City Council Votes Tonight, October 22, On Agreements With Unions
By Samantha Mehlinger - Staff Writer
October 22, 2013 – The Long Beach City Council votes tonight (October 22) on agreements with the four remaining bargaining units of city employees, including the associations of engineering employees, managers, confidential employees and lifeguards. With the approval of agreements, the City of Long Beach will have achieved full pension reform, meaning that all city employees must pick up their full share of pension costs into the California Public Employment Retirement System (CalPERS).
According to Tom Modica, deputy city manager, CalPERS allows cities the option to pay its employees’ pension costs, which, for most non-public safety employees is 8 percent of their income, in addition to its own (employer) share of around 14 or 15 percent. Starting in the 1980s, Modica said, the City of Long Beach began picking up portions of employee pension costs.
City employees from these four bargaining units are currently paying 2 percent of the 8 percent employee share. Under the new agreements, the city will give 11 percent raises in fiscal year 2014 and 4 percent pay raises in fiscal year 2015. However, employees will also begin paying the full 8 percent to PERS this year, retroactive to October 1 or soon thereafter, according to a staff report.
The contracts with engineering, management, lifeguards and confidential employees have terms of two years, Modica said. If council approves the agreements, the city will save more than $130 million in the General Fund and more than $250 million in All Funds from fiscal years 2014 to 2024 total from all pension reform, according to a city press release. Of the city achieving full pension reform, Modica said, “We think it is very significant.”
While other city employees, such as those represented by the police and fire associations and the International Association of Machinists, had received pay increases in the past five years, the remaining four bargaining units had not, with one exception. To offset the jump to their increased contribution into CalPERS, and to put them at better parity with other bargaining units, the agreements allow for pay increases.
“So what we did with pension reform was, we said, ‘We got you the increases we promised you, but we would like to negotiate that you give a portion of that back to the city to pay for the pension costs that we are currently paying for you,’” Modica explained of the relation of salary increases to CalPERS reform. “I think these four unions are in agreement with this because it is the same terms as we have offered [to other bargaining units] and it puts everyone on the same playing field,” he said.
In a statement to the Business Journal, the Long Beach Association of Engineering Employees wrote: “The City of Long Beach has many large engineering projects currently underway: the Gerald Desmond Bridge, gas and water distribution system enhancements, airport runway improvements, the widening of the 710 freeway, just to name a few . . . The recent agreement between the Engineering Association and the City of Long Beach is a step in the right direction to adjust the City’s engineering wages to help recruit and retain the required engineering professionals for these challenging projects.”
Aaron Fletcher, a Long Beach Lifeguard Association boardmember and marine safety officer, told the Business Journal that the association hopes the city council approves the agreements. “As far as this contract goes, it is a step in the right direction. Since 2007, we’ve basically been working without a raise,” he said. He added that while the increase in pay is being “framed like a huge raise for these employee groups,” factors including increased contribution to CalPERS and inflation mean the raise isn’t that large. He noted, “When we look at inflation, we’re making 16 or 17 percent less than we were from the 2007 amount.”
Business Journal Publisher George Economides said that having city employees pick up the “employee fee” is a long time in coming. “We urged the city council act back in the late 1990s,” he said. “Why should taxpayers pay the employee fee when they are already paying the very high employer fee? It made no sense that they weren’t paying into their own retirement. It was a give-away to city workers, costing taxpayers roughly $20 million annually during most of those years. Our argument has always been, pay employees a fair salary, but have them pick up all of their eight or nine percent of the pension cost.”