Pension costs and hybrid model concerns nearly halt approval of 4-year Ypsilanti police contract
Ypsilanti City Council members' concerns about rising pension costs and the creation of a hybrid public safety department resulted in two votes and a lengthy closed session Tuesday prior to the approval of the Police Officers Association of Michigan contract.
The Ypsilanti City Council approved the police officers contract with several changes for employees.
Steve Pepple | AnnArbor.com
Council Member Pete Murdock said the pension system is "bankrupting the city" and Council Member Susan Moeller said many citizens within her ward do not support the creation of a hybrid police and fire department model.
Council originally voted Tuesday night 3-3 to not approve the contract. Members Brian Robb, Moeller, and Murdock voted against it and mayor Paul Schreiber, Council Member Ricky Jefferson and Mayor Pro Tem Lois Richardson voted in favor of it. Daniel Vogt was absent.
Despite the raised concerns, council went into closed session around 9:45 p.m. to discuss the contract further and emerged at 11:15 p.m., where Murdock moved to reconsider the contract. The vote to reconsider was 5-1, with Moeller voting against it. The second vote on the police union contract passed 4-2, with Robb and Moeller voting no.
The four-year contract is effective July 1, 2012 through June 30, 2016. The last contract expired last year.
Moeller said she voted against the contract because it contained elements of the hybrid safety model and no raises for four years for police, which she doesn't agree with.
"I appreciate that the union supported and voted for it, however I'm not going to vote for it," Moeller said. "The reason is because the public safety issue is in the contract and many citizens are against the PSO... The fact that there's no raise for for four years for police officers, it's not their fault we have Water Street debt... I don't believe police and fire should be forced to pay for mistakes that were created on this council."
POAM President Robert Peto said the contract needed to be approved in order for the department to become sustainable again. Peto, who was initially reluctant toward the hybrid department, said the union agreed upon it with one critical stipulation.
"Has our workload dropped?" Peto said. "No. Has it increased? Astronomically. We offered to take on a career that we did not choose. We said yes, we showed interest, under one stipulation. I said this from the beginning, I was one of the most reluctanct officers you’ll ever see against public safety. The stipulation was that it would not affect anyone under the roof of the fire department right now. If someone new comes in, they can be cross trained and they’re not going to know the difference. We worked through that."
Pito said the negotiations have been tough and long, but the union cooperated during the process and made several concessions in an effort to move the city toward financial solvency.
"We are strong as a police officers department," Peto said. "We are not strong enough to carry the weight on our backs of the entire city... We just want to keep the place afloat in light of financial considerations."
The contract states that "the parties agree that the city, at its sole discretion, may create the classification of public safety officer." A major component the city sought to complete was to include the necessary language that would allow the POAM union to incorporate the position of public safety officer into their union.
Ypsilanti POAM President Robert Peto addressed city council Tuesday night.
Katrease Stafford | AnnArbor.com
In the event that the city elects to create the classification of a public safety officers, unit members who become PSO's will receive seven percent above the police officer wage scale.
Robb said council needed to take the opportunity to address the city's pension costs.
"This is a bad contract for one because it doesn't deal enough on the pensions," Robb said. "The fact that we're not capping it now, it's a big mistake. This is unbelievably important to us."
Schreiber urged the other council members to reconsider their votes, saying the city needed to act fast in order to maintain service levels.
"We have our police officers and firefighters and they are understaffed and overstressed," Schreiber said. "If we’re going to protect our citizens, we have to do something about it. We can't go on the way we have... I think this will move us forward. It's not perfect, but I'm going to support it."
Key elements of the contract for current employees as of July 1, 2012:
- The four-year contract allows for no increase in wages for existing employees. The city and union have been in negotiations for more than 10 months.
- The 18 current members of the POAM will receive a one-time $500 signing bonus after the contract is ratified by all parties.
- The contract addresses the overtime issue within the department. The POAM road patrol works 104 hours of overtime per year. All POAM officers will receive a one-time lump sum payment each April 1st for $1,500 starting April 13. However, the overtime adjustment bonus will not be paid to employees hired after July 1, 2012 until they reach a certain pay classification.
- Existing employees will will be allowed to bid up to four weeks of vacation time. Five weeks of vacation time will be restored on Jan. 1, 2015.
