract. Once again, municipal leaders rallied against the bill. In the end, the General Assembly took no action on either piece of legislation.

The City Council is in a tough spot.

Because platoon changes are a management right, the City Council has been relegated to the sidelines throughout much of the dispute. Ultimately, a council vote is required to change the terms of the union’s contract, but with negotiations at a standstill, it doesn’t appear the council will be sent a contract in the near future. Still, some councilors have expressed frustration with the administration. Finance Committee Chairman John Igliozzi said Elorza “had an obligation” to tell the council’s 15 members that he hired an outside lawyer to prepare for the platoon changes. Igliozzi also successfully convinced the administration and the Providence Teachers Union to alter language in their new contract so that educators aren’t eligible for a pay increase equal to whatever the firefighters ultimately receive. The entire council met behind closed doors on Sept. 8 to receive a briefing from the administration on the status of the firefighters’ lawsuit. Afterward, Councilman Sam Zurier said he wants the council to hire a lawyer to give a “second opinion” on the entire dispute. The council also passed a resolution urging Mayor Elorza to launch a new fire academy after learning that 44% of department employees are eligible to retire.

The battle has become deeply personal.

Even before Public Safety Commissioner Steve Pare launched an investigation into social media threats made against Mayor Elorza, the dispute had already become heated. More than 250 firefighters and their supporters rallied at City Hall on Sept. 8 to oppose the platoon changes. Before that, families of firefighters said the forced 56-hour work week was taking a toll on them. On the city side, the administration has regularly pointed out that one firefighter earned more than $100,000 in overtime during the 2013-14 fiscal year to make the case that savings are needed. The union also picketed a happy hour meetup hosted by the mayor, which led 34 of 36 elected officials in the city to skip the event. On Dec. 5, the city chose to not staff two engines and two ladder trucks because only 83 firefighters were on duty (the union contract calls for 94 on duty at all times). Pare claimed the shortage was the resulted of an illegal “coordinated” work action, but Council President Aponte said he didn’t see any evidence of wrongdoing. In March, the city fired a fire captain for insubordination.

Continue the discussion on FacebookDan McGowan ( ) covers politics, education and the city of Providence for Follow him on Facebook and Twitter: @danmcgowan