A sharply divided Santa Rosa City Council approved a new two-year police union contract on Tuesday characterized by some as an important step toward pension overhaul and by others as far from the restructuring needed to save the city from financial peril.
The council voted 4-3 in favor of the contract, which establishes lower pension benefits for new officers, gets current ones to pay more toward their pension, and gives them raises to cover most of those costs.
The majority of council members praised the officers for stepping forward and welcomed the contract changes, but also acknowledged that some of their fellow council members and members of the public might be impatient for more sweeping changes.
"I know it's not big enough, it's not fast enough, it's not good enough," said Councilman Jake Ours. "But it's what we can do, and I think we have to be realistic about this."
But Councilman Gary Wysocky blasted the savings as "minuscule" compared to the more than $100 million in unfunded pension costs the city faces.
"I can appreciate they came in good faith, but they don't come anywhere close to solving our financial problems," Wysocky said of the changes. "That's just a fact. I wish it were different."
He said the "structure" in place in the city at the moment "leads right towards Stockton and Vallejo, a reference to one city on the verge of bankruptcy and another that just emerged from it.
Voting in favor were Ours, Mayor Ernesto Olivares, Vice Mayor John Sawyer and Scott Bartley. Opposed were Wysocky, Marsha Vas Dupre and Susan Gorin.
The city announced nearly two weeks ago that it had struck pension overhaul deals with its police and fire unions. Discussion of an amendment to the fire contract was postponed pending additional financial analysis.
That left the council to consider just the new contract for the city's 141 police officers.
The officers agreed to establish what is known as a "second tier" of pension benefits for new hires beginning July 1, 2012. Currently, police officers can retire at age 50 with 90 percent of their salary for life if they've put in 30years of service. That age will be pushed back to 55 for new hires.
In addition, new hires will have their future pensions calculated on a somewhat less generous formula. Instead of using the single highest salary, which is usually the final year of service, pensions for future workers will be based on the average of their final three years for service.
Though often referred to as an "anti-spiking" provision, the city's actuary, John Bartel, said that's not really an apt term because the state pension system that administers the city's pensions, CalPERS, keeps a close eye out for unusual final-year pay spikes, he said.
In addition, officers have agreed to pay the equivalent of 9percent of their salary that the city had been paying on their behalf, contributions known as Employer Paid Member Contribution, or EPMC. In exchange, the city has agreed to 8-percent salary increases, representing a 1 percent savings for the city.
Chris Sliz, the city's employee relations manager, said that the change also will allow the city to avoid paying 3.5 percent of officers' salary in "reporting costs" to CalPERS.