The Lodi City Council approved a new contract for the mid-managers union Wednesday night, but one councilman did not support the agreement because he feels it does not go far enough to reform city employee pensions.
City staff has been in negotiations for months with nine of the city’s 10 unions because their contracts expired on Jan. 1.
In a 4-1 vote, the council approved a two-year contract with the Lodi Mid-Management Association, which is the first group to reach an agreement with the city.
While he appreciates the employees’ sacrifice, Councilman Bob Johnson said he could not support the contract because he does not believe it goes far enough to address the rising costs of pension.
“I think what we are doing, unfortunately, is nibbling at the problem and taking baby steps, instead of jumping in with both feet,” Johnson said.
Previously, the city paid all of the employee and employer share of pension costs.
In the last round of concessions that went into effect on July 1, the mid-managers union agreed to pay 3.3 percent of the employee pension costs.
The mid-managers will continue to pay 3.3 percent for a year and a half until June 30, 2013 when it will jump to 7 percent.
The group also agreed to reopen the contract to negotiate a two-tier retirement plan of 2 percent at age 60 once the city has reached agreements with the other unions. Currently, all non-public safety employees receive 2 percent at 55.
According to a recent League of California Cities survey, Johnson said that out of 321 California cities, 47 percent have a two-tier system already.
Johnson also said up to 15 percent of the 321 cities require employees to pay the state maximum for employee contributions to pensions — 9 percent for public safety and 7 percent for all other employees.
Councilman Larry Hansen said he understands Johnson’s viewpoint, but he said the two-year contract will give the city time to see if there is pension reform statewide.
“If this thing continues to morph into something where more needs to be done, then at the end of the two years we can open up the negotiations,” he said.
Councilman Alan Nakanishi agreed that the council should pass the contract immediately.
“I think we need to pass this now and see what happens at the state level and other city level,” Nakanishi said.
But Johnson said the city cannot wait for the state to fix the problem.
“It was the legislature that created this morass, and I don’t think they are going to get us out of it,” Johnson said.
The mid-managers union also agreed to 18 unpaid furlough days each during the first year and a half of the contract. Once the union starts paying its full share of the retirement costs, there will no longer be unpaid furloughs.
The city also will restore a 3-percent match to the union’s deferred compensation, which is an optional retirement account similar to a private company’s 401k.
Additionally, the city will not have to increase the city’s contributions for medical costs during the two-year span of the agreement.
Over the next two years, the city will save $369,000 because of the agreement.
Hansen thanked the unit for being the first group to reach an agreement with city leaders.
“Our mid-managers, our supervisors were basically the first to step up to the plate,” he said.