Leaders Volunteer Maximum Pension Rate(Amended)***
City of Costa Mesa Communication Director Bill Lobdell issued a press release Friday afternoon announcing that the city's top leaders have volunteered to pay 39% of their pension costs. The text of that press release is below:
City of Costa Mesa leaders volunteer to pay 39% of their pension costs, one of the highest employee contributions in the state
COSTA MESA, Calif. - The top leaders for the City of Costa Mesa have volunteered to pay 39% of their pension costs—the highest rate possible—saying they need to set the example of contributing their full retirement share to help insure the city’s finances are sustainable. The employee contribution will be one of the highest in California for public workers.
“We don’t know of any city in the state where public employees are contributing this high of a percentage to their pensions,” Mayor Gary Monahan said. “It makes me very proud that Costa Mesa’s leadership team is leading the way when it comes to pension reform. This is a landmark for Costa Mesa and its residents.”
The move to increase pension contributions will affect eight city executives, including Chief Executive Officer Tom Hatch, Assist. Chief Executive Officer Rick Francis, Economic Development Director Peter Naghavi, Police Chief Tom Gazsi, Finance Director Bobby Young, interim Public Services Director Ernesto Munoz, and interim Development Services Director Khanh Nguyen.
Interim Fire Chief Tom Arnold is not paying into the retirement system and will be unaffected, but his successor will pay his or her full pension share.
The estimated annual taxpayer savings from the increase contributions, including the fire chief’s share, is more than $50,000.
Non-public safety executives are currently paying 31.49% their pension costs. The contribution increase will go into effect as soon as it’s approved by the City Council, likely at its Feb. 7 meeting.
Police Chief Gazsi currently pays 11.61% of his pension costs (as do other Costa Mesa police officers), with the City picking up the remaining 88.39%. Police officers are allowed to pick up 48.633% of the cost of their pensions. Gazsi and CEO Hatch are currently working on a plan to move the police chief toward this maximum contribution level.
When hired, the new fire chief will immediately begin paying 49.32% of the cost of his or her pension, if the City Council approves the increase in employee contributions. Currently, the fire chief would be paying 12.92% of his pension costs, with the City would be picking up the remaining 87.08%).
Recently, due to an expired clause of a labor agreement, Costa Mesa firefighters (excluding battalion chiefs) dropped from paying 12.92% of their pension costs to paying 2.15%. The City now pays 97.85%. In real terms, the firefighters now pay $103,000 annually to their pensions, and the city pays $4.7 million
In recent negotiations, the City has asked the firefighters to pay the 29.92% of their pension costs.
“Our leadership team felt like we couldn’t be asking employees to make their full pension contribution unless we did it first,” said Chief Executive Officer Tom Hatch. “In these times, it was the right thing to do for our City and its residents.”
However, others feel this announcement left out some important details. For example, Jennifer Muir, Communication Director for the Orange County Employee Association, sent this comment in response to the press release: “The true leaders in Costa Mesa, the City’s rank and file employees, have been paying nearly 40 percent of their pension costs for years. And we’re supposed to be celebrating that the City’s leadership is following that great example? I guess it’s better late than never.”
**LOBDELL FIRES BACK
Saturday afternoon Communication Director Bill Lobdell sent me an email refuting the "facts" provided (above) by Jennifer Muir. Here's what he wrote to me:
"Muir is flat out wrong.So, the beat goes on...
1. Until now, all general employees -- managers and rank-and-file -- made the made the exact same contribution. This fiscal year it's 31.5% of the total pension costs.
2. Muir apparently used LAST fiscal year's numbers, when ALL non-safety employees paid about 38% of their pensions. But pension costs went up this year and the employee contributions stayed the same, reducing the percentage paid by employees down to 31.5.
By the way, Muir knew her information was wrong late Friday afternoon because the Register and Voice of OC reporters told her, but I guess she didn't bother to correct it with you.
Only Muir could take what is a positive step forward for the City and is residents and, using false information, twist it into something divisive."
OK, this is it now on this post on this subject. Jennifer Muir read Bill Lobdell's reply and offers the following rebuttal. This will be the last entry on this post on this subject... it's getting too complicated to follow. Anyhow, here's Jennifer's comment from today, Monday, January 30th:
"Bill Lobdell is correct that I was using last year’s PERS rate when I emailed you. I only realized later that the rate had subsequently changed. That said, the employees demonstrated true leadership when they agreed to that contribution level in 2010 – a level that is virtually the same as what executives are agreeing to now. The only reason managers and executives shared the same contribution rate back then is because CMCEA employees led the way by negotiating those contribution levels. I pointed that out to you because it’s deeply disappointing to employees when the City’s media machine consistently fails to acknowledge efforts and sacrifices the rank and file have made these past several years. Plainly, that is what’s been divisive."
NO OUTREACH TO EMPLOYEES
Also missing in this dialogue is that fact that - despite mention being made of recent negotiations with the firefighters - as I understand it, no overture has been made by City management to ANY of the individual bargaining units during the past 12 months requesting a discussion of modifications to the current pension rates. Instead, the elected (and appointed) leaders of the city have chosen to create a hostile, adversarial atmosphere and attempted to violate their own rules by issuing premature layoff notices to nearly half the staff.
A NICE GESTURE, BUT...
While this gesture by the top leaders in the city is certainly noteworthy and is much appreciated, the reported $50,000 savings to the city represents only a drop in the bucket. It is hoped that the City management will actively engage the bargaining units in sincere, meaningful discussions about pension contributions, and do it soon. It is my understanding that each of the individual units would welcome those kind of conversations. I guess we'll see...