Attorney Michael Mattimore, representing Coral Gables, addresses commissioners during a pension hearing at City Hall. The city and police union have been in lengthy negotiations. Sgt. John Baublitz (bottom right), head of the Gables Fraternal Order of Police Lodge 7, listens to testimony along with fellow officers.
Coral Gables commissioners decided unanimously on Tuesday to reduce pension benefits for some police officers and require a larger annual pension contribution from current officers, saving the taxpayers an estimated $1.9 million per year.
Commissioners imposed the changes on the police union after City Manager Pat Salerno and the union were unable to reach a deal despite 18 months of negotiations.
All officers’ annual pension contributions will increase from 5 to 10 percent of wages. The union had refused to agree to any increase. According to the city, Miami and Miami Beach police already contribute 10 percent of their pay to their pensions, while officers in nearby South Miami pay 15.6 percent.
Meanwhile, officers whose pension benefits have not yet vested — meaning officers with fewer than 10 years of service — will no longer be able to retire on 75 percent of their working pay after 25 years. Instead, they will get a maximum of 67.5 percent after 25 years.
Officers whose pensions already have vested will still get the old benefit.
Sgt. John Baublitz, president of the Coral Gables Fraternal Order of Police Lodge 7, said the reduced benefits will make it harder for the Gables to hire first-rate officers.
“To be honest, what they’ve done to this city and the department and officers is going to have unbelievable detrimental effects to this police department,” he said after the hearing, which featured attorneys and financial expert representation on both sides.
“I’m stunned. This city has money. [City Manager] Pat Salerno has been hiding money in accounts. This was nothing more than punitive. We offered a pension system where they would have been better off if they accepted our offer, but they are not better by cutting 5 percent of salaries.”
But Salerno said the city simply couldn’t afford the more generous pension formula.
“This commission did not create this situation but they have taken the steps necessary to correct it,” he said after the day-long hearing. “What has been resolved at the impasse hearing constitutes reasonable and sustainable wage and pension reform that considers the interest of the Coral Gables taxpayers.”
The subject of pension reform has dominated city discussions nationwide, was a chief element in Mayor Jim Cason’s campaign two years ago. Since 2001, the city’s unfunded pension liability has swelled from $15 million to $235 million. The city’s contributions to pensions have grown 413 percent since 2000.
“When I was campaigning, everyone told me about pensions,” Cason said. “This is crowding out money for investment and roads and other projects. My impression is we have a very generous pension.”
Officers on the new plan will calculate their pension benefit based on their average pay during their last five years of service, rather than three, and overtime pay and unused vacation time won’t be included in the math. Traditionally, officers in many cities make a point of working many overtime hours during their last few years of service as a way to pump up their retirement pay.
Salerno also had proposed that the city no longer pay the police union president a salary for conducting union business on city time. But commissioners opted to keep Baublitz in his current full-time capacity as union president.
“I take offense that I don’t provide a service,” Baublitz said. “I represent 170 officers who are doing a job, and they look to me when we get in trouble. There are many aspects to my job.”
Normally, unionized workers determine their pay and benefits via negotiations between their union and the employer. But in the case of Florida municipal employees, the governing board may impose a settlement when negotiations don’t lead to a contract. The deal lasts only one year, meaning the two sides will soon be back at the negotiating table.
Read more here: http://www.miamiherald.com/2012/09/12/v-print/2999245/gables-imposes-pension-cuts-on.html#storylink=cp.