- Pensions will be kept at a three percent multiplier and employee contribution is at 10 percent
- Current employees will receive a maximum pension that is 90 percent of their final average of compensation.
Click below for the proposed benefits for new hires effective July 1, 2012 and for a wage scale of police officers and public safety officers:
Katrease Stafford covers Ypsilanti for AnnArbor.com.Reach her at katreasestafford@annarbor.com or 734-623-2548 and follow her on twitter.
Comments
Solitude
Wed, Apr 24, 2013 : 11:50 p.m.
"Council Member Pete Murdock said the pension system is "bankrupting the city..." No, Mr. Murdock. Water Street debt obligation is bankrupting the city. You can deflect and deny all you want, but it doesn't change the truth.
TK2013
Thu, Apr 25, 2013 : 11:58 a.m.
You hit the nail on the head, Solitude.
FireTimes
Wed, Apr 24, 2013 : 5:54 p.m.
"A major component the city sought to complete was to include the necessary language that would allow the POAM union to incorporate the position of public safety officer into their union." And there it is. Nice to see it actually in print that the main motivation for POAM in backdooring other units of Public Safety is to grow their own numbers. Sickening.
Solitude
Thu, Apr 25, 2013 : 1:23 a.m.
So you're making accusations about a local bargaining unit with no knowledge of the local situation. Great. I won't waste any more time here, except to point out that in this case, in Ypsilanti, as you quote from the article, it was the CITY that sought the language, not the POAM.
FireTimes
Thu, Apr 25, 2013 : 12:16 a.m.
For the record, I don't work in Ypsilanti. Assume much? So is my stance still "unfounded" or is it just easier to say that your bubble only exists within the Ypsilanti area and ignorance is bliss, or supposed knowledge in this case?
Solitude
Wed, Apr 24, 2013 : 11:30 p.m.
The fact that you think someone needs to "report" your posts would be funny if it wasn't so paranoid. I've never "reported" anyone's posts. I'm not the moderator here; if it were up to me, nobody's posts would be deleted, so don't flatter yourself. As for what the POAM or any other union is doing on a state or national level, I have no idea. I'm talking about Ypsilanti. Your own city council says YFD has refused to talk. You tell me how that's working out for you so far. You don't want to talk, and you don't want anyone else to either. How responsible, mature and professional. Keep up the good work.
FireTimes
Wed, Apr 24, 2013 : 11:14 p.m.
Unfounded? Sure, I'll play. 1. Why has the POAM approched all of their units they represent about at least looking into the feasibility of taking over fire services for the areas that the serve now? (It's nice to hear the inner workings of this stuff with three relatives in the Police Service, sickened by this type of action BTW) 2. If the Fraternal Order of Police (FOP) is not using the same tactics, and is against PSO as a non-working idea, what is POAM's motivations for pushing this agenda if not a grab of the available budget dollars and increased membership? They just want to wear turnout gear? 3. How many Police Operations has the MPFFU or Fire Departments in general tried to take over statewide? 4. To make a their opposed stance known, did the POAM members agree to take the Firefighter Program and EMS Certification without any overtime pay? That's a topic subject to bargaining, and would definitely make their stance known. But the poor things just had to settle a contract! And your right on me not being able to say what I really want. It keeps violating the guidelines. Quit reporting my posts and you'll be able to read it.
Solitude
Wed, Apr 24, 2013 : 10:18 p.m.
Type...should have been "unfounded," not "unfunded."
Solitude
Wed, Apr 24, 2013 : 10:08 p.m.
Great, but that's not what you said. What you posted was unfunded and accusatory attack on fellow public safety employees, who also can not "prevent anything," namely the creation of a public safety dept. if that's the direction the city decides to go. All they did was settle a contract and have the sense, and professionalism, to not cut off their noses in spite over something that's meaningless. As has been pointed out, refusing to settle a contract, or even negotiate, isn't going to stop the city from doing whatever it wants to. The article points out that even the POAM union president isn't all excited about the idea of hybrid public safety either, and they certainly don't have to support it to get more cops. It's quite apparent they are going to get some bodies either way. You then accuse people of "power and member grabs." That's amusing. What power is being grabbed here? Who's stopping firefighters from shaping their own destiny here?
