Councilman Bob Rumfelt offered the motion to increase benefits from a 2 percent at age 50 retirement plan to a 3 percent at age 50 plan, as the council and the Lakeport Police Officer Association had agreed to do in 2006. However, no other council member would offer a second, and the motion died.
In 2006, as part of a memorandum of understanding, the council agreed to change the retirement plan in exchange for certain concessions from the police officers association, including having officers take 1 percent per year less for their cost of living increase as compared with other employees, and taking on greater costs for their own health insurance, officials reported Tuesday.
Lakeport City Council minutes show that the memorandum of understanding between the city and the Lakeport Police Officers Association was approved and accepted by a 4-0 vote on Feb. 7, 2006. The document covered the time period from 2006 to 2010.
The agreement was that the city would put the agreement into effect this July 1, according to city Finance Director Janet Tavernier, who took the matter to the council.
The proposed retirement formula calls for giving employees the option, starting at age 50, to retire with 3 percent of their total salary for every year of service, Tavernier's report explained. So an employee who served 20 years would receive 60 percent of their total pay while they were still an active employee.
The plan would increase the city's costs by $73,158.06 for the coming fiscal year, rising from a 28 percent contribution to 38 percent. In the second year, the employer's anticipated contribution will be 39 percent, explained Nick Franceschine, a Sebastopol actuary present to answer questions on the numbers which he said were compiled by a California Public Employees' Retirement System (CalPERS) employee.
City Manager Margaret Silveira said later in the meeting that the proposed 2010-11 fiscal year budget includes the increased retirement plan costs, and two open police officer positions are not being funded.
Rumfelt moved to adopt the resolution of intention, but when Mayor Jim Irwin called for a second, all of the other council members sat silent.
“I have a problem with allowing this city to be billed 38 percent,” said Councilman Ron Bertsch.
Bertsch, who was elected in late 2006, said the majority of the council members who made the decision no longer sit on the council.
Council minutes from the meeting during which the memorandum was approved on Feb. 7, 2006, showed that members at the time included Mayor Ted Mandrones, and Councilmen Bill Knoll, Buzz Bruns, Roy Parmentier and Rumfelt. Rumfelt wasn't present for the vote to approve the document.
“I know the police were promised this and I wish I could second the motion, but I'm up here looking out for the public,” Bertsch said.
Rumfelt, who himself has worked in law enforcement, said he didn't see how they could refuse to pass the resolution, noting the police officers association has held fast to its promises to the city.
City Attorney Steve Brookes said the retirement agreement was a contractual provision entered into after meeting and conferring in good faith with the association.
He suggested that the only rationale the city could use for not moving forward with the resolution is if it is in a fiscal emergency, such as bankruptcy, which is a highly expensive and contested route taken by the city of Vallejo.
With the initial cost to the city only $73,000, Brookes said it is something the city can afford but it may have to make some other trade-offs.
If the city doesn't honor the agreement, Brookes anticipated the police officers association would file a complaint to the Public Employment Relations Board citing unfair labor practice.
The retirement plan change is a concern because it increases costs, which only are easily predictable for two to three years out, he explained.
“So what you're saying is, you could be looking at a train wreck but you can't do anything about it until the train wreck is imminent?” asked Council member Suzanne Lyons.
Brookes told the council that he didn't think a court would say the increased retirement obligation would collapse the city.
Bertsch said they were talking about $73,000 more annually for the next 50 years, while Brookes said after 12 years the cost is supposed to go down.
Bertsch added that the city is spending more this year than it is bringing in and he doesn't want to end up seeing police services contracted out. He said he was hoping that they could work something out with the police officers association since no officers currently are ready to retire.
Brookes said city administration has made overtures to the association, which is standing firm in wanting what it was promised.
“We're bound to, I think, accept the bargain for benefit that they secured back in '05 unless they are willing to take a step back and negotiate something different,” said Brookes, suggesting the city also could declare a fiscal emergency to put it off.
Rumfelt suggested maybe the city should no longer negotiate longterm contracts.
“Hindsight is 20-20,” said Brookes, explaining that the retirement plan formula was thought by agencies across the state to be a good formula to help get good staff.
Councilman Roy Parmentier said he was hoping to put it out a few more years until the city's finances are in better shape, at which point Silveira told the council that the cost already was included in the budget, with the two open police officer positions unfunded.
Tavernier said the actuarial for the plan only is good until Aug. 1, after which the city will have to pay to do another one.
Rumfelt said he believed the council owed it to the association to do what it agreed to do, and to honor its commitments, otherwise the city's reputation would suffer.
He said the city didn't declare a fiscal emergency during the last three or four years, when it instead used furloughs and early retirements to handle its monetary challenges.
“We shouldn't be talking about whether we're going to honor our agreements,” but instead look for ways to pay for them, he said.
Silveira suggested the city can implement a two-tier system, with newer employees not receiving the 3 percent at 50 formula.
Irwin asked fellow council members for proposed motions or direction for staff.
“I don't know how to proceed,” said Bertsch.
He said he had a problem with a previous council agreeing to a contract when it had no idea what the cost would be to the city.
“That's where I stand,” he said.
“That's pretty much where I stand, too,” said Lyons.
Parmentier suggested the the city back off from the proposal and come back with a two-tier plan.
“These guys got to understand, we're not made of money,” he said. “We're in down times. We need some help.”
Based on consensus, Irwin directed staff to call for a special council meeting at 6 p.m. next Tuesday, July 27, and to make contact with the police officers association and ask them to meet.
Rumfelt said the city should be prepared for the association to say it's not willing to take another proposal.
E-mail Elizabeth Larson at
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