A leading voice on pension reform blasted Downey’s renegotiated contract with its firefighters.
The Downey City Council at Tuesday’s meeting cast a 4-1 vote regarding a two-tiered pension for its firefighters. The vote allows the city to notify the state’s pension system of the deal. Councilman Mario Guerra cast the dissenting vote.
Downey’s firefighters currently are able to retire at age 50 and get 3 percent of their pay for every year they work for the city. In addition, the city picks up the 9-percent payment firefighters are hypothetically supposed to put toward retirement costs.
Under a proposed change, new firefighters won’t get their full pensions until age 55, and they will have to pay the full 9-percent employee contribution. Nothing will change for the city’s current firefighters.
The head of a pension reform group said such deals leave taxpayers on the hook for employee salaries long after employees retire.
“It’s nothing. It’s fake,” said said Marcia Fritz, director of the California Foundation For Fiscal Responsibility. “It will do nothing for Downey’s current fiscal situation.”
Other cities made far more drastic cuts to pension plans.
Long Beach’s firemen last week agreed to a contract that gives new hires get a 2-percent at 50 pension, according to LBreport.com. And Long Beach’s current firefighters will have to pay their entire 9-percent employee contribution.
Fritz said voters are fed up with politicians who won’t take a hard stand against retirement benefits.
“The sad part is that these politicians will probably claim they did these great pension reforms next time they have a campaign,” she said. “That’s why I think a lot of people want to do an initiative that will change things, because politicians don’t have the guts to do it themselves.”
Due to the economic collapse in 2008, cities have slashed staffs. El Monte laid off more than 100 employees and closed a fire station.
In Downey’s case, the city hasn’t had to do mass layoffs or take other emergency measures.
Downey had a $30 million reserve when the economy crashed, and it hasn’t spent much of its savings since, Councilman David Gafin said.
“There’s less staff now, but that’s mainly through attrition,” he said. “We haven’t went through any type of big pink slip process. Prior councils were very wise. When they did have profitable years, they put the money away.”
Gafin said the firefighters got a “good deal,” but said the union negotiated in good faith and gave up long-standing benefits.
“I feel it went very well,” he said. “I wouldn’t say it was contentious by any means. We all know pension reform is a very hot subject. This is bringing it a little bit back in line after it got out of hand for cities across the state.”
For his part, Guerra said Fritz was right.
He voted against every employee contract that came before the council during the last three months.
“I think our deals are all very generous,” he said. “Later on, when we have to have cutbacks, it will be because we didn’t take care of complete business.”
While the city’s sales tax is up 19 percent compared to last year, property taxes are plummeting, he said.
“Next year, or the next two years, we’re going to find out we can’t keep going at this level,” he said. “This is wrong. It’s just wrong.”