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City approves changes to employee pension plan

By Staff | Dec 22, 2010

After more than a year of negotiations and following an impasse that was declared six months ago, the City of Sanibel and members of the American Federation of State, County and Municipal Employees Local 3228 — representing 67 city employees — settled their dispute over changes to the employees’ pension plan.

In early November, Special Magistrate Irving Rosenbaum, appointed by the State of Florida, issued recommendations on a number of changes to the plan. The magistrate made his recommendations after reviewing city finances, the specifics of the current pension plan and all proposals for change to the plan.

However, the city notified the State of Florida Public Employees Relations Commission on Nov. 22 that they had filed an official notice to reject Rosenbaum’s recommendations, which prompted last Wednesday’s special meeting.

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.

During the meeting on Dec. 15, during which public comment was not allowed, the agenda called for the city to make its recommendations, followed by the presentation from the union employees, represented by attorney Marc A. Sugerman and Roy Gibson, a member of the city’s Planning Department and spokesperson for the affected employees (members of AFSCME). Both sides were allotted 30 minutes to deliver their presentations, followed by a five minute period for rebuttals.

City Manager Judie Zimomra, who is among the city employees affected by the pension contract, told the council that making changes to the plan now was the first step in an overall strategy of achieving long-term financial stability for the city.

“All of our employees are hard working, well trained and dedicated to their duties,” said Zimomra. “If I did not belive that there was a need to make changes to the pension plan, I wouldn’t be here today.”

Zimomra also stated that her three goals were to protect the city’s reserves, reduce fixed costs and lower overall debt.

Gibson said during his presentation that he believed that political influence coming from the council prevented Zimomra from coming to an agreement with the union.

“I think it’s a sad day when we have to have an attorney represent our city’s employees,” said Gibson, who noted that in previous negotiations the matter had been resolved solely with the city manager and union representative. He also claimed it was unfair not to allow public comment during the meeting.

“Is furthering your political agenda more important than doing the right thing?” Gibson asked, adding that the ongoing impasse has damaged Zimomra’s integrity and respect among her fellow employees.

He stated that the city is in the best financial condition it has ever been in and questioned why a budget review committee had not been assembled for a complete and unbiased review of the facts associated with the negotiations.

“Let’s get back to working together, not against each other,” Gibson said.

Prior to last week’s meeting, 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.

Peter Pappas asked Gibson why the union would agree to conduct a special meeting on Dec. 15 if it knew that their representative would be absent. According to Gibson, he did request a date change but did not receive any response.

“Do you believe that the absence of your representative would do damage to your position today?” Pappas asked Gibson, who declared the situation a “major disadvantage.”

Pappas later stated that the City Council does have “a capacity for objectivity.”

Vice Mayor Mick Denham took offense that Gibson implied during his presentation that the pension plan changes suggested by the special magistrate were rejected because of a “political agenda.”

“Quite frankly, this council has worked very hard for the last four or five years on our finances,” said Denham.

“I will always support the employees of the City of Sanibel,” added fellow councilman Marty Harrity, “but I have to do the best job that I can to spend taxpayers’ money as wisely as possible.”

Mayor Kevin Ruane, a member of the City Employees Pension Board for the past 15 months, said that the changes were being made due to fears of further staff cutbacks.

“Roy, I’m looking at you right in the face,” Ruane told Gibson. “This is not political.”

The mayor went on to say that growing up in a family where everything was about numbers, “The concerns that I have about this are purely business.”

Ruane said that the main issue was “purely a difference of opinion” about the severity of the city’s financial health, while Pappas noted that he “could not accept” certain assumptions made by the magistrate.

“This pension plan, as it stands today, is not sustainable,” he added.

Denham made a motion to accept Zimomra’s recommended changes to the plan, which was seconded by Harrity. Pappas’ suggestion of lowering the pension plan multiplier to 2 percent, down from 3 percent, received no support. The union had proposed it being lowered to 2.5 percent, but Zimomra’s proposal called for it to be further lowered to 1.68 percent.

Councilman Jim Jennings suggested that employee contributions to the plan remain at 5 percent, rather than Zimomra’s proposed 6 percent. His fellow councilmen agreed and unanimously approved the resolution.

The final ordinance is anticipated to be introduced on Jan. 4, adopted on Feb. 1 and become effective on April 1.