FireTimes
Wed, Apr 24, 2013 : 8:53 p.m.
Try this again. Actually you are not even remotely close to my position. But I will state clearly my position on this so you don't get confused; The creation of a Public Safety Department is not "meaningful progress". Not even "progress". And a Fire Union cannot prevent anything, at least not in this State with the laws skewed against them. But they can point out bad ideas, smokescreens, power and member grabs, and flawed thinking.
Solitude
Wed, Apr 24, 2013 : 7:14 p.m.
So your position then is that the fire union should be able to prevent meaningful progress not only for themselves, but for everyone else too? Your post is long on mindless hostility and short on sense. IF a public safety dept. is created, and IF it involves police officers cross-trained for fire duty, and IF they couldn't join the existing POAM bargaining unit, then they could simply work as non-union employees in this right-to-work state, or they could form their own bargaining unit. If YFD wants the freedom to pursue mindless obstructionism, they should be equally ok with those who choose something else.
Pete Murdock
Wed, Apr 24, 2013 : 5:25 p.m.
What I was concerned with is the pension and retirement health care costs of the existing retirees and employees. The City's annual contribution for Police and Fire retiree health care of ~$1M annually continues to climb at 10 to 15% annually. These costs are for actual retired employees. The pension costs of ~$1.25M annually are projected to increase $100-$125K a year into the foreseeable future according to the most recent Police and Fire Pension report. All the existing employees have the higher pensions and health care benefits when they retire and most of them will live 30 years after they retire. The financial impact of the new employees won't be seen until they retire in 25 years. Just plain and simple some adjustments have to be made. That's why we unanimously directed the administration to provide a cost benefit analysis and overview of converting to or changing to defined contribution plans and options to consolidate retiree health care plans into a single plan or otherwise achieve cost savings in existing retiree health care costs.
TK2013
Wed, Apr 24, 2013 : 6:26 p.m.
According to Mr. Robb, the command officer's union agreed to several provisions in their most current contract that limited or capped future pension costs. Why did you not simply negotiate the same language into the new police officer's union contract? I don't get it.
Solitude
Wed, Apr 24, 2013 : 1:59 p.m.
Murdock says the pension system is bankrupting the city, but he's unhappy with a contract that, according to the "New employee benefits" attachment to the article, completely eliminates retiree health care coverage, eliminates the "annuity" pension payout option, reduces the multiplier to 2% and raises the number of years to retirement to 25? This makes him unhappy? The attachment also indicates the contract eliminates vision coverage for new-hires and raises the employee-paid health care insurance premiums to 25% and 30%.
TK2013
Wed, Apr 24, 2013 : 1:52 p.m.
I could be wrong, but didn't the Police Department command staff union and the city council approve a new contract about a year ago that contained provisions to control future pension costs? If so, how can the city justify this contract with the police officer's union? Don't get me wrong, I support ALL of our police and fire department employees 100%. I just don't understand the inconsistent treatment. Perhaps Ms. Stafford would investigate and provide additional information? The lack of respectable treatment by the city council and city administration towards our police officers and firefighters is shameful! Time for a new city manager already?
Solitude
Wed, Apr 24, 2013 : 6 p.m.
With all due respect Mr. Robb, you state that what I said about the city not making pension payments when the fund was experiencing higher than average returns due to the stock market boom is false, then you say the city did not make payments from 2001 thru 2003. Perhaps the fact that the fund was overfunded meant that the city was not mandated to make payments, but that fact remains that the city elected not to do so. The city chose to redirect millions and now wants to have it both ways. Is it too much to ask that city council members be able to see the forest for the trees? Did it not occur to a single person that the stock market is volatile? It wouldn't be much of an issue if the city, having made the choices it did, was not now trying to foist responsibility for those choices onto a group of employees who can't take back the work they've already done, like you want to "take back" the pensions they've already earned.
Brian Robb
Wed, Apr 24, 2013 : 4:10 p.m.
