The Lodi City Council passed its annual budget Wednesday night while commending city employees' willingness to agree to a two-tier retirement system and paying their own pension costs.
The city has reached new contracts with six of the eight city unions for the upcoming fiscal year, which starts July 1. The Police Officers Association and the Dispatchers Association are still negotiating with city staff.
All of the new agreements include workers paying their full share of employee pension costs by the time the contracts expire in 2013.
Until recently, the city paid all of the employees' share of the pension costs. State law allows cities to require public safety employees to pay 9 percent of their pension, and all other employees pay 7 percent.
The six units also agreed to a two-tier retirement system.
Currently, sworn police officers and firefighters can retire at age 50 and receive 3 percent of their highest year of pay. New firefighters will now be in a second tier, where they will receive 3 percent at age 55, and it is based on the highest three years of pay. Police have not yet agreed to the second tier.
For non-safety employees, it is currently 2 percent at 55, but now it will be 2 percent at 60 for new employees.
While he appreciates employees' concessions, Councilman Bob Johnson said the city needs to go farther with pension reform. He was the only council member to vote against the budget, saying the pension issue is a "black cloud" looming over the city budget.
"I don't like being a negative person on this ... but I just can't support this when we don't take more aggressive action to get us out of this mess," he said.
The other main concession employees agreed to was capping the city's share of medical costs at the January 2012 rates.
Mayor JoAnne Mounce thanked employees for understanding the city's tough financial situation.
"For some, it's a 17-percent decrease in one's household income, and that changes what's in their refrigerator. I'd like to thank them for understanding our council's position and doing what is the good for the community," she said.
Councilman Larry Hansen credited the employees with allowing the city to be in a better position than others, like Stockton.
"The bottom line is, due to our employees making these concessions and basically going backwards on some of their pay and benefits, we are able to have a balanced budget with reserves, and are in no danger of going bankrupt," he said.
Hansen understands Johnson's position on pensions, but he said the city had to focus on passing a budget.
"We may at some point sit down and say more needs to be done, but to get our budget balanced and move forward, we need to accept the concessions our employees have made," Hansen said.
For the last several months, the city has been in constant negotiations with bargaining groups. During the current fiscal year, eight out of nine of the unions' agreements expired. The International Brotherhood of Electrical Workers contract continues until the end of 2013.
The Police Officers Association and the Dispatchers Association are the only two groups to not reach a new agreement. Deputy City Manager Jordan Ayers said city staff is still talking with the units and they are close to agreements with both.
When the city reaches agreements with the groups, City Manager Rad Bartlam said they will consider whether to use some of the savings to once again fund some of these positions.
For now, the city is planning to not fund six positions in the police department that are vacant. The positions include three police officers, one dispatcher/jailer, one records clerk and one assistant animal services officer.
Councilman Alan Nakanishi said the city should also thank previous councils for thinking ahead and managing Lodi's growth.
"Our revenues are decreasing and yet we can survive," Nakanishi said. "Who do we have to thank? We need to thank the people before us who limited it to 2 percent growth. If we had 10 percent growth, we'd be in a pickle."