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originally published at: www.pressdemocrat.com

Cotati police concessions could impact other cities

By JEREMY HAY
THE PRESS DEMOCRAT

Published: Thursday, August 12, 2010 at 3:26 p.m.

In a development likely to frame other law enforcement labor talks, Cotati police have agreed to a two-tier pension system and to begin contributing toward their pension plans and medical benefits.

The agreement, which reduces benefits for future officers, affects only five police officers, five dispatchers and a community service officer in Sonoma County’s smallest city.

But it is certain to be watched closely across the region, both by cities struggling to cut costs and by police and fire unions that fought long and hard to get the most generous pensions in the public sector.

The contract changes pension formulas so that newly hired officers will have to wait to retire until they are 55, when they would qualify for up to 87.5 percent of their salary. Officers can now retire at 50 with up to 90 percent. Similar changes were made for non-sworn police department employees.

The savings won’t be much in the next few years, but “further down the road they are considerable,” said Nick Franceschine, an actuary who owns North Bay Pensions, a retirement plan manager.

The 3-year agreement, signed Wednesday, was welcomed by city officials who, despite the recent passage of a half-cent sales tax measure, are facing a drum-tight budget.

“One of Cotati’s biggest financial challenges has been the increasing cost of employee-compensation packages,” said city manager Dianne Thompson. “Each of these changes is an important step towards the city’s goal of financial sustainability.”

And officials in other cities said the agreement was notable for what the city achieved.

“It’s a significant accomplishment,” said Fran Elm, director of human resources in Santa Rosa, where contract talks with officers start in about a year.

The new contract comes in the context of a furious national debate over public sector benefits.

“This is something they’re really pushing in all parts of the country, with very different degrees of success,” said Andy Merrifield, a political science professor at Sonoma State University.

The concern over benefits has been exacerbated by a severe recession that’s put government budgets under extraordinary pressure. Increasingly, the retirement plans are seen as a key factor undermining the long-term finances of local and state governments.

Defenders argue the benefits are just compensation for public service jobs that traditionally paid less well than private industry and, in the case of public safety workers, are more arduous and risky.

But critics of the benefit plans say they are too generous and a crippling future liability to cities and states trying to maintain services and staffing in the face of shrinking budgets that are unlikely to grow robustly for years.

Oakland police officers this week agreed to pay the full employees share of their pension premiums, equivalent to about 9 percent of pay. The pact also reduces benefits for new hires.

Cotati police representatives noted that last year they took a 14 percent pay cut; under the new contract they will gain it back over three years. And they said the new contract signaled their continued commitment to helping the city regain a sturdy financial footing.

“I think we stepped up to the plate again,” said Officer Chris Kaupe, president of the city’s 11-member police officers association, which also includes dispatchers.

But Kaupe acknowledged that the contract was negotiated against the backdrop of growing public scrutiny of public sector retirement benefits, in particular those for public safety personnel.

“There’s the political and financial environment and the way the public feels about the current retirement system — they want to see change and we are making those changes,” Kaupe said.

The benefits issue was central to the two-month negotiations, he said, and on Wednesday Mayor Robert Coleman-Senghor, in acknowledging the union’s concessions, also implicitly recognized a victory for the city at the bargaining table.

“These concessions were considerably more than many others in the state or the region,” he said.

In Sonoma County the debate over the benefits has been particularly vigorous in Santa Rosa and Rohnert Park, which among the county’s nine cities face perhaps the most pressing budget crises, and where altering public pension plans has been a focus of official’s efforts.

In those cities and others, Cotati’s new contract is more than likely to play a role in labor negotiations down the road.

“It certainly will be used by city managers or their negotiators to say, ‘Look, this can be done, this has been done, be responsible like the Cotati police officers,’” SSU’s Merrifield said. “It will be a tool in the tool box.”

In Santa Rosa, Councilman Gary Wysocky wouldn’t comment on whether the Cotati development would impact future labor negotiations with police officers, but said, “Our executive staff has to lead the way with shared sacrifice.”

Rohnert Park councilman Jake Mackenzie was more direct: “What the Cotati police did has to be on the table.”