One employee group contract down, seven to go.
The City Council unanimously approved a new memorandum of understanding with the individual sworn police managers bargaining group Tuesday, the first finalized labor deal for the city since all eight employee groups saw their previous contracts expire in June.
Only six employees make up the police management team: one assistant police chief, one captain and four lieutenants. The new, three-year contract is expected to save the city only about $27,000 per year.
But to Capt. Darren Pytel, who represented his employee group at the bargaining table, and his colleagues, the MOU is no small deal. It represents a 3.5 percent decrease in each employee’s total compensation.
“The MOU represents a very significant change in our salary and current and future benefits,” Pytel said. “However, we understand the city’s long-term finances are important to get in order and we have to do our part to help them with that.”
Under the new deal, the police managers will start paying 3 percent of the employer’s share of their pensions to CalPERS, while continuing to pay the full employee share as they have been.
For retiree medical benefits, the group agreed to give up the full family plan and instead will receive a retiree medical plan where the employee can cover only one dependent, instead of two or more.
City Manager Steve Pinkerton says retiree medical benefits put a bigger burden on the city’s budget than any other piece of employee compensation. The full family plan costs the city about $1,500 per month per employee.
The city manager told the City Council on Tuesday that this concession will save the city about $10,000 to $15,000 per employee annually.
Should a police manager retire before Dec. 31 this year, however, he or she still would qualify for the family plan that covers the employee plus two or more dependents.
For current employee health plans, the police management group agreed to hand back $1,000 from the $1,500 maximum cafeteria cash-out benefit they had been eligible to receive. The new MOU caps the cash-out at $500 per employee; the reduction will be phased in over three years.
The cash-out plan works by offering employees cash in lieu of taking the city’s health insurance. Employees who are insured under a spouse’s plan, for example, are eligible to cash out what they would have received from the city, up to a certain amount.
Any new police management employee will start out with a $500 cap on the cash-out benefit, a policy that likely will be standard for new employees across all labor groups.
In exchange for the concessions to which the police managers agreed, the city will grant each employee a 2 percent pay hike in each of the next two years, and a 1 percent raise in the third year of the contract.
Current employees are still eligible to retire at age 50 for 3 percent of their final salary for every year worked. Employees hired after July 1 would receive 3 percent at age 55.
For Pinkerton, this first contract is only the beginning. The city manager projected in June that the city could save more than $4 million annually through labor negotiations.
He wouldn’t speak about the status of the other ongoing negotiations, but he did say Wednesday it’s no secret that the city is asking for similar concessions from each of the seven remaining bargaining groups.
“What we’re getting from (police managers) is 100 percent consistent with what was in our guiding principles and where we want to be with all our groups,” Pinkerton said Wednesday, adding that the majority of the savings from this MOU will come in the second and third years.
“This is a template,” the city manager said. “Public safety is a little different, (but) paying more toward PERS, going to a less expensive retiree medical plan, phasing out of the cash-out over the life of agreement and in return some modest raises” are what the city is proposing.
Pinkerton has projected that the city’s cost for medical benefits soon will rise from 7 percent of payroll to 20 percent, a $1.7 million annual increase.
The city manager hopes to use the savings earned through negotiations to cover some of those costs, in addition to other unfunded liabilities and deferred maintenance items that have piled onto the city’s budget over the past few years.
Meanwhile, the city still has lots of work to do to strike deals with the remainder of its employee groups.
In late September, representatives of the Davis City Employees Association, one of the city’s largest employee groups, told The Enterprise that “there’s no way (DCEA) employees could sustain” all the cuts the city has been asking for.
Each employee group continues working under its most recent contract until it can reach a deal with the city on a new MOU.
— Reach Tom Sakash at firstname.lastname@example.org or 530-747-8057. Follow him on Twitter @TomSakash