The percentage that I'm speaking about it percentage of salary. It has nothing to do with number of employees. In 1995, the City's contribution rate to the pension was 13.55% on a total salary value of $3.33M. In 2012, the City's contribution rate to the pension was 36.51% on a total salary value of $3.41M. While the there are fewer employees, the salary for 1995 and 2012 are very similar. As far as your claims about the City not making "mandatory" payments, that too, is false. The City did not make payments to the Fire & Police pension from 2001-2003 because it was overfunded to the tune of 128%. To put that in perspective, the Fire & Police pension is currently 66% funded with almost $15M worth of unfunded liabilities. This is why your tax bill will show 9 mils for the Fire & Police pension when you get it this summer.
TK2013
Wed, Apr 24, 2013 : 2:47 p.m.
Thanks for the response, Mr. Robb. I am now simply baffled as to why the city administration failed to negotiate the same provisions. Good luck with your next negotiations with the command union after sticking it to them!
Solitude
Wed, Apr 24, 2013 : 2:38 p.m.
It would appear that city council members are conveniently forgetting all those years when the pension plan was hauling in double-digit annual returns, and the city was spending the money that was earmarked for its "mandatory" contributions to the pension plan on other things. The city's percentage of payroll is increasing because the number of employees has been drastically reduced in the last couple years, correct? So the payroll, and therefore the number of employees paying in, is reduced, right?
Brian Robb
Wed, Apr 24, 2013 : 2:24 p.m.
You are absolutely correct. The 2012 COAM contract had a 2% pension multiplier for new hires and capped the City's contribution to the pension at 16.2% of payroll. To put that in perspective, the City just received its annual valuation of the Fire & Police pension. For FYE 2012, the City's contribution was 36.51% of payroll.
Solitude
Wed, Apr 24, 2013 : 1:45 p.m.
I also don't understand why Moeller would vote no based on the raise issue. The fact that the contract doesn't include raises doesn't mean the city can't offer raises if/when the city's financial situation allows them. How about some leadership, or at least some consistency, from these council members. They spend the last couple years railing against public safety costs, and thereby their own employees, and now, when the employees have agreed to a longer-term contract with no raises, to help contain costs, etc., some of them are still complaining.. What exactly do they want?
Solitude
Wed, Apr 24, 2013 : 1:38 p.m.
"The contract addresses the overtime issue within the department. The POAM road patrol works 104 hours of overtime per year. All POAM officers will receive a one-time lump sum payment each April 1st for $1,500 starting April 13. However, the overtime adjustment bonus will not be paid to employees hired after July 1, 2012 until they reach a certain pay classification." The wording of the above is somewhat misleading. I believe it should say that the contract addresses the "unpaid" OT issue within the department. According to friends that work there, the road patrol currently, and for many years, works 104 hours of OT that is uncompensated, as a part of their mandatory work schedule, in addition to whatever OT they work that they get paid for. They work 84 hours in a two-week pay period and get paid for 80 (4 hours unpaid every two weeks x 26 pay-periods = 104 hrs). This is been the case for many years, and this appears to be what the $1,500 payment is being created to address. Ms. Stafford, perhaps you could confirm this. I'm impressed with the professionalism and the concern for the city as a whole being displayed by the various members of YPD as a whole, including the POAM, the command staff and the chief. Too bad the city council can't get their act together. I fail to see how Moeller or any other councilmember can use the hybrid public safety issue as an excuse to vote against the contract. It doesn't appear the contract mandates the creation of a hybrid department, it sounds like it just contains language to accommodate it if it comes to be. What's the problem with that?
Brian Robb
Wed, Apr 24, 2013 : 2:27 p.m.
The lump-sum payment was in lieu of a raise (which is not used in calculating FAC). It was not used to avoid what you are trying to suggest.
TK2013
Wed, Apr 24, 2013 : 2:15 p.m.
Why then, Mr. Robb, is the city manager able to keep his grossly overcompensated job? He reports directly to you, correct? But, then again, so does the city clerk and she was able to keep her job despite being unable to competently administer a simple election.
Solitude
Wed, Apr 24, 2013 : 2:13 p.m.
Mr. Robb, since you are here, please clarify something else. You posted that the $1,500 payout was put in to avoid having the pay for 4 hours of each pay-period impact an employee's final average compensation? If this is the case, this appears to be quite a generous concession on behalf of the POAM. If they are each working 84 hours per pay-period, why shouldn't their final average compensation reflect this? How much farther can your employees bend over backward to assist the city?
