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Police, fire
pension fund outlook dims
From the WORLD-HERALD, August 16, 2007
The outlook for Omaha's
police and fire pension fund continues to get worse.
The fund's projected shortfall has grown from $280 million to
$320.5 million, according to a new review by the city's actuary.
The growing shortfall is problematic for the long-term health of the police
and fire pension fund, but it does not compromise the fund's ability to pay
the pensions of current retirees.
"This is not a surprise," City Finance Director Carol Ebdon said.
Omaha's police
and fire pension system has been underfunded since
2001, but the widening shortfall has recently become a major concern for many
elected officials.
Mayor Mike Fahey and several City Council members have said they want to see
changes in the new police and fire contracts that will reduce or eliminate
the pension fund shortfall.
Some officials have expressed concern that if the problem is not corrected,
taxpayers may have to bail out the pension fund down the line.
The latest review from Milliman Consultants and
Actuaries is based on figures from 2006. The actuary's projection is for the
amount needed to pay retirees for the next 27 years.
The city gets an annual update on the pension fund's status. In the past, the
update was done every two years, but that was changed recently because of
concerns over the fund's viability.
Several factors contributed to the growing shortfall in 2006, says the report
that is expected to be presented to the Police and Fire Pension Board today.
They include:
• Together, the city and
police and firefighters are not making large enough contributions to the
pension fund.
• Current police and firefighters are earning more than the actuary expected,
which will result in higher pensions when they retire.
• Police and firefighters who retired in 2006 "spiked," or boosted
their pension payments by working lots of overtime and selling back comp time
in the years approaching retirement.
There is one bright spot in the actuary's report. The pension fund's
investments performed better than expected in the stock market last year,
which led to a gain of $41.6 million,
$6.5 million above the projection. Without that gain, the shortfall
would have been even bigger.
The actuary concluded that combined pension contributions need to be boosted
by 13 percent of pay in order to fully fund the police and fire pension
system for the next 27 years. Last year, the suggested increase in
contributions was 12 percent.
Currently, police contribute 15 percent of their salaries into the pension
fund, and the city contributes 20 percent. Firefighters put in 15 percent,
and the city contributes 21 percent.
Fahey will ask the police and fire unions to increase employees' pension
contributions as part of the current contract negotiations, said his chief of
staff, Paul Landow. Both contracts expire at the end of the year.
Police and firefighter wages also grew more last year than the city's actuary
had anticipated. The higher wages for active police and firefighters mean
that their pensions will be larger when they retire. That, in turn, increased
the projected pension shortfall by about $20 million, the report says.
One reason the wages were higher than expected last year is that a large
number of police and firefighters are preparing to retire, Ebdon said. Many of them have been accruing overtime and
selling unused comp time, all of which boosts the pay upon which pensions are
calculated.
Spiking by police and firefighters who retired in 2006 added $5 million to
the pension fund shortfall, the report says. The actuary assumed that 2006
retirees would spike 10 percent, meaning that the wages upon which their
pensions are based would be 10 percent higher than their average year's
wages.
In actuality, the 54 police and firefighters who retired last year spiked an
average 18 percent, further contributing to the pension shortfall.
"I think this spells it out well — spiking is a problem," said
Councilman Chuck Sigerson, who is also on the
Police and Fire Pension Board. "We're still running a deficit every year
because of the spiking and other things."
Because of spiking, some police officers and firefighters are retiring with
pensions that are equal to or larger than their base salaries immediately
before retirement.
Sigerson and several of his City Council colleagues
have called for pensions to be calculated using base salaries. Currently,
pensions are based on an employee's highest 12 months of wages during the
past five years on the job. Those wages can include overtime pay, comp time
and other forms of pay.
Fahey has also called for spiking to be eliminated, and he has indicated that
he will push for that in contract negotiations.
S.M., police officers reach contract
From the Santa Maria Times, August
16, 2007
Eight months after their last
contract expired, and just a few weeks before they'll have to start
bargaining again, Santa Maria
and its police officers' association have negotiated a new agreement.
The proposed pact between the city and Santa Maria Police Officers
Association is scheduled to go before the City Council for ratification
Tuesday.
The council is expected to meet at
6:30 p.m. at City Hall, 110 E.
Cook St.
The proposed agreement is a one-year package, said Rick Haydon,
who represented the city in the talks, that includes
a 3 percent salary increase for sworn personnel and a 7 percent increase for
non-sworn personnel.
Non-sworn employees hold jobs such as dispatchers and police services
technicians.
If approved by the council, the contract will last for the next four months,
expiring on Dec. 21.
“(Discussions) went longer than we expected,” said Lt. Ken George, who was
one of the POA negotiators. “We're glad it's over.”
Though negotiations were long and sometimes frustrating, the two sides will
only have a few weeks' rest before they begin discussion on next year's
contract, which are expected to begin by mid-September or October.
