CARLSBAD — Carlsbad has reached a tentative agreement with the Carlsbad City Employees’ Association that will phase-in compensation changes during the next two years, including association members paying the full amount of their employee pension contributions.
The Carlsbad City Council, at its June 21 meeting, approved a memorandum of understanding, covering a term from Jan. 1, 2011 to Dec. 31, 2012. The Carlsbad City Employees’ Association, which represents 346 city employees, voted June 14 to accept the terms of the MOU.
Under the MOU employees represented by the association will receive no salary increases during the two-year term. Employees will contribute an additional 3.5 percent of their salaries toward their pension costs starting at the end of this year, and another 3.5 percent starting at the end of 2012. This will bring the total pension contribution to the full employee share of 8 percent. Currently, employees pay 1 percent of their salaries toward their pensions, and the city pays 7 percent.
The agreement also includes creating a two-tiered retirement plan for association members. New employees represented by the association will fall under a lower retirement benefit called 2-percent-at-60. Under this plan, employees would receive 2 percent of an average of their last three years of earnings times the number of years served. Currently, association members receive 3 percent of their last year of earnings times the number of years served. The second tier would go into effect Nov. 27, 2011, or shortly after that, depending on when the city can be ready to administer the new benefit. The second tier applies to new employees only. Retirement formulas for existing employees are considered a vested right under the law and cannot be reduced.
Similar to the charter amendment passed on last November’s ballot concerning public safety employees, the city will put a charter amendment on the next election ballot prohibiting a future increase in the 2-percent-at-60 plan without voter approval. The measure requires a simple majority to pass.
Other terms of the agreement include an increase in equipment allowances and an increase in the city’s contribution to employee health insurance benefits. The city will also implement the loan provision of the city’s deferred compensation plan, allowing employees to take out certain types of loans against their deferred compensation plan balances. This deferred compensation plan is optional for employees and totally separate from the pension system. It is 100 percent funded by employee contributions.
The city and association reached an impasse on new language the city wants included in the labor agreement regarding the city’s “ability to transfer employees among various city activities and work groups; implement unpaid furloughs of employees; contract out bargaining unit work to third parties or assign work to city employees outside the bargaining unit.”
The city and association agreed that all of the impasse procedure requirements outlined in the law that governs the city’s employer-employee relations have been satisfied. As a result, an impasse hearing with the City Council is not required. Instead, the City Council voted to impose this new city rights language at its June 21 meeting.
The city of Carlsbad entered into new agreements with its police and fire employees in mid 2010. Those agreements also included provisions for employees to pay their full share of the pension contribution and established a lower retirement benefit for new hires.