Health & Fitness
Pension Reform: Possibility or Pipe Dream?
With the City's largest public employee union refusing to agree to reforms, can Long Beach survive another round of budget cuts?
(The author is a retired, LBPOA-represented city employee)
**UPDATE** (8/22/12)
Find out what's happening in Belmont Shore-Napleswith free, real-time updates from Patch.
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City management has released details of the pension reform proposal that a majority of IAMAW members rejected on 8/16. The release was apparently contingent upon the completion of the voting process which likely means certification of the vote by uniion officials.
Find out what's happening in Belmont Shore-Napleswith free, real-time updates from Patch.
The City offered IAMAW members a 7% raise, 6% of which would be returned to the City to pay for an increased employee pension contribution, bringing that employee obligation to the full 8% hereafter. City management also sought to lower the current pension formula from 2.5% at 55 to 2% at 60 (lower percentage over a greater period of time). Estimates put the City's pension cost savings of that aspect of the proposal at $3.9 million for the first year.
The City would also have agreed to not place pension reform on a ballot and ask voters to decide what the benefit levels should be. One anonymous person who claimed to be an IAMAW member has also claimed that the City had also offered a lump-sum signing bonus but complained that IAMAW never mentioned that alleged aspect of the offer to members duringits presentation before the vote.
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On, Thursday, August 16th, members of Long Beach's largest public employee union, International Association of Machinists and Aerospace Workers (IAMAW, Lodge 1930) voted to reject a City Management-offered pension reform proposal.
Several decades ago, the City's Miscellaneous (meaning "non-safety") Employees agreed to allow IAMAW to represent them during contract talks with city management. IAMAW has done so ever since. The union represents several thousand City employees in non-safety classifications such as Skilled & General, Office and Technical, Protection, and others.
On August 17, the Press Telegram reported that if the City's proposal to IAMAW had been ratified, it could have saved the city's persistently deficit-ridden General Fund almost $4 million in the coming fiscal year. No estimates have as yet been offered for subsequent fiscal years.
Although, as of this writing, neither IAMAW spokespersons nor City Management representatives seem willing to go on record about the specifics of the now-rejected proposal, un-named Press Telegram sources have reported that the proposal was similar to those previously offered to, and accepted by, the city's police and fire unions.
In 2011, in seperate votes, both police officers (the LBPOA represented me in the workplace well and faithfully for over two decades) and firefighters in Long Beach agreed to significant pension reforms which some believe will save the City a cumulative $135.9 million over the next nine years.
Those agreements left IAMAW as the sole major city employee union that had not yet agreed to pension reforms. Apparently, as of August 16th, a majority of IAMAW members still refuse to budge on the issue.
Without knowing the specifics of the City's proposal to IAMAW, it is difficult to make a critical assessment as to its reasonableness. When/if an authorized spokesman for either side releases the details, Patch will attempt to update this column with that information.
It seems almost counterintuitive to consider that IAMAW will continue to refuse to make concesssions on this very challenging issue. Perhaps a majority of the members who voted to reject this latest offer truly believe that they should get more for what they will be giving. Perhaps they simply want to hold city management to the terms agreed to during the last contract talks and aren't willing to make any additional changes before their current contract actually expires on September 30, 2013*.
Several California cities have resorted to bankruptcy proceedings in recent years. Mammoth Lakes, Stockton, and San Bernardino have all filed. Each of those cities has cited increasing and unsustainable public employee wage and benefit obligations as contributing greatly to their respective fiscal challenges.
These municipal insolvencies, in turn, have prompted Moody's -one of the nation's top credit rating agencies- to announce a comprehensive review of municipal finances in California. Moody's cites several areas of concern among California cities including a persistently stagnant economy coupled with increased expenses (expenses that include "costly public sector salary and benefits contracts" that had been awarded during better economic times.)
Long Beach Mayor Bob Foster has publicly stated his intent to place the question of pension reform on a ballot if employee labor unions won't make pension concessions on their own. Allowing the voters to decide what sort of benefit package IAMAW-represented employees should receive might prove the only way to make any long-term changes unless those employees reconsider, and soon.
Some in the community are already calling for immediate layoffs of non-essential IAMAW-represented employees to make up for any deficits in the FY12-13 budget. I understand the frustration, but I don't think it is right to attempt to balance the city's entire budget on the backs of some really good folks who, reluctant for reforms or not, are also not entirely responsible for creating Long Beach's fiscal mess.
Even so, former city employee colleagues of mine are again facing layoffs. Good, hard-working, valuable city employees who may lose their jobs where a collective concession on pension reform just might prevent that.
(*The current IAMAW contract was originally approved on May 12, 2008 and was to end on Septermber 30, 2012. On November 20, 2009, the parties agreed to amendments that included extending the contract for one year, to September 30, 2013.)
And what of the spending side of the equation? Over the past several years city management has found ways to cut millions and millions from Long Beach's municipal budget. Virtually every department, including police and fire, has suffered considerable personnel cuts as well as seeing their operational budgets slashed over and over, and yet the General Fund deficits persist.
So what do you think? Should City Management continue to negotiate with IAMAW on the question of pension reform? Should the City declare a contract impasse and impose working conditions upon IAMAW-represented employees without their agreement? Should IAMAW-represented city employees stand fast and allow their contract, as currently amended, to expire before re-opening talks with city management?
I welcome your questions and comments.