Faced with pressure from unions to make reciprocal and
meaningful cuts, Councilman Perry Woodward will again ask his
colleagues next week to cut their health benefits.
Faced with pressure from unions to make reciprocal and meaningful cuts, Councilman Perry Woodward will again ask his colleagues next week to cut their health benefits. When he first brought up the idea – which could save the city $64,000 annually – Monday, it failed without a second.
Since, the vote, Woodward, met with Council member Cat Tucker to come up with a new idea, though Tucker said she was still on the fence. Rather than eliminating benefits – which would save enough money to re-hire one employee, such as a planner, engineer or accountant – Woodward said he will ask colleagues to reimburse the city for their benefits. That way, they can still enjoy the scales of savings that come with Gilroy’s group plan rather than paying higher premiums through private, individual programs, he said.
“I’m basically looking for votes now,” Woodward said. “How about we let (council members) keep their coverage, but they have to pay all their own costs. So for example, the mayor should have to pay $1,315 a month, and if his monthly stipend (of $1,094) doesn’t cover it, then he should.”
If Woodward can’t convince his skeptical colleagues, he said he would consider gathering enough residents’ signatures to place the matter on an upcoming ballot. That would cost the city between $46,000 and $72,000, according to the Santa Clara County Registrar of Voters.
Union officials such as Tina Acree – the American Federation of State, County and Municipal Employees Local 101 business agent who represents most of City Hall – decried the council’s “greed” after Woodward’s failed motion Monday night, but she lauded his latest idea Thursday as a “fair and equitable solution.”
“They are asking all the employees to take large cuts to help this city out, but the leaders will not help out. It’s an abomination,” Acree said. “The mayor owns an insurance company, and he doesn’t have insurance benefits? I find that hard to believe.”
Despite criticism from unions that have agreed to forfeit raises and accept furloughs – which will cut their members’ annual earnings by more than 9 percent over the next two years – Tucker said she was still on the fence because “medical insurance is such a critical issue for most families.”
“I can understand why people are upset about this, but no time during any of the discussions with the bargaining units did anyone ask them to give up their medical benefits,” Tucker said. “I don’t know what (Councilman Dion Bracco’s or Mayor Al Pinheiro’s) personal situations are, and I don’t feel comfortable taking their benefits away.”
Pinheiro said council members should take an equitable 10 percent cut to acquiesce union demands, but Woodward and union representatives laughed at that because it would only save the city $6,561 a year, according to city figures. Though council members are part-time employees, Pinheiro and others said their jobs consume up to 80 hours a month. Accordingly, if the positions come with benefits, council members should enjoy them, Pinheiro and others said.
A survey of 64 public agencies in California, including the city of Morgan Hill and the Orange County Transportation Authority, showed 22 percent of agencies cover benefits costs for elected officials and dependents. Nine percent of those agencies deny elected officials coverage outright, according to the 2008 California Society of Municipal Finance Officers survey.
In 2007, the average American employee paid $58 monthly for health insurance, while employers paid $3,785 monthly, according to the Kaiser Family Foundation. The average individual annual premiums during that same time was $218 a month for generally fewer benefits, according to America’s Health Insurance Plans.
Along with council members Tucker and Peter Arellano – a physician at Kaiser Permanente – Woodward secures his own insurance elsewhere. All three council members opt for Gilroy’s “cash in lieu” option that adds about $200 to their monthly incomes. The mayor’s salary equals $1,094 a month, but adding benefits lifts his monthly compensation to more than $2,400 – more than twice most of his colleagues’ compensation.
The city spends $216,000 on the council annually, $13,500 of which finances small retirement plans, according to city figures. Gilroy requires and pays for every council member’s dental and CalPERS retirement contributions, which allow council members to accrue 2.5 percent of their highest monthly salary once they turn 55 for each year they worked. For a two-term, eight-year council member, that means 20 percent of their monthly salary of $729 – or a $146 pension payment each month.
City council’s monthly medical COSTs
– $397: Council members Cat Tucker, Perry Woodward and Peter Arellano, who decline city health benefits and receive about $200 a month instead. The additional cost of about $200, depending on individual plans, comes from the city paying council members’ dental and retirement contributions, which they cannot decline in their contracts.
– $498: Councilman Bob Dillon (excludes $59 co-pay)
– $985: Councilman Craig Gartman and one dependent (excludes $66 co-pay)
– $1,315: Mayor Al Pinheiro and family (excludes $87 co-pay)
– $1,315: Councilman Dion Bracco and family (excludes $151 co-pay that exceeds Pinheiro’s because Bracco has a different, undisclosed plan.)
Source: City of Gilroy Human Resources Department