New contract with firefighters calls for hefty hike in pension contributions

Firefighters in the Livermore-Pleasanton Fire Department have agreed to start paying 9% of their benefit costs starting next July, but that’s still not adequate for critics seeking greater reforms to Pleasanton’s employee pension obligations.

The new contract, negotiated by City Manager Nelson Fialho and the Local 1974 of the International Association of Firefighters union, which covers LPFD’s unionized employees, would cut the city’s costs by more than $1 million when fully implemented. The full cost reduction would be $2.13 million, shared equally by Pleasanton and Livermore who operate the LPFD under a joint powers agreement.

Until recently, and for about 10 years, firefighters and other Pleasanton city employees contributed nothing toward their CalPERS pension program after the city agreed to cover all costs in lieu of lowered wage increase demands. As benefit costs increased over the years, this agreement proved to be unsustainable, leading to contract changes that public employees’ police and now the firefighters unions have accepted.

Since September 2010, the firefighters’ union members have been contributing 2% of their pension costs. Once this new contract is ratified, they will contribute an additional 4% for a total of 6%, with the full 9% contributed rate kicking in next July 1.

The proposed contract, which includes a two-tier pension-retirement formula affecting firefighters hired after it takes effect, was discussed in detail during a two-hour-long City Council meeting Tuesday in what was called a “sunshining” session. Council members reviewed the specifics of the contract with outside consultant John Bartel, president and chief actuary of Bartel and Associates, who has reviewed and helped draft union contracts for Pleasanton for years.

He said a provision of the new contract changes the retirement formula from 3% of the most recent year’s salary for those who have reached 50 years of age to 3% of the three highest years of earnings at age 55.

“The program will realize substantial savings over the long-term for the city once all employees are on the less costly retirement program,” Bartel said.

Although the council took no action Tuesday night, it has scheduled a special meeting for next Tuesday at which time it is expected to ratify the firefighters’ contract.

But critics of the proposed contract who have also talked against earlier contracts signed with other city employees warned that the council is failing to take strong measures to reduce the overall multi-million-dollar pension liability problem.

Bart Hughes called the proposed contract “the same old broken public process that is once again another day late and a dollar short.”

“In the end, we’re simply continuing to serve a protected class of employees who will continue to be protected to the detriment of everybody else in the community,” Hughes said.

Speaking about retirees in the municipal work force, Hughes added: “These are not poor people. They are being given multi-million-dollar retirements.”

He said that by continuing to pay costly pensions, the city will be forced to hire fewer police and firefighters in the future.

Another outspoken critic of the public employee pension system, David Miller, agreed.

“What is the city’s unfunded pension liability now?” he asked. “We should be discussing this at every council meeting. This City Council is leaving the city with a huge liability that the next council will have to resolve.”

He urged voters to ask candidates for mayor and City Council is Pleasanton’s upcoming municipal election about where they stand on pension reforms.

Former Councilwoman Kay Ayala said she fought against city staff’s plan to start paying the full costs of employees’ pension plans when she was on the council, but was rebuffed.

“The staff lied to the council because it also has the same pension benefits that are now leading to the downfall of the city,” Ayala said.

Another speaker, Dr. Howard Long, called the pensions being offered firefighters and other employees “financially unsustainable.

“You’re spending our grandchildren’s money without them able to be represented,” he said.

Yet another speaker criticized the council and city staff for negotiating with the unions in closed session “where none of us know what’s going on.”

“Then you come up with a plan like this and all of you say yes,” he added.

But Councilman Matt Sullivan said employee contracts and the city’s pension liabilities have been discussed in open meetings repeatedly.

“We’ve talked about this subject more than any other topic over the last two years,” he said.

Addressing the critics who spoke at the meeting, Sullivan added: “I understand you don’t like what we’re doing. You may not agree, but we have adopted a long-term plan. You may not think we are doing enough or moving fast enough, but in my opinion we are addressing (the issue) through the bargaining process.”

“I want to thank the staff and firefighters for working in a collaborative way to achieve the goals we set more than a year ago.