Council at odds over funding workers’ retirement


Alexandrias top decision makers are far from consensus on a controversial proposal to up employee pension contributions by 1 percent as the clock ticks down on the budget season. 

The proposal has sparked protest from city employees who say the change is akin to a pay cut after years of austerity. While officials are offering merit-based raises for government workers, added pension contributions coupled with higher health care costs mean roughly 50 percent of employees could see their pay cut in fiscal year 2012. 

Civilian government workers hired before 2010 currently contribute nothing to their retirement plans, while police officers and firefighters on a separate plan pay 8 percent of the cost. Employees hired after 2010 already pay a portion of those costs as well.  

City Manager Jim Hartmann said the move offsets rising benefit costs, which have added up to roughly $11 million. Asked to draft a budget without raising property taxes, the money had to come from somewhere, Hartmann said. 

Were dealing with cost in compensation and in benefits in general, some of them cost more and some of them cost less, he said. If we want to catch up and do things like merit increases and look at our market rates [as compared to other municipalities], we have to treat all those costs as a whole instead of individual pieces. Certainly the citys share of medical and of retirement benefits is pretty significant.

Vice Mayor Kerry Donley is in favor of the contribution change. He believes coupling the pension hike with merit raises, which are given on the anniversary of the employees hiring date, is a fair compromise. 

Im not supportive of the way the manager has recommended them right now, Donley said. I just think some of the employee benefits costs are going to have to start being born by some of the employees. We started it with newer employees and in general Im supportive of that concept.

Its an option employees say misses the point. Any discussion of added contributions should be off the table until the city makes amend for years without cost of living increases, said Brenda DSylva of the Alexandria Government Employees Association.

Its an argument not lost on Mayor Bill Euille, who wants to find a way to meet pension costs without reaching into employee pocketbooks. If officials cant find a way to make ends meet on pension costs this year, he favors deferring the contribution debate until fiscal year 2013. 

Im flexible, Euille said. I think we owe it to our employees to pay compensation for which we have deferred and delayed for the last three budget cycles because we couldnt afford any market rate adjustments. For the most part, I am committed to trying to see what we can do to get a few more dollars in their paychecks.

Councilwoman Del Pepper remains undecided as well. The council is considering possible alternatives and further study is needed, she said. Councilman Rob Krupicka foresees a broad debate as the council searches for ways around hitting employees with the contribution. 

My preference would be to find a way to not ask the employees to add more to their pensions. Theyre already paying quite a bit, he said. Weve also asked our employees over the last few years to pick up a substantial area of their health care costs. But the reality of that is we have been giving them pay cuts every year.

While the budget wont be finalized and adopted until May 2, Councilwoman Alicia Hughes made it clear she wont support asking employees to fork over a larger contribution toward their retirement. 

It needs to be examined more closely, however, I do not believe in a contribution that would be [akin to] a pay reduction, she said. This pension increase will offset any raise due to merit increases. I cant support that. I value employees enough to not reduce their pay.