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City, union settle on new retirement plan

By Staff | Mar 2, 2011

After 18 months of negotiations, the City Council unanimously passed a resolution and adopted an ordinance approving a new labor agreement between the City of Sanibel and American Federation of State, County and Municipal Employees (AFSCME) Local 3228, which represents 67 city employees.

During negotiations, which at times became acrimonious, both parties agreed to several retirement plan elements, including vesting period, normal retirement age, grandfather for early retirement, opt-out of defined benefit plan to participate in defined contribution plan and new hires subject to all new plan provisions.

The council imposed changes to the pension plan include:

• Reducing the multiplier from 3 percent to 1.68 percent for future years of service.

• Maintaining the employee contribution at 5 percent.

• Reducing the cost of living provisions to provide for a 2 percent cost of living after five years of retirement.

• Modifying the early retirement provisions to provide for early retirement at age 60, and an adjustment for early retirement of 5 percent for each year of service under age 65.

Irwin Scarfeld, representing the union, told the council that during past negotiations, both parties had always been able to work out any problems. “We had never even went to an impasse,” he added.

In mid-November 2010, 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.

Rosenbaum had suggested the pension plan multiplier be lowered to 2.5 percent, down from its current 3.0 percent. A suggestion by councilman Peter Pappas to compromise the multiplier being reduced to 2 percent received no support during an earlier session.

Roy Gibson, who assisted with negotiations on behalf of the union throughout the process, requested that the council delay the effective date of the new plan until Oct. 1, 2011 in order to coincide with the start of the fiscal calendar. Stating that he and his fellow city employees have not received any salary increase during the past three years, Gibson reiterated the union’s request that the multiplier by amended to 2 percent.

“Let’s keep politics out of doing what is best for Sanibel,” said Gibson.

During the public comment portion of the meeting, resident Darla Letourneau called the 44 percent reduction of the multiplier “really draconian,” adding that she was concerned for the lack of value of the city’s employees.

“I’m very troubled by this here on Sanibel,” she told the council. “How are we going to be able to recruit and retain our staff?”

Wayne Ponader defended the council, stating, “I have not heard any denigration of our city employees. What I have heard is the collective bargaining process.”

Gibson also read a letter from a fellow employee, not disclosing their name due to some fears of retaliation from the council. Pappas called those fears “silly,” and that he had “floated the idea” of a 2 percent multiplier, which received no support from the council or citizens he had spoken to since.

“We have a responsibility to the taxpayers of this island to spend their money wisely,” added Marty Harrity. “We’re a team, and we have to do what’s right for the team. And that means that we have to tighten our belts a little bit.”

Mayor Kevin Ruane, who said the city’s decision to make the proposed changes to the employees’ retirement package was caused by the economic “pendulum swinging the other way,” said that he and his fellow councilmen needed to alter the previous pension pact as a means of staying fiscally responsible.

“These are challenging times,” he added.

Both resolutions and the ordinance adopting the new general employees retirement plan passed unanimously. The pact will become effective on May 1.