City’s pension, health care costs could head to voters
June 10, 2011
SOUTH LAKE TAHOE, Calif. – Rising pension and health costs at the city could give voters the chance to have a say in South Lake Tahoe’s labor negotiations.
On Tuesday, city council members unanimously directed staff to develop a ballot measure to gauge whether the public has a desire to limit what the city spends on employee benefits.
South Lake Tahoe’s pension contributions have risen 327 percent in the past decade, from $1.1 million in 2002-2003 to $4.7 million in 2011-2012. The increases have been caused by CalPERS investment losses, increased benefit offerings and longer life expectancies, according to a staff report from City Attorney Patrick Enright.
Pension costs represent 11 percent of the city’s general fund. Employee health care represents 18 percent of the general fund. Both health care and pension benefits are excepted to rise 5 percent annually during the next five years.
“It’s a situation we have to deal with as a city to be fiscally sustainable,” Enright said.
The city’s recently approved five-year financial plan calls for obtaining $1.5 million in annual concessions from the city’s seven labor groups as part of an effort to close projected annual budget deficits of about $3.4 million during the next five years.
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Whether a ballot measure will make it to voters or if Tuesday’s council direction was simply an effort to further ongoing labor negotiations remains to be seen.
A ballot measure may be necessary, but the city would much prefer to reach the desired savings through negotiations, O’Rourke said.
“We would like nothing more than to resolve this matter without requiring this election,” O’Rourke said.
Moving in the direction of a ballot measure is likely to accelerate negotiations, O’Rourke said.
City Councilman Tom Davis said he would also prefer to negotiate with the labor groups and only go to voters if the needed concessions can’t be met through collective bargaining.
“Let’s meet and confer so we don’t have to get that far,” Davis said.
Director at Public Employees Union Local No. 1 Jere Copeland said he felt the desired savings could be achieved through labor negotiations, noting concessions made by labor groups in recent contract negotiations.
“It’s not like you have bargaining groups who are fighting you tooth and nail to hold these things up,” Copeland said.
Exactly what a ballot measure would like is unknown, but much of the discussion on Tuesday focused on whether the city employee’s should be required to pay employee contributions to CalPERS.
Most city employees, with the exception of police department staff, pay nothing towards CalPERS, Enright said.
Even if a ballot measure was passed by voters, it would only serve as an advisory to the city council and the city’s labor groups.
Collective bargaining laws require good faith negotiations regardless of whether voters pass a ballot measure saying they want to limit employee benefits, Enright said.
He noted the problem of ballooning public benefits is not isolated to South Lake Tahoe.
Numerous cites and throughout the state have recently undertaken some form public employee benefit reform. A statewide ballot measure dealing with pension reform may also be in the works, Enright said.
“There’s no need at this point to point fingers at anybody, we’re all in this situation together,” Enright said.
The deadline for placement of a measure on the November ballot would be July 21. For placement on the February Ballot, the deadline would be Oct. 17.