Solitude
Wed, Apr 24, 2013 : 2:08 p.m.
Well Mr. Robb, since there's no indication of any language in the subsequent contracts addressing the subject, and the federal Fair Labor Standards Act rules and other court cases clearly prohibit both management and labor from agreeing to bargain away the rights of current or future employees to compensation as outlined the Act, I'd say the $1,500 is quite a bit less expensive than paying the lawyers.
Brian Robb
Wed, Apr 24, 2013 : 1:58 p.m.
When the YPD went from 8 hour shifts to 12 hour shifts way back in the 1980s, the issue of the 104 hours of unpaid overtime was resolved then by adjusting wages. There isn't a single person in the police department who was working for the City back when the change took place. CM Murdock and his vast amount of historical knowledge on the issue made that very clear to everyone involved -- including the City Manager. The City Manager's insistence on calling this $1,500 lump-sum payment for overtime adjustment is absolutely misleading and confuses the issue. The lump-sum payment was given in lieu of a raise so that it didn't impact their FAC (final average compensation) which is used to calculate pensions.
RFD
Wed, Apr 24, 2013 : 1:19 p.m.
I find it very puzzling that the chatter and postings are always conspicuously silent in response to the very serious issues concerning our police and fire fighters. Those men and women who put their lives on the line every day in the effort to keep our community safe, as the crime rate increases. Seems like each morning when I click on A2.com, I'm wondering what crime,break in, mugging etc will have been committed the night before. Our officers are dealing with this, as their numbers and resources decline. This community that I love and where I have lived for the past 30 years, is changing. Not all changes, admittedly are bad. But we need to do more to support our officers and fire fighter, who are one of the most significant resources to the future of our city. Why are we citizens not more vocal? Could the silence be because when we had the opportunity to create some change by voting for resources that were so desperately needed we voted to do nothing? Looks like we are seeing those decisions play out. Are we content with the results? Where do we go from here?
nekm1
Wed, Apr 24, 2013 : 1:01 p.m.
Here is the problem. Would someone please address it? "Pensions will be kept at a three percent multiplier and employee contribution is at 10 percent Current employees will receive a maximum pension that is 90 percent of their final average of compensation." Pay a better salary on the front end, and stop with the pensions. Create 401k's like everyone else.
Solitude
Wed, Apr 24, 2013 : 3:57 p.m.
A "maximum" pension is not the same thing as an average pension. Just because it could be up to 90% doesn't mean the majority of individuals will be eligible for anything close to that. To get even close to 90%, a person would have to never take a vacation day and never take a sick day in 25 years, just to start.
Megan Turf
Wed, Apr 24, 2013 : 3:10 p.m.
Especially when many of the officers can make close to or over $80k when you include overtime. Lieutenants are close to 100k. That's incredibly unsustainable. I agree, switch to 401 and 403ks instead.
Katrease Stafford
Wed, Apr 24, 2013 : 2:46 p.m.
The contract information in my article came directly from the resolution that was passed by council. When I receive the entire contract, I'll be sure to do a separate post or post it here, since it has a lot more information in it than what was provided last night at the meeting.
nekm1
Wed, Apr 24, 2013 : 2:26 p.m.
The quote came from the article above. What does the writer have wrong? Paying someone 90% of their current salary for 20 or 30 years is unsustainable! Do the math on how much that "pot" of money would have to be to make this happen!
TK2013
Wed, Apr 24, 2013 : 1:59 p.m.
Your "facts" are simply wrong. I recommend you familiarize yourself with the actual pension rules/laws before posting false information.
Katrease Stafford
Wed, Apr 24, 2013 : 11:53 a.m.
Council did pass a resolution for staff to do an analysis on converting the city's defined benefit retirement plans to defined contribution plans.
Hugh Giariola
Wed, Apr 24, 2013 : 11:41 a.m.
No one wants to deal with unsustainable pension costs. I certainly hope the city is ending this practice and placing new hires on a defined contribution plan like 99% of the workforce today.
Tom Todd
Wed, Apr 24, 2013 : 10:30 a.m.
Tough Job keep up the good work.