City of Santa Monica workers picketed the mayor’s annual State of the City address Wednesday over cuts to healthcare and pensions.
About 100 workers represented by the Teamsters union held a demonstration outside of the Soka Gakkai International Ikeda Auditorium in downtown Santa Monica Wednesday evening to protest contract negotiations with the city that have stalled for more than a year.
“This demonstration is how we peacefully express our discontent,” said Carlos Rubio, a Teamsters Local 911 negotiator. “We want to be heard and we want city leaders to stand with workers who take care of our city.”
As he tries to balance a budget weighed down by a $448 million unfunded pension liability, City Manager Rick Cole is asking 1,800 employees to contribute more of their earnings to their healthcare and pension plans, Rubio said.
CalPERS, the state’s public employee retirement system, fell into crisis during the Great Recession and left municipalities around the state with deep gaps between the pensions they had promised workers and the value of CalPERS’ assets.
Santa Monica is one of the only cities in California that has started making payments on its liability over an accelerated timeline. Combined with rising pension costs and flattening revenues, paying off the liability will result in a budget shortfall of $20 to $50 million over the next decade.
Now, Cole is trying to reduce the city’s contribution to employee pensions to bring the budget back into the black.
“These negotiations are particularly tough because we must tackle pension reform to maintain long term financial health,” the city said in a statement. “We are fortunate to have tremendously talented and dedicated staff who provide exceptional service to the community. We continue to hope to reach agreement on a path that matches the realities of the day.”
Under a pension plan that dates back decades, workers hired before July 1, 2012 — who make up about two-thirds of the city’s workforce — received 2.7% of their highest annual earnings times the number of years of service upon retirement and contributed 6.7% of their earnings toward their pension. Those hired after 2012 received 2% of their monthly salary and contributed 7% of their earnings.
The healthcare agreement for city employees represented by unions such as the Teamsters, Municipal Employees Association and Public Attorneys Union, as well as those covered by the city’s executive pay plan, was executed in January 2015 and expired in December 2018.
Under the agreement, workers covered 6% to 7% of their monthly healthcare premiums. In 2015, an individual contributed between $30 and $50 per month and a family contributed between $80 and $130 per month.
The pension and healthcare plans have been under negotiation since December 2018. While neither the unions nor the city were able to discuss the terms of the negotiations, Rubio said he believes the contracts that Cole has proposed put too much onus on workers to cover the costs of retirement and medical care.
“I understand that we need to address pension reform and medical insurance cost reform, but not on the backs of the workers,” Rubio said.