CITY HALL — In another bow to the harsh economic realities that face Santa Monica, all nine employee bargaining units agreed to concessions that will save the general fund over $1 million in the next two years.
For the first time, members of the police and fire departments will pay a portion of their pension costs, which equates to 1 percent of their pre-tax salaries in 2011-12, 2 percent the next year and 3 percent in the final year of the contract.
Other employee groups, lumped together in the “miscellaneous” category, have been paying into those benefits since 2007, and were asked to chip in for health care last year.
This year, those groups also gave up a percentage of their workers’ compensation pay, reducing benefits to 100 percent of their salary for the first 30 days and 75 percent for the next, rather than full pay for the first two months of workers comp.
Performance bonuses were reduced for managers from 10 percent of their salaries to 5 percent, while those for architects, planners, engineers and administrative analysts were ceded entirely for a base salary increase of 3.8 percent.
Savings should equal $245,770 in the first year and $890,935 in the next.
The employee pay-ins negotiated into the new contracts don’t cover the entire cost of the benefits, but the contributions will take pressure off of City Hall in the coming years, said Assistant City Manager Elaine Polachek.
“We’re very pleased that our employees have shown an understanding of changing times,” Polachek said. “They understand that they are well-compensated and well-tended to by management in the city, and I think they understand they have a good contract in these times.”
All nine of the employee bargaining units were brought in at the same time, and given one-, two- or three-year contracts to stagger future negotiations.
Each got a 2 percent cost of living increase for the first year, and all but the division managers, who have a one-year contract, were promised a 3 percent cost of living increase for the second year of the contract.
The process consumed the life of Donna Peters, assistant director of human resources, for the past six months.
“The majority of our bargaining groups this year knew what the financial position was, and wanted to avoid some of the things that are happening in cities around us,” Peters said. “They came in with a little more reasonableness, knowing there was not a lot of room to move.”
Talks began March 28 and one, the Municipal Employees Association, took so long to get passed by its membership that its contract had to be presented in a separate agenda item to the City Council because it missed the deadline for the original staff report.
By the end of the talks, both City Hall and the nine bargaining groups came to mutually satisfactory compromises.
“It’s a fair contract that both sides are happy with,” said Matthew Rice, spokesman for the Santa Monica Police Officers Association. “It’s a good example of collective bargaining going successfully.”
The contracts fall in line with state and national trends, with public employee groups paying ever-larger amounts into their medical and pension costs as general funds flounder under the weight of personnel costs.
In Santa Monica, for instance, a police officer was worth 77 extra cents in benefits for every dollar that they got paid in salary prior to negotiations.
Costs were only slated to rise after the California Public Employees Retirement System posted huge losses in February, fully 24 percent of its total investments.
City Council member Bobby Shriver referred to the rising cost as the “800-pound gorilla in the room” during special study sessions about the City Hall budget.
While local funds could not sustain that level of spending, the packages offered by City Hall and accepted by municipal groups are richer than many being fought out in surrounding cities.
Glendale, for instance, asked its employees to not only cover their share of the costs of pensions, but some of City Hall’s costs as well.
Police in Beverly Hills, previously the best-paid in Southern California, are also having a hard time in their negotiations, Rice said.
Santa Monica, which is less dependent on property taxes than other cities, weathered the recession better and had to ask less of its employees, Peters said.
“We know how lucky we are to work for a city with the financial status we have,” Rice said.
The next step is a tentative agreement with all employees except police and firefighters to create a two-tiered system.
If accepted, new employees hired after July 2012 would get reduced benefits equating to 2 percent of their salary after they hit 55 years old after 20 years of service rather than the current 2.5 percent.
That’s easier to get agreement on because it doesn’t affect any employees that would be voting on the measure, Peters said.
“They’re more likely to agree on something that affects future employees,” Peters said.
The two-tier system will likely go before City Council for acceptance in October.