Tax Committee recommendations partially implemented, but benefit costs continue to rise-
After numerous closed sessions, the City Council has reached consensus on a new employment contract for Piedmont Police Officers, recommended by Finance Director Mark Bichsel. The Council will vote on the contract at its meeting on Monday, August 6.
As with other recently negotiated employee contracts, the new contract, which expires June 30, 2013, will create a new “two-tier” pension plan and initiate a small employee contribution toward the employee medical retiree benefits. However, as with previous recent contracts, it does not fully implement the recommendations of the 2011 Municipal Tax Review Committee (MTRC). The cost impact of the new terms on the City budget was not presented in the Finance Director’s report to the City Council.
Importantly, Police Department employees will continue to contribute a small percentage toward the cost of their pensions: 50% of pensions contributions above 37% of salary. (Pension contributions are currently 44% of salary.)
As with other recently negotiated contracts, the police contract does not cap the City’s liability for future cost increases in pensions or medical, vision or dental benefits, as recommended by the MTRC.
For the City budget as a whole, employee benefit costs have increased from 25-33% to 53% of salaries over the last decade, according to MTRC calculations. The Finance Director confirmed the percentage has jumped
to 56% in the FY 2012-13 budget. The largest portion of this escalation comes from pension costs.
New Police Department hires will receive a pension of 2%-at-50 rather than 3%-at-50, which will be calculated on the highest 3 years of salary, rather than the highest 12-month period. The employee’s contribution to the medical retiree benefit will be $50 per two-week pay period. (The City has contributed $1.6 million annually for 2 years to fund this previously unfunded benefit.)
The City identifies the key provisions of the agreement as follows:
• Wages – No salary increase during the term of the contract.
• Retirement Plan – Effective August 1, 2012, employees will continue to pay 50% of the Employer PERS rate above 37%, plus an additional 0.06085%.
• Retirement Plan – Second tier of 2% @ 50 with the three year average PERS benefit calculation. (currently: 3% @ 50).
• Retiree Medical – Employees will contribute $50/semi-monthly beginning August 1, 2012.
The City identifies minor contract adjustments for police officers as follows:
• Term – Two and one half (2 1/2) years, 1/1/11- 6/30/13
• Compensatory Time Off – The ability to accumulate up to 160 hours (current: 144 hours).
• Cash for 1 Year of Unused Vacation – Allow the ability to sell back a maximum of one year’s accrual of unused vacation time, provided that two weeks of vacation and/or leave time is taken in the year of the sellback and that one week of vacation accrual remains on the books.
• Cash for Watch Duty – Officers assigned to the duties of watch commander can choose to receive cash or compensatory time for the duration of the assignment (current: compensatory time only).
• Court Appearances – Provision regarding payment for Officers appearing in court on their day off, due to matters involving their service with a prior law enforcement agency.
• Tuition reimbursement – increased to $2,400 per fiscal year (current: $2,000).
• Change the title of “Funeral Leave” to “Bereavement Leave.”
The City identifies minor contract adjustments for mid-management police captains as follows: (Also to be considered at the August 6 Council meeting.)
• Term – Two and one half (2 ½) years, 1/1/11- 6/30/13
• Jury Duty – Time off with full pay for the duration of the trial (current: 30 days paid maximum).
• Holidays – Christmas Eve as an entire day off.
The firefighters group has not yet reached agreement. Negotiations are being assisted by a state mediator.