The agreements — with the Tracy Firefighters Association, Midmanagers Bargaining Group, Confidential Midmanagers Bargaining Group, Technical Services and Support Unit, Limited Service Employee Group and department heads — apply to 186 full-time employees and 18 part-timers.
The agreement with the part-time workers, which entailed no changes, was passed unanimously. All others were approved 4-1, with Councilman Bob Elliott dissenting.
According to statistics
provided by City Manager Leon Churchill, the contracts should knock $695,000 off the city’s general fund liability by the 2014-15 fiscal year. The recently passed 2012-13 budget includes a $2.2 million general fund deficit.
Savings will be achieved by having employees pay the employee share of the contribution to the California Public Employee Retirement System. Employees also agreed to a freeze in cost-of-living and equity raises and a second-tier pension plan for workers hired in the future.
In exchange, the city agreed to end three years of unpaid furloughs while putting money into “flex leave” that Churchill said would “take the sticker shock” out of the PERS concessions. The seven department heads were also given 40 days of paid leave time.
But Churchill said the more important point was that the agreements could lead to bigger savings for fiscal year 2015-16 — the same year the city will lose an estimated $6.5 million in general fund revenue because of the expiration of the Measure E sales tax increase, passed by voters in 2010.
If employees of the six bargaining groups addressed Tuesday continue paying their share of PERS but the flex leave is dropped, as Churchill’s report foresees, Tracy stands to save $1.7 million in 2015-16. If all city employees agree to a similar plan, Churchill estimates $3.4 million in savings for 2015-16.
Churchill called Tuesday’s council decision a concrete step toward erasing the city’s chronic general fund deficit, which is estimated at $2.2 million in fiscal year 2012-13 and could reach $8 million in 2015-16 if the city took no further action, according to Finance Director Zane Johnston.
Churchill cautioned that while the contracts were a vital part of the city’s eight-step plan to balance the budget, the city would keep pursuing “other alternatives to our financial strategy.”
Elliott, who voted against Tuesday’s agreements, suggested the contracts approved by the rest of the council did not go far enough. He implied that the city could have saved far more money if the concessions been adopted while furloughs remained in place.
“I just think it’s a missed opportunity here to get us closer to a balanced budget,” said Elliott, a retired U.S. Army colonel.
Three of the four members of the council who approved the contracts are public safety officers or public safety retirees. Michael Maciel retired from the Tracy Police Department, Steve Abercrombie retired from the Hayward Police Department, and Bob Rickman works for the California Highway Patrol.
Mayor Brent Ives receives a pension from University of California for his 37 years working at Lawrence Livermore National Laboratories.
Maciel said the contracts dealt with the core issues of pension reform.
“We’re not done with our work in this area, but this is a major step,” he said.
Representatives from the Tracy Firefighters Association, Midmanagers Bargaining Group and Confidential Midmanagers Bargaining Group said they appreciated the process and the city’s even treatment of all bargaining units.
TFFA President Dan Havicus, a Tracy Fire Department captain, said the agreements struck “a happy medium” between the city’s financial needs and firefighters’ livelihoods.
“We do believe it is a fair contract,” Havicus said.
Ives said city and union representatives found a balance that suited both sides and worked together instead of attacking each other.
“I’ve been impressed by the fact that we all collectively understand the severity of the situation,” Ives said. “Because of that, we tend to be a little more collaborative in our approach to labor agreements.”