For the first time in recent city history, police department employees will contribute to their own retirement in a new contract preliminarily approved by the City Council Tuesday.
Under the terms of the agreement, new police department employees will pay 9 percent of their salary towards their retirement, while current staff members will start contributing 2 percent of their pay toward their pensions beginning next January. Previously, the city paid both its portion and the employee’s portion as a competitive hiring incentive, City Manager John Pietig confirmed.
In addition, police employees agreed to forgo pay raises for the next 30 months. The City Council began ratification of the police contract Tuesday.
The police department contract follows the discordant ratification of the fire department employee association contract in September. The firefighters’ union was dissatisfied with what spokesman John Latta called “take-aways.” City firefighters had received a standard 5 percent pay raise the previous fiscal year when other safety employee associations, including the police department, agreed to forego raises due to fiscal belt-tightening.
The recent police contract negotiations took six months, which police association president Larry Bammer called a stalling tactic. “Hopefully now that we’re in the contract, John Pietig will fill the two vacant lieutenant positions the chief wants to fill,” said Bammer, who said delays in approving the pact will now allow hiring under the new contract terms where employees paying their own 9 percent retirement contribution.
Pietig denies that the length of the negotiations was manipulated and said changes in the new plan were made to lower the city’s costs for employee retirement. Bammer said the city has saved $500,000 over two years by not filling the two positions. “In the meantime, we’ve shrunk our department down from 50 to 45 officers,” he said, adding that he hopes the city will hire the two lieutenants in time to be trained before summer “when we get slammed.”
Pietig countered by saying that all the police department’s rank-and-file positions are filled and only one police staff position has been cut since 2007. He added that the lieutenant position has been vacant for two years. The challenge, Pietig said, is saving money while maintaining the same level of city services. Police administrator salaries are not included in union negotiations.
“Pay your own way” retirement plans are being adopted in cities across the state to offset receding budgets and soaring employee retirement costs. The new stipulation in Laguna is expected to save $65,000 in the next fiscal year and $130,000 each following year, according to the city’s report on the police employees’ contract. Its effective date is April 16.
Police can begin receiving pension payouts as early as age 50 after 30 years of service. Payouts are calculated based on 3 percent of an officer’s salary multiplied by 30 years of service and would ultimately tally 90 percent of the highest salary as retirement, Pietig said.
As part of the agreement, the city will absorb increases in police employee medical premiums up to 8.6 percent for 2012 and up to 10 percent for 2013.