By KEVIN McCALLUM
THE PRESS DEMOCRAT
Santa Rosa firefighters have negotiated a deal calling for them to begin paying for a portion of their pension costs in exchange for raises and a one-year contract extension.
The members of Santa Rosa Firefighters IAFF Local 1401 approved the contract changes following voting Thursday, according to Jack Thomas, president of the 123-member union. He did not release a breakdown of the results.
The vote sends the issue to the City Council on Tuesday, where it is likely to get vastly different receptions from council members.
Councilman Scott Bartley on Friday joined colleague John Sawyer in expressing measured support for the changes.
“I don’t think it’s a great deal, but I don’t think it’s a bad deal,” Bartley said, characterizing it as an important step toward needed pension changes.
Meanwhile, Councilwoman Susan Gorin on Friday echoed some of the concerns expressed by Councilman Gary Wysocky.
Gorin opposes extending the contract because she feels it would make it harder for the council to enact serious pension overhaul.
“This action ties the hands of the council in the future,” Gorin said. “It’s kicking the can down the road yet again.”
Firefighters are in the final year of a six-year contract. In response to the city’s financial challenges, they twice have deferred raises due under that contract, one for 3.5 percent, another for 2.5 percent.
They could have refused to defer those raises further, and taken a 6 percent raise for the current fiscal year, which began July 1. That would have cost the city an additional $1.2 million.
Instead, they struck a tentative deal with city officials that saves the city $944,000 this year and $1.2 million next. It calls for firefighters to get the 3.5 percent raise this year, with 3 percent of it dedicated to reducing the city’s share of their pension costs, which have been soaring in recent years. The following year, they would get 2.5 percent raises, with 2 percent going for the same purpose.
The result would be a 1 percent increase in their take-home pay, and 5 percent going to reduce the city’s contributions to the California Public Employees Retirement System.
The city would continue to pay, as it has for years, the firefighters’ portion of pension contributions, known as Employer-Paid Member Contributions. The cost of EPMC, as it is known, equals 9 percent of salary, plus an additional related costs equal to nearly 3 percent of salary.
This means that firefighters do not make any contributions to their pensions from their current pay.
But they argue that they gave up raises equal to 9 percent long ago to get the city to pick up their share of pension costs.
Eliminating EPMC is one of many state-wide pension reform options being debated in Sacramento to limit taxpayers’ exposure to rising pension costs.
To protect firefighters in the event that occurs, the contract extension contains language that calls for them to get additional raises to cover those costs. Thus, the city has agreed in the tentative contract extension that if it is banned from paying the firefighters’ share of pension costs, it will give firefighters a 4.5-percent raise to help them cover those costs. It also agrees that 4.5 percent of the 5 percent firefighters will be contributing to the city’s share of pension costs will be redirected to cover the remainder of the employees’ 9 percent share.
The result: firefighters have ensured they won’t have to pay to cover those costs.
Gorin said the clause about EPMC show that firefighters are looking at statewide trends and trying to figure out how best to navigate a changing pension landscape.
“That’s sophisticated. That’s smart,” Gorin said.
But it’s another reason, in her mind, why the deal is a bad one for the city. One of the reasons the city has been pushing so hard for one-year contracts is because of uncertainty how state-wide pension overhaul will affect the city even one year from now, let alone two.
It also throws the city’s strategy of aligning all the contracts so they can be renegotiated at the same time into “chaos.”
But Bartley sees more upside than down to the deal. While the extension gives him “some heartburn,” the short- and long-term cost savings are too good to pass up, he said.
One key benefit is the agreement to open discussions about establishing a second tier of lower pensions for new workers.
That could prove a significant savings given that 10 to 15 employees are expected to retire in the coming year, he said.
The alternative is to reject the offer, give firefighters 6 percent raises, and then hope next year the city can get a better deal.
“I’m just not comfortable taking a big fat gamble when you’re looking at those kinds of savings,” Bartley said.