We now have the third agreement between the city and a bargaining group. This time is PASEA (Program, Administrative and Support Employees Association) which represents more than 110 employees from all departments in the city.
It is more of the same for the city, grandiose claims of savings, this time, of 2.19 million dollars over the projected baseline contract. The contract savings mainly comes from the continuation of seven furlough days between December 2009 and June of 2010, five in 2010-11, and two in 2011-12. In addition, there are a few structural changes, mainly along the lines of the management group contract that caps the cafeteria plan cash-out for employees, creates a vesting period for retiree medical benefits, and a cost-sharing plan on PERS rate cost increases.
We have of course been through this math discussion and disagree with the city that freezing the contract would automatically roll over the salary inflator. Thus in the real world, freezing the contract would produce a contract of $3.76 million and a cost savings of a little over a million or about $340,000 per year. This is definitely the contract that saves city the most, but it is also the largest bargaining that has signed a contract thus far and also the most rank and file group.
Breaking out the terms of the contract.
Most of the savings are built into furloughs which are of course short-term savings producers.
Furloughs. The MOU requires seven furlough days to be taken in FY09-10 between December 2009 and June 30, 2010; five days in FY10-11; and two days in FY11-12. These furloughs are in addition to the five furloughs previously agreed to via the interim agreement between July 1 and December 1, 2009.
COLAS. PASEA has negotiated a 2% cost of living (COLA) salary increase starting July 2010 and a 3% cost of living increase effective July 1, 2011. These increases were a trade-off for the large number of structural benefit changes impacting employees.
Retirement benefits will offset some of the cost of living adjustments whereby the PASEA employees have agreed:
to pick up 1% of the employee portion of their CalPERS retirement benefit for the second year of the contract and again for the third year of the contract.
Employees also agreed to cover any additional cost of the FY 2008/09 PERS employer contribution rate, up to an additional 3%, for the life of the contract. For Fiscal Year 2009/10, employees will pick up 0.453%. (Employees agreed to pick-up the 0.453% retirement contribution increase for FY2009/10 as part of the interim agreement).
Notice that the agreement here is to pick up a portion of the <i>employee</i> portion of the PERS payment.
Writes the city in the press release sent out on Friday afternoon:
“One of the City’s Council’s objectives during the negotiation process was to explore differential compensation packages for future employees. Included in the MOU for the PASEA is language that acknowledges the City’s intention to implement a reduced second-tier retirement benefit for new employees, as early as July 1, 2010. The City expects to engage in discussions with other cities within the region which have an interest in implementing standardized, sustainable retirement plans for their local government employees. The City anticipates taking steps to establish a reduced retirement benefit formula, with minimum required employee contributions, for all new-non-safety employees during the term of the contract.”
Retiree Medical Benefits:
The contract proposes to implement the standard CalPERS vesting for current and future employees for retiree medical benefits. Once an employee has ten years of service with a PERS agency or agencies, a minimum of five of which must be with the city of Davis, then the employee receives 50% of the benefit level. The percentage paid by the City increases 5% with each year of service after that, until the full benefit is attained at 20 years of service with a CalPERS agency/agencies, at least 5 of which must be with the city of Davis. This benefit is in line with the standard state CalPERS benefit. In addition, benefit levels will be determined based on the employee and their dependents, rather than defaulting to the highest cap amount. Currently, there is no vesting period for retiree medical benefits if an employee is already vested in the CalPERS retirement system. The proposed change allows employees to earn additional retiree medical benefits based on years of service with the city of Davis.
Finally the cafeteria cash-out resembles that of the management group not the firefighters:
The current contract provides a cash payout to any employee not taking the full health insurance allowance. The new contract would cap the cash-out provision for current employees at the 2009 levels for the duration of the contract. New employees hired after the implementation of this contract would receive a maximum cash-out provision of $500 per month. The City and employees will also participate in a cost sharing plan for increases in future health premiums.
City Manager Bill Emlen attached his usual comment to the end of the press release:
“The savings resulting from this negotiated contract will exceed $2 million over three years. These savings are included in a contract that, like the Management group contract passed earlier this month, begins to address several structural issues that will continue to benefit the City and provide guidance for future negotiations,”
My comment is simple, at this point we know the drill, the city is vastly overstating the savings by assuming the salary inflator in the existing contract would have to remain in effect as opposed to a salary freeze. I have never seen it work that way and imagine once again that the city is simply overstating the savings. There is real savings to the city, but we are in a group that represents over 100 employees and is the second largest bargaining unit, so that is to be expected.
At this point, we do not believe that the average employee deserves a worse deal than the management group or the firefighters, so we are not going to raise a huge fuss other than to suggest once again that the city could have done much more this time around and that in three years, we just do not know what things will look like.
—David M. Greenwald reporting
How do furloughs save the city long term. When they end doesn’t salary saved get added back?
Is Bill Emlen offering up 5% of his own pay yet ? Talk about out of touch if he hasn’t !
Word I got is that his salary is tied to whatever the department heads get, so we’ll know when they announce their new contract. 5%? I doubt. No one has taken close to that much of a pay cut in real dollars.
Furloughs do not cost money because the employee is not paid for the days they do not work. If the agency allows the employee to work on a furlough day, and “bank” the furlough day for later time off, the employee is not paid for those “banked” days taken off at a later date.
Who represents the city in these labor negotiations?
Who represents the city in these labor negotiations?
The City Manager and his staff and it’s a big problem but the council majority refused to bring in an outside negotiator, so now you have department heads negotiating with the employees they have to work with on an everyday basis.
The labor contracts alone aren’t the worst part of the Davis city government. Davis has a horrible business climate that drives business elsewhere. Look at the closed stores downtown and the lack of any city program to bring in new businesses. All the City does is bring in Target to drive small businesses away. The City of Davis is beholden to the unions.
Davis hands out money with free services encouraging an influx of people who don’t shop downtown and an exodus of those wealthy enough and mobile enough to move.
You have some of your information wrong; the employees will be picking up 1% of the retirement costs for the FY2010-2011 and an additional 1% in the FY 2011-2012, for a total of 2% of the retirement. This is 2% of the employee’s annual salary. Please keep in mind that city employees do not have social security benefits for retirement.
Also, PASEA members have already had 5 months of furlough days–July 2009 through November 2009. The 7 days in the contract are in addition to these for a total of 12 days for the year.