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Politics & Government

Council Benefits and Travel Expenses Come Under Fire at Meeting

A building packed with concerned residents and local city employees made for a tense Cerritos City Council last week.

On the evening of April 28, the Cerritos City Council witnessed not only a large turnout on behalf of American Federation of State, County and Municipal Employees (AFSCME) Local 619, but also a slew of non-Union residents speaking out on councilmember benefits and expenses.  

The more than 6-hour meeting began with an intense public comments section which ultimately led to a heated agenda. And at the end of the marathon evening, the City implemented its "last, best and final offer” for represented full-time and part-time employees.

The subject of council benefits was first brought to light during the April 14 council meeting when Cerritos resident Keri Chang and recent council candidate, , voiced their thoughts on the California Public Employees Retirement System (CalPERS).

Kicking off the discussion in front of a packed, sign-wielding crowd was another past council candidate, .

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“It is not fair that the taxpayers money is being used to pay for city council’s lifetime healthcare insurance,” Rami said. “The council should not impose any contracts but negotiate in good faith.”

The crowd interrupted Rami’s statement – in reference to halted negotiations with Local 619 – with applause.

Cerritos' City and Theater Marketing Manager, Annie Hylton, explained to Patch.com that each councilmember is eligible to enroll for the PERS Choice Family, a benefit plan offered by the CalPERS which covers up to (including 3 dependents) $1,290 per month. However, Hylton pointed out, that most of the councilmembers do not opt for the plan and are not enrolled. In lieu of medical benefits, councilmembers may also choose to recieve a cash payment of $780 per month instead, but only while he or she is serving on the City Council. 

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Hylton further explained that prior to the Council's newly implemented offer, under the old system, when a councilmember retires and has served for at least five years, he or she would then be eligible for lifetime medical insurance if they were already enrolled in CalPERS. However, under the new guidelines, a retiring councilmember or city employee will now need a minimum of 10 years of credited service at retirement for the City to contribute toward his or her medical insurance.

The idea of lifetime benefits has continued to fuel widespread concerns from the Union, which maintains that the Council has failed to make necessary financial sacrifices despite hard economic times. Since the City's labor agreements with both the full-time non-exempt bargaining unit and part-time bargaining unit expired on June 30, 2010, labor negotiations between Local 619 and Cerritos had been at an impasse until the Council took action by implementing the City's last, best and final offer at the end of the meeting, bringing closure to the whole process.

During the lengthy April 28 meeting, the Council again faced heated criticism when 42-year resident, John MacFarlane, delivered an anecdotal account of the council members’ recent travel expenses to  Before MacFarlane spoke, he too was met with applause, prompting Mayor Carol Chen to advise the audience to refrain from clapping in order to give speakers the ability to be heard.

“What the hell are they doing in Washington, D.C. spending Cerritos’ city money?” MacFarlane rhetorically asked in his story regarding a picture he saw of the council meeting with the Taiwanese ambassador (which MacFarlane mistakened for the Chinese ambassador). “I don’t know what they’re doing there. I sure don’t know any reason these council members need to meet in person with an ambassador. I’m quite sure the Chinese have video conferencing.”

MacFarlane's comment was in reference to held on March 12-16 which city council members attended. When Mayor Chen explained that the meeting with the ambassador was part of the conference, MacFarlane rushed back to the mic in defense.

“I don’t care what it is for,” he said. “I believe it was a waste.”

Hylton says a complete breakdown of the amount of expenses each councilmember logged for the East Coast trip are currently pending. (Patch will provide an update once those figures are received.)

Three-and-a-half hours into the meeting, Chen called for 10-minute break before proceeding to the Union-related agenda topics (and 34 speaker cards), which led to swift shouts of, “Why wait?” and a “Let us talk!” from the audience. During the break, a barefoot Congresswoman Linda Sanchez expressed her dissatisfaction with the progress of the already lengthy meeting.

“I am absolutely horrified by the democratic process,” Sanchez said. After the break, the congresswoman spoke before the Council an offered her services to help both sides come to an agreement. But Sanchez also took a moment sto maintain her qualms on the evening’s proceedings.

“I want to give you a little bit of advice on democratic process,” she said to the Council. “Public servants and elected officials do better when they listen more and they talk less. Agenda items that you know are going to cause much public debate and discussion should be placed first at a city council agenda.”

The evening ended with . 

Details of the City's Last, Best and Final Offer

Per the terms of the offer, "a new, reduced benefit tier will apply to all newly elected City councilmembers and newly hired city employees. In July 2010, the City Council directed the management team to propose a reduced pension plan and a new vesting schedule for retiree medical coverage for newly elected Councilmembers and employees. The new benefit tier includes a two percent at 60 retirement formula," according to a city-issued statement.

The last, best and final offer applies to the 2010-2011 Fiscal Year, which ends on June 30, however, the State of California's regulations do not allow benefit changes to be applied retroactively.

The newly enacted benefit tier also outlines an adjusted vesting schedule for retiree medical benefits when it comes to newly elected councilmembers and city employees.

Under the revised vesting schedule, a retiring councilmember or city employee will now need a minimum of 10 years of credited service at retirement for the City to contribute toward his or her medical insurance. With 10 years of credited service at retirement, the City's contribution toward medical insurance will be 50 percent. With each additional year of credited service at retirement, the contribution will increase by five percent. The vesting will reach a 100 percent employer contribution at 20 or more years of credited service at retirement, according to the City. 

Only councilmembers who elect to join the pension system are eligible for the retiree health benefit. Additionally, only councilmembers who are members of CalPERS and retire within 120 days of the end of their council service are eligible for the retiree health benefit. These regulations are set by CalPERS and not by the City Council, the statement says.

The City also notes that the cost of the pension plan is set by this system, "The City Councilmembers receive the same benefits as City employees and do not receive a more valuable benefit package." 

Under the council's newly implemented guidelines, current City employees' salary tables and medical benefits remain unchanged. However, the offer does include a salary schedule reduction of $1 per hour for newly hired temporary part-time employees.

"The City's last, best and final offer was developed to achieve the goals of continuing an outstanding level of service to the community and ensuring long-term economic sustainability of services," the statement reads.

"As part of its efforts to reduce operating costs, the City Council took action in the 2009-2010 Fiscal Year to reduce the City Council's salary by 10 percent. In the 2010-2011 Fiscal Year, the City Council voted to reduce the City Council's travel budget by $50,170," it added. 

City Savings

The final offer expects to save the City an estimated $458,000 per year in retiree benefit costs. In addition, for each new hire who retires with less than 10 years of service, the savings to the City will be $1,290 per month, based on the current cost for employee health care benefits. In addition, a salary savings of approximately $280,000 annually will be achieved with the $1 per hour decrease for newly hired part-time employees, according to the City.

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