City reaches tentative contract accords with public safety

City reaches tentative contract accords with public safety

Michele Ellson

The city has inked a tentative deal with its public safety unions to establish a trust fund to help cover its unfunded retiree health liability.

Union members are to vote next week on amended contracts that include a new trust fund for retiree health benefits for Alameda's current police and fire employees.

The City Council will consider the new contracts at an April 29 budget hearing.

City Manager John Russo announced the tentative contract deal at Tuesday night's council meeting. Additional details are due out next week.

The tentative deal would amend and extend police and fire contracts to 2021. Existing contracts are in effect through 2017.

Russo said the trust will "provide years of breathing room and save the city tens of millions of dollars." He said the trust won’t permanently fix the city’s pension and retiree health woes, but will buy the city time to deal with another problem: rising pension rates.

Jeff DelBono, president of the Alameda Firefighters Association, told the council he supports the proposed trust fund. The vast majority of the city’s unfunded pension and retiree health care liabilities are for public safety workers.

"We understand that this isn't going to be totally funded. But we are partners. We are going to sit at the table and look at this fund, and try to make it succeed," DelBono said.

Russo said the city has limited control over its pension costs, which are largely governed by the state Legislature. It has much more control over retiree health benefits.

The new trust fund would help cover $38 million in unfunded retiree health costs for existing city workers, which the city doesn't now have the money to fund. Both the city and its workers would pay into the fund.

City leaders will still need to figure out how to cover $54 million more in unfunded medical costs for city workers who are already retired. The city set up a separate trust fund for retiree medical costs in 2014, and has deposited $2 million so far.

The city and its employee unions have taken several steps to reduce the city's pension and medical liabilities, which combined are estimated at $193 million for the next 30 years. Alameda's public safety unions agreed to drop some of the costlier medical plans and also, spouses of retirees hired after June 2011.

The city pays $1,858 a month toward medical benefits for each of its police and firefighters hired before a new contract was signed in June 2011 and $712 for each public safety worker hired after that date. It contributes $122 a month for health benefits for non-safety workers.

Last year the would have needed to make an $8.5 million payment to fully fund its retiree health care obligations; it actually contributed close to $2.7 million, the amount needed to cover that year’s bills - $208,000 for non-safety workers and $2.5 million for safety workers.

Alameda's public safety unions have also agreed to pay more toward their benefits; they pay a higher percentage of their salaries toward their pensions than most other Alameda County agencies. Some of the changes were negotiated in the wake of the state's 2013 pension reform law, which also raised retirement ages and reduced benefits for new public workers.

DelBono said he earns $41 an hour as a fire captain; $8 of that goes toward pension and medical benefits.

Some have criticized city leaders, saying they have not moved aggressively enough to contain pension and retiree health costs, which continue to rise in spite of the cost-cutting moves. They think the city should move unilaterally to cut the costs.

But council members said they would rather take a series of small steps toward addressing the liabilities than do nothing.

“It is the responsible thing to do,” Councilwoman Marilyn Ezzy Ashcraft said. “I don’t think that we want to delay this any further.”

Council members apparently voted in closed session to move forward with the tentative contract deals on a 3-1-1 vote, with Ashcraft, Vice Mayor Frank Matarrese and Councilman Jim Oddie voting in favor, Mayor Trish Herrera Spencer opposed and Councilman Tony Daysog abstaining.

Daysog said he wanted more concrete numbers before moving forward and that the trust fund “is moving us in the right direction” but doesn’t address health care costs for city employees who are already retired.

All five council members had apparently voted in an earlier closed session to move forward with the proposed trust fund.

Some on and off the dais seemed frustrated with Spencer’s opposition Tuesday to moving forward with the contracts. Both DelBono and Oddie appeared to accuse Spencer of being unwilling to partner with public safety to address pension and retiree health costs.

“Showing leadership is not sitting in a coffee shop and bashing public safety (and their) benefits,” Oddie said. “Showing leadership means coming up with a solution.”

Comments

Submitted by neil (not verified) on Wed, Apr 8, 2015

I'm not surprised the mayor voted no. Did she have a better proposal or an explanation?

Submitted by Michele Ellson on Wed, Apr 8, 2015

Hi Neil: It sounded like the issue was that the mayor wanted the contracts to be heard during a regular council meeting and not a budget session and also that she wanted the public to have more than two weeks to check out the contracts (they'll be released next Tuesday and heard at a 4/29 council meeting).

Submitted by Kurt Peterson (not verified) on Wed, Apr 8, 2015

The article fails to mention that three of the five City Council members (one of them being the mayor) stated concerns that the contract would be covered at a 'special meeting' rather than at a regular City Council meeting. All three (Ashcroft, Daysog and Spencer) listed trouble with the possible sign of lack of openness this might display to the public. Jim Oddie, who received considerable election backing by the Firefighters union (good idea as to where his partnership lies) saw no problem with the 'special meeting' issue. Why is the City Manager attempting to rush this new contract through? This pension funding concern has been an issue for years. Seems that the extra three year time extension of the contract appears to be in the best interest of our public safety employees. The whole issue needs to be investigated in great detail by our elected officials before they make a hasty decision. This decision will be the most important financial position the city has made in decades.

Submitted by Tough Love (not verified) on Thu, Apr 9, 2015

Quoting ..."Alameda's public safety unions agreed to drop some of the costlier medical plans and also, spouses of retirees hired after June 2011."

Oh yippee for the Taxpayers .... we can look forward to the beginning of an end to this outrageous financial "mugging" starting in about 25-30 years, when the spouses of retired officers (hired within the past 3 years) are no longer covered.

What's the "present value" of that "savings" today ? About $5 bucks ?
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It's a VERY rare Private Sector taxpayer indeed that is accruing ANY (yes ANY) employer-sponsored retiree heathcare subsidy today.

And that's what' taxpayers should pay towards their workers retire healthcare subsidy, NOTHING ..... and for all CURRENT workers & retirees.