Will the Gilroy police officers follow in the footsteps of the
city’s firefighters union and agree to significant contract
concessions?
Will the Gilroy police officers follow in the footsteps of the city’s firefighters union and agree to significant contract concessions?
That’s the million dollar question that hangs in the balance as the City Council prepares to meet in closed session Thursday to discuss the status of negotiations with the city’s most costly bargaining unit.
Whether the police union, which had 56 members as of July 2009, will present the city with a proposal is unclear.
What is clear is that the city and union have allowed a year-long, $1.1 million concessions agreement to expire June 30.
The council has made no secret that it is seeking a two-tiered retirement plan for all city employees, in which new hires receive reduced benefits and a different retirement plan from current employees.
Councilwoman Cat Tucker said the council is serious about coming up with a retirement and benefit package that the city can afford.
“We’re not playing games,” Tucker said. “We’re just trying to figure out what’s best for the community. The current pensions are not sustainable.”
She hopes the police union follows the fire union’s lead with a two-tiered plan proposal.
The GPOA met with city human resources director LeeAnn McPhillips and the city’s legal counsel Charles Sakai last week. However, POA President Mitch Madruga could not be reached for comment this week about whether the union had hammered out a new proposal for review this week. Council members said they had no idea what to expect going into Thursday’s meeting.
“I don’t know if they’ll tell us that we’re at an impasse or that we have an agreement on the table,” Councilman Dion Bracco said.
The International Association of Fire Fighters Local 2805 came to an agreement with the city late last month that included a two-tiered retirement system.
As part of the agreement, which will last through June 2013, all newly hired firefighters will receive a scaled back “2 percent at 55” plan.
The maximum percentage of their salary that firefighters will be able to collect under the new system is about 75 percent of their top wage. The earliest firefighters could collect these benefits is at 55 years old.
Under the old system – which still applies to current employees – firefighters received 3 percent yearly of their highest annual salary starting at 55 years of age, and could collect 90 percent of their top wage.
The new contract also calls for all firefighters to begin to contribute 9 percent toward their pensions, an amount that the city formerly paid.
That figure totaled about $477,000 this past fiscal year, City Administrator Tom Haglund said.
The city also pays employee contributions on behalf of police, totaling about 9 percent of their salaries – or $800,000 for all police annually. That is in addition to the 26.25 percent employer contribution the city makes toward police pensions, which totals about $2.3 million each year.
City Council members say they want separate benefits for newcomers in all city positions similar to the agreement they reached with firefighters.
“The city needs to get some structural change in all of our contracts because the world’s a different place today,” Bracco said. “Other cities are wrestling with this, and they’re asking for the same thing.”
Councilman Craig Gartman said the city ultimately could be bankrupted if it does not come up with a less expensive retirement plan for new employees.
Gilroy police officers have a 3 percent at 50 plan retirement plan, meaning retired police receive annually 3 percent of their highest yearly salary for each year they worked. They can start collecting these benefits at age 50 and can collect up to 90 percent of their highest annual salary.
Although police are technically without a contract, the conditions of the contract approved in July 2006 prior to last year’s concessions agreement remain in effect until an agreement is reached or an impasse is declared. The city would pay $1.1 million more toward police services this fiscal year than it did last year if it remained without a contract for the entire year. However, City Council members say they will force binding arbitration before allowing that scenario to unfold.
The city spent about $19 million annually on police services in each fiscal year from 2007 through 2009 – totaling more than 40 percent of the city’s general fund for each year.
Under binding arbitration, an impartial third-party arbiter settles differences between the city and the union if either of them determine that labor negotiations are at an impasse.
The city has never forced binding arbitration, although the fire union has forced the process twice over contract impasses. The arbitration process is outlined in the city charter.
Haglund would not provide details this week about how long the city would be willing to operate without a new police contract, saying he was “not in a position to discuss” the matter. However, he remained hopeful that the city and the union could agree on a new contract soon.
All city unions agreed to some form of concessions last summer. Although the city’s American Federation of State, County and Municipal Employees chapter and the Gilroy Management Association both agreed to two years of concessions, International Association of Fire Fighters Local 2805 and the GPOA only agreed to one year.
Madruga said the nature of the negotiation process is slow going.
The GPOA meets with city human resources director McPhillips and Sakai, who then relay to the Council what’s on the table. The council can accept an offer, modify it, or reject it.
As a result, Madruga said he did not know what council members have specifically said about the union’s proposals.
