Council Speaks Out About Employee Salary Contracts

Days after the approved pension cuts for city employees, Council members discussed the decision making process behind the move with Patch.

The decision followed several months of between the city and its employee unions, which agreed to the cuts under terms outlined in new three-year contracts with the city.

Council members said the unions and the Council came together at a critical moment for the greater good.

"I'm very pleased with the negotiation process and its results," Mayor Pro Tem Robert Harbicht said. "All parties bargained in good faith, recognized the current economic climate, and acted in the best interests of the city. We have enacted true pension reform."

Arcadia city employees hired after Aug. 3 will have to pay the employee contribution, or 9 percent of the pension plan under the California Public Employee Retirement System (CalPERS). The city had previously footed the bill for all employee pension costs.

Annual pensions will no longer be calculated using an employee's single highest salary, but rather his or her average compensation over a three-year period.

However, employees hired before Aug. 3 will receive raises to compensate for money deducted for pension payments. They'll also be eased into the new rules, paying gradually increasing amounts into their pension plan for three years, after which they will be required to pay the full share.

The changes are expected to save the city a significant chunk of change over time, although officials said they could not give an exact amount.

Councilman Peter Amundson said a five-year economic study suggested by Councilman Mickey Segal helped guide union and city negotiators in drawing contracts that would keep the city afloat financially.

Not Without a Struggle

"Armed with that study we knew we needed to change not just the economics, but the structure," Amundson said. "Mickey and I are both businessmen, and it is easy for us to see the disparities between the public and private sector. Nowhere in industry do I see the benefit packages that government employees have, but that is what they bought into when they hired on. It seems only fair that they retain the great benefits but pay their share." 

The agreements did not come without a struggle, however.

The Police Civilian Employees Association nearly reached an impasse with city negotiators until both sides came to terms at an 11th-hour meeting Aug. 12.

, a consultant who represents the during contract talks, made note of Police Chief Bob Guthrie's impact on the floundering negotiations. Guthrie stepped in to prevent an impasse.

"Labor negotiators don't usually like to praise department heads, but I have to give credit where credit is due," Phillips said. "In my opinion, the chief's active role in [the] ... negotiations made all the difference. Without his participation, we wouldn't have a new contract. Period."

Guthrie was out of the office and unavailable for comment.

"I'm pleased that the City and the APCEA were able to reach an agreement," said. "It will allow the city ... to be able to conduct more thorough long-range financial planning because we will be able to more accurately estimate our personnel costs, which comprise 78 percent of our general-fund budget."  

"I appreciate the work of the APCEA and our city negotiating team ... [in] reaching agreements that allow the city to rein in pension costs over the long term, yet address current employee needs and the commitments the city has made to our employees," he added.