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Sunday, May 26, 2013
Mayor talks about pension reform as budget solution
by Melissa Corker, published on June 28, 2011 at 6:08 PM
Storyline: Politics
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Mayor Kevin Johnson spoke about the need for representatives of the Sacramento Police Officers Association (SPOA) to meet with the city to explore ways to save police officers from impending layoffs at a Tuesday press conference.
“All of us on the council – the six that voted one way and the other three of us that didn’t – are reaching out to the SPOA asking for a meaningful dialogue,” Johnson said.
The City Council passed a budget on a 6-3 vote on June 21 that included more than $12 million in cuts to the Police Department and paved the way for more than 40 sworn police officers to be laid off July 1.
“We are at a difficult crossroad,” Johnson said. “(The City Council) said public safety is a priority ... and here we are now in a position where 108 (officers and civilians) are being laid off.”
Johnson said the city is not asking for SPOA to open up its contract, rather to “reboot and recommit to looking at opportunities that we have before us.”
The greatest of those opportunities, Johnson said, is for SPOA and the city to come to terms with a pension imbalance and make gradual changes to the current system that will lead to cost savings for the city in future years.
“We have to acknowledge that (SPOA) were the first ones to come to the table before,”Johnson said. “They gave us labor concessions, and they feel the city didn’t do its part, and I can respect that.”
Still, Johnson said the need for discussion about pension reform cannot be ignored, and the City Council has opened the door to discussion once again, if the union is interested.
“If (SPOA) are having honest discussions with their membership and no one is interested (in coming to the table), then we have to just cut officers and move forward and talk about pension reform next year or the year after,” Johnson said.
For most city employee positions, contributions to the employee retirement system come from both employers and employees.
Currently, however, city police officers do not have to pay a percentage of their earnings to their retirement benefits. Instead, the city picks up the full cost.
Johnson said that “pension reform is not the end-all,” however.
“If the police contributed 9 percent, that’s a $5.2 million savings (to the general fund). That doesn’t solve all of our problems.”
While noting that changes to pensions are necessary, Johnson emphasized that the city is not looking for the SPOA to “contribute it all back at one time.”
“If SPOA contributes their share, over time, we believe as a city we can still do our part and continue to be fiscally smart and move forward where everyone wins,” Johnson said.
Johnson said the City Council sent what it felt were “key points of discussion” to the SPOA, and he hopes the union is considering those points and talking to its membership about engaging in discussions about pension reform.
So far, Johnson said, he’s waiting for a response from the SPOA.
“I think it’s unrealistic to think that, in this economy, that there’s not going to be real discussion about pension reform,” Johnson said. “There HAS to be.”
Det. Mark Tyndale, SPOA representative, responded in a telephone interview Tuesday, saying that the SPOA is “constantly in conversation” with its membership, but the relationship with city leadership is strained right now.
Tyndale said the council members made their intentions toward the SPOA clear with the vote on the budget, and now there is a real sense of mistrust from the police union toward the council.
“We’re not unwilling to go (into a discussion),” Tyndale said. “We just don’t feel like we will be treated with good faith.”
It’s going to take more than a simple “please come talk” invitation from Johnson to bring the SPOA to the table, Tyndale said.
If the City Council as a whole – and Interim City Manager Bill Edgar – were to come together to discuss pensions with the SPOA, “I’d be in that room,” Tyndale said.
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Salaries and pensions are negotiated together and how they're broken down is a wash that people seem to make an undue fuss about. If you started from scratch and paid one person $48k and paid their entire pension contribution and paid another person $50k and paid their pension contribution less 4% coming from the employee, both the employees and the employer would come out even. If you take somebody who already has a contract in which these things are defined and make them pay 4% to their pension plan, where they have previously paid nothing, all you have essentially done is reduced their overall compensation by 4%. The employer isn't making some magic savings based on some complicated pension liability formula, they're saving based on the simple fact that the overall compensation package is reduced by 4%. You could keep the pension contribution the same (at 100%) and simply cut the salary by 4% and the end result would be the same. Pensions aren't some weird and wonderful thing, they're just part of a bundle of compensation that could be divided any number of ways.
But the simple fact, as reported in this article, is that the SPOA would rather that 40 of its youngest (and cheapest) officers be fired rather than support all officers contributing 4% to their own pensions.
SPOA may have to deal with some division within the rank and file with this one.
It's a pay cut, plain and simple. It's even worse than furloughs, which for most employees were also simply pay cuts because the workload wasn't reduced, because at least with furloughs the pay cut was/is reversible when the furlough action expires.
It's simply "if we pay you less, we'll have to fire fewer people." Well duh - If we paid them nothing we wouldn't have to fire anybody! And you can't expect a labor organization to be jumping at the chance to have their members paid less when they've been burned in negotiations before. But at least labeling it as a simple pay cut to save jobs is honest and accurate.
The rest of the argument is an attack on seniority. Even without unions, if seniority had no value and newer/cheaper employees always cost less to employ, then you'd never want to be given a raise for fear of being targeted for costing more than somebody else.
If taxpayers in other cities with lots of spare cash can afford a top-heavy, cradle to grave system I am okay with that. But that is not Sacramento's situation and the lesser of two evils is quantity over quality.
Cogmeyer is entering middle-age-itude...maybe you could point me towards some of your alleged private sector employers who will pay me according to my seniority and not my merit.