The most significant change to the proposed contract is the salary
adjustment, Haydon said, adding that some minor
changes were made to the benefits package.
Officers have been working without a contract since the last agreement
expired Dec. 22, 2006. Under those circumstances, officers essentially worked
under the terms of the old agreement until the new pact is ratified.
The union contracts cover sworn officers through the rank of lieutenant. The
two commanders and the chief are not included.
The negotiated salary adjustments are based on a salary survey of surrounding
communities. The survey looked at the cities of Lompoc,
San Luis Obispo, Santa
Barbara, Ventura and Oxnard, in addition to Santa Barbara County
and the state, Haydon said.
Officers were interested in what the survey showed for salary increases,
George said, as well as getting the negotiated contract to begin
retroactively when the last contract ended.
However, the proposed deal is retroactive only to April 28.
The city didn't agree to full retroactivity for a number of reasons, Haydon said, one of which is the similarity between this
proposal and a proposal earlier this year that was not ratified by the union
membership.
“We have been willing to give them this from the beginning but they were
holding off for other enhancements that we (the city) just weren't willing to
entertain, unfortunately,” he said.
The new salary increases are expected to cost about $300,000, Haydon said, and will come from the city's General Fund.
“Luckily we kept our expenditures in check at the end of the fiscal year,” he
said, adding that the General Fund was “within 94 and 96 percent of
expenditure authority.”
So the money saved last fiscal year, which ended June 30, can go toward these
salary increases.
Looking to the next round of talks between the two groups, Haydon said officials will be more diligent in trying to
work out an agreement that would be supported by everyone.
George added that next time there may be more focus on getting talks wrapped
before the contract expires.
Even though officers and the city were in extended contract talks, George
said there were never any work-related issues or work slowdowns.
Contract talks also for the most part stuck to the issues at hand, George
said, and an effort was made to keep politics out of the discussion.
“Sometimes it creeps in,” he said, but the negotiators kept things “in the
right perspective.”
The POA has clashed with city management in the past over working conditions
within the department. The union has gone so far as to survey its members on
their feelings regarding morale, management and other issues.
Union officials claim that low morale and a deteriorating work environment
are making it harder to attract and retain quality officers, and have painted
the department as an environment of patronage and favoritism by the chief and
city management.
Officials at City Hall have refuted these claims and the police chief has
said he is working with the POA board to discuss issues of the department's
operation.
This fall will not only see talks begin again with the POA but negotiations
with two other bargaining groups.
The city's contract with the Service Employees International Union Local 620,
representing both full-time and part-time personnel in departments outside
public safety, expires at the end of December, and the pact with the Santa
Maria Firefighters Union Local 2020 expires Feb. 18.
Talks with those groups are expected to begin this fall as well.
Tempe police receive pay raise
From The Arizona
Republic, August 13,
2007
The Tempe Police Department has raised starting salaries again,
ensuring its position as one of the Valley's best-paying agencies.
Starting officers will earn more than $54,000, nearly $4,800 more than the
next-highest-paying department. Officers will top out at more than $73,000.
Sergeants will start at $80,000 and top out at $88,000.
But the raises aren't a surprise.
"Our police officers and sergeants go out and work hard to make sure our
city is safe to live in," said Bryan Hall, Tempe Officers Association
president. "We have a memorandum of understanding with the city that
says we have to remain in the 75th percentile of the benchmark cities."
Those benchmark cities are Chandler, Mesa, Gilbert, Scottsdale,
Gilbert, Phoenix, Glendale
and Peoria.
The union each year has to wait until all of Tempe's benchmark cities release their
salaries before they start discussions with the city. The new salary will be
retroactive to July 8 and is expected to show up on officers' paychecks Aug.
27.
The Tempe Police Department has added 30 new positions this year and hopes
the new hike in salaries will help the force add more. The department has
more than 300 officers.
Like other Valley police agencies, Tempe
is aggressively recruiting new officers. The city believes salaries have to
be competitive if the department is going to be successful. A more aggressive
marketing campaign also is helping to increase the department's visibility,
recruiting Sgt. Dan Masters has said.
From
the Boise
Weekly, August 8, 2007
It’s official:
The Boise Police Union has a new contract.
The Boise City Council officially approved the new contract
during a special meeting Wednesday morning, following a vote of approval by
the members of the Boise Police Union on Monday night.
The contract was approved by a five-to-one vote, with Council
member Alan Shealy casting the only vote against
the contract.
"This deal puts me out of my comfort zone, and I,
reluctantly, will not be supporting [the contract]," Shealy
said in council.
Shealy pointed to
the offer the city made to the police union in February, a deal that would
have made the force the best paid in the region, but that was rejected by
union members. At the time Shealy said he would be
hard-pressed to better that contract, and today he said he hadn’t changed his
mind.
"I want to do right by them and do right by the city of Boise," Shealy said. He explained that his opposition to the
contract came from the fact that the city has a finite amount of money with
which to fund the entire city.
