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Pension plan recommendations rejected by city

By Staff | Dec 1, 2010

Negotiations between the union representing 67 city employees and the City of Sanibel, declared an impasse more than six months ago, are expected to reach a conclusion in the coming weeks after a special magistrate appointed by the state issued recommendations for changes to the employees’ pension plan.

However, the city has rejected the magistrate’s report and have called a special meeting to discuss the status of the negotiations on Wednesday, Dec. 15 at MacKenzie Hall. The session is scheduled to begin at 3 p.m.

According to Roy Gibson, a member of the city’s Planning Department and spokesperson for the affected employees (members of the American Federation of State, County and Municipal Employees Local 3228), Special Magistrate Irving Rosenbaum, appointed by the State of Florida after the City of Sanibel declared an impasse regarding changes to the employee pension plan on May 4, issued his recommendations for plan changes.

“The employees and the city worked together to provide the magistrate with all of the costs and facts necessary to make this decision,” said Gibson. “Employees have agreed to accept the recommended reduction in benefits that will provide significant cost savings to the pension plan.”

Gibson stated that if Rosenbaum’s recommendations are implemented, the changes will achieve the city’s goal of lowering pension costs. He added that the magistrate recommended specific and detailed changes, finding that, “…these amendments to the Pension Plan can only result in lower pension costs…”

The magistrate made his recommendations after reviewing city finances, the specifics of the current pension plan and all proposals for change to the plan.

“We hope that council will accept and implement the magistrate’s carefully reasoned recommendations,” said Gibson.

However, last week the City of Sanibel notified the State of Florida Public Employees Relations Commission that they filed an official notice to reject Rosenbaum’s recommendations.

Among the reasons the city is disputing the magistrate’s suggestions include the pension plan multiplier being lowered to 2.5 percent (down from its current 3.0 percent), rather than the city’s goal of 1.68 percent; employee contributions remaining at 5 percent, rather than the city’s plan of 6 percent; a cost of living amendment of 2 percent annually after three years of retirement, rather than the city’s modification to five years of retirement; and early retirement eligibility at age 62 with six years of service, or at age 55 with six years of service, rather than the city’s plan of age 60 with six years of service.

The city did agree with the union’s position regarding vesting period increases from five years to six years, grandfathering employees with 17.5 years of service under the current eligibility for normal and/or early retirement as well as a one-time, irrevocable Opt-Out Option to change from a defined benefit plan to a defined contribution plan.

City Manager Judie Zimomra said that although the process has taken more than 18 months to go through, they are nearing the end of the negotiation process and that a deal may be completed before the end of the year.

“We made enhancements to our city employee benefit packages when the economy was healthy and we needed to attract employees to come work for the city,” she said. “Now that the economy has gone in the opposite direction, there are adjustments that need to be made.”

Zimomra explained that once the Dec. 15 hearing is conducted, the City Council must approve and adopt an ordinance of the amended pension plan. Representatives of the AFSCME Local 3228 must also approve the city’s plan following adoption.