Back in October, Sacramento city's charter officers – City Clerk Shirley Concolino, City Attorney Eileen Teichert and City Treasurer Russell Fehr – volunteered to pay the employee portion of their retirement costs. Previously, the city had picked up that payment, as it does either in total or in part for all city employees.
This evening, the City Council is set to ratify an agreement that will require the city's other 35 top managers, including the police chief, fire chief, most department heads and some division heads to pay their employee share of retirement contributions as well.
It was an agreement the managers affected reached by consensus. Like the charter officers, in exchange for paying the employee share – which amounts to roughly 9 percent of pay for those in the police and fire departments and 7 percent for all others – Sacramento's top managers will no longer be subject to furloughs.
The city's general fund will realize a net savings of $100,000 annually. That's not a lot of money, but symbolically the agreement is significant. It sets the stage for pension concessions from other city workers.
Sacramento faces another tough budget year. The city's general fund pension costs are $51 million this year, up from $43 million five years ago. When rank-and-file workers begin negotiating new contracts, pensions must be part of the discussion.
The dubious practice of local governments picking up the employee share of pension costs, not unique to Sacramento, had the unfortunate effect of shielding workers from the growing burden of lavish retirement benefits. Given the battering that pension funds took in the 2008 stock market collapse and runaway pension costs in general, asking employers – taxpayers really – to pick up the entire employee share of costs is no longer appropriate.
But before any city can ask its lower-paid workers to make sacrifices, it must demand commensurate concessions from the highest-paid people in the organization. By agreeing to pay their share of pension costs, senior managers set the right tone.
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