"We have to look solely at the tax-supported budget," Shealy said. "It’s not out of rancor or any
vindictiveness at all."
The rest of the Council seemed pleased to put the issue to rest,
while staying within the budget.
"I’m really pleased we were able to find a way to reach an
agreement with the union," said Council President Elaine Clegg.
"I’m very happy with the contract."
In general, Boise
police will receive an across-the-board 3 percent cost-of-living increase
annually, as well as a .5 to 1 percent market-adjustment raise effective
April 1, 2007. The main variation from the contract offered in February is a
larger increase for the most senior officers.
Additionally, entry level starting pay was increased to $36,000.
The contract also allows the department more flexibility in
training its officers, and compensates officers three hours of pay when a
court appearance is canceled at the last minute, or the defendant fails to
appear.
The union also agreed to move to a single health-care plan,
rather than the multiple options available in the past. The move provides a
"substantial" savings to the city, although those savings will be
used to fund additional benefits.
Many of the larger issues surrounding long-term insurance for
retired employees have yet to be worked out, but Police Chief Michael Masterson
the union and the city have agreed to ongoing talks to find ways the city can
meet its legal obligation.
One of the biggest changes since February is that the contract
will be for four years, rather than the two years the city had favored.
Most Council members alluded to the long and acrimonious negotiation process that
lasted more than a year since the last contract expired. In recent months,
negotiations turned particularly nasty, with union leadership making personal
attacks on Mayor Dave Bieter and one of his aids,
Jade Riley, who served as a go-between in the negotiation process. But
everyone seemed ready to move on from the controversy.
"This has been a cloud that has hung over us," Bieter said, but later added that people are already
moving on.
"There is a really strong relationship between the
community and the police department."
Masterson had two words to describe how he
felt—"relieved," and "pleased."
"It brings a contract to a group of hard-working and
dedicated people," he said.
While Union President Kip Wills could not be reached for
comment, Masterson said he was told the contract was approved by the union
membership by a large majority. "I’m pleased and excited that the
overwhelming majority put a strong stamp of approval [on the contract],"
he said.
Things aren’t completed yet though. While the contract is
signed, city officials feel there’s a lot to learn from the drawn-out
negotiation process.
"We have to avoid the tendency of being so relieved it’s
over that we don’t look back," said Council member Maryanne Jordan.
Already, the city and the union are planning to meet in future
weeks to find a way to smooth-out and shorten the next negotiations.
Police guild
approves contract
4-year deal would give raises above inflation
From the Spokane
Review, August 14, 2007
The Spokane Police Guild, which has worked 19 months without a
contract, has overwhelmingly approved a four-year deal with pay increases
above inflation.
The guild voted 180 to 30 in favor of the contract late last
week, Spokane's
Chief Operating Officer John Pilcher confirmed
Monday.
"It was a challenging negotiation," Pilcher said. "It took a lot of back-and-forth and,
I think, a lot of give-and-take."
Attempts made to reach guild officials late Monday afternoon and
evening were unsuccessful.
If the Spokane City Council signs off on the deal, salaries will
increase retroactively, dating to the beginning of 2006. Union members would get
checks for the missed pay, reflecting raises that would have occurred every
six months: 2.7 percent in January 2006, 1 percent in July 2006, 4 percent in
January 2007 and 1 percent last month.
Next year and in 2009, pay would increase by the same rate as
inflation in January and by 1 percent in July. The increases based on
inflation could not be lower than 2 percent or higher than 4 percent.
Chief Financial Officer Gavin Cooley said back payments will
cost the city about $1.25 million, which the city has saved in anticipation
of a deal. An analysis showing how much the changes would cost taxpayers was
unavailable Monday.
The contract also includes changes in medical benefits.
Under their old contract, guild members paid no part of their
medical premiums and 10 percent of their dependents' costs. The new deal
would require members to pay 6 percent of premiums for themselves and
dependents.
Despite lowering the price for those paying for dependent care,
the city expects to more than make up those costs by requiring members to pay
a portion of their own premiums, Mayor Dennis Hession
said.
"We have everybody sharing in that expense," he said.
Co-pays for prescriptions would increase from $5 to $10 for
generic drugs and from $8 to $20 or $30 for brand-name drugs, depending on
the medical plan members choose.
The new deal also would increase the number of hours of unused
sick leave officers would be compensated for upon their retirements, Pilcher said. If approved, guild members would be able to
collect 40 percent of their pay for up to 960 hours.
The guild also agreed to begin negotiations for a new police
oversight system. In April, Hession announced his
support to create an independent ombudsman to examine police conduct. Hession's opponents in the mayoral election also support
an oversight system.
In May, the guild gave Hession a vote
of no confidence. Recently it joined with two other city unions to advertise
support for mayoral hopefuls
City Councilman Al
French and Councilwoman Mary Verner in their bids
to unseat Hession.
Hession has
attributed union actions against him to his contract negotiations.
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