City, fire union settle on pension changes
Published: Tuesday, November 26, 2013 at 10:05 p.m.
Last Modified: Tuesday, November 26, 2013 at 10:05 p.m.
City administration and the Gainesville fire union have reached an agreement on pension changes intended to stem the city's rising retirement costs.
The fire union was the final employee group the city had left to reach an agreement with in order end a series of negotiations on pension changes that date back to 2011.
Rising costs from retirement contributions have been a cause of financial concern at City Hall in recent years.
The city's contribution has gone from a little more than $4 million in 2006 to about $16.6 million this year.
City administration started working in 2011 for concessions that would slow the rise in costs.
Before the fire union, benefit reductions were already in place for the two police unions, the Regional Transit System union, the Gainesville Regional Utilities union and non-unionized employees.
With the pension concessions in place, the city projects its retirement contributions for the five-year span from 2013 through 2017 will decline by $13.2 million — from an estimated $91.9 million to about $78.7 million, according to information provided by Risk Management Director Steve Varvel.
The projected total savings over 30 years is $267 million.
After two years of talks, city administration had declared an impasse with the fire union in August. But the two sides then reached agreement shortly before non-binding mediation was set to start.
"Somebody asked me if I was happy with it and I said I was satisfied with it. I wouldn't say I was happy," said Tracey Higdon, president of the International Association of Fire Fighters Local 2157. "In the end, the city was able to get what they needed and we protected what we needed to protect."
During negotiations, the city wanted the fire union to agree to the same changes as the police unions. In the end, the fire union agreed to increase firefighters' contributions to their own retirements from 7.5 percent of salary to 9 percent — in order to avoid some benefit reductions.
Perhaps most significantly, the fire union maintained the current cost of living increases to annual retirement payments for both current employees and future hires instead of changes that would have had them working longer to be eligible for annual 2 percent increases and receiving them at an older age.
Like the other agreements, full retirement benefits for future hires will come after 25 years, not the current 20 years.
The multiplier, or percentage of pay a retiree receives for each year of service to determine their benefits, will decline from 2.625 percent to 2.5 percent.
For the last three budget years, the City Commission has approved employee raises but the firefighters have not yet received them because they had to be included in a union contract, Once the new fire union contract is approved, the firefighters will receive a one-time lump sum payment for the 2 percent raises approved for the 2012 budget year. But those raises will not be included in their pay moving forward.
They will receive retroactive 4 percent raises for the 2013 budget year that will be part of their base pay.
For this current budget year, there is a 1.5 percent raise. The firefighters will receive that pay raise but, as Higdon noted, it is exactly the same amount as their increased contributions toward their pensions.
"While it's going to our paychecks, we're not going to see it because it goes back to the pension plan."
The fire union has approved the latest proposed changes and the City Commission gave initial approval last Thursday. A second and final vote on the retirement changes and a vote on the union are expected on Dec. 4.