Police officers and sergeants in the city of Sacramento will begin paying into their pensions after an arbitrator’s ruling last month, officials said Thursday. Those officers were the only city employees who did not pay anything into their retirement accounts.
The ruling ends months of disagreements between the city and the union representing police in Sacramento.
As a result of the June 16 ruling, police officers and sergeants will pay the full employee share of their pension contributions, which amounts to 9 percent of their salaries. Police will also pay an additional 3 percent of their salaries to cover part of a city-funded employer share.
In exchange, police officers will receive 3 percent annual salary increases in 2015, 2016 and 2017. Sergeants will get 2.33 percent raises in those years.
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Civilian employees in the Police Department will pay the full employee share of pensions – 7 percent of their salaries. They’ll also pay 1 percent to cover some of the employer share. Those workers will get 1 percent raises in 2016 and 2017.
City officials were willing to accept the raises. City Manager John Shirey said the city recognized that police officers and sergeants in Sacramento were making less than officers in nearby jurisdictions.
The arrangement will save the city roughly $3.2 million over the next three years. Once all three raises take effect, the ruling will cost the city an estimated $1.6 million each year.
The ruling was an important one for the city, which has tried for years to persuade police officers to contribute toward their pensions. Talks between the sides broke down and the disagreement went to arbitration earlier this year.
“I think it’s a ruling where neither side got everything they wanted and that probably makes it fair,” Shirey said. “The most important thing here is that the issue has been resolved. Officers will be paying their pensions, which was a bottom line objective for the city.”
The city had been spending $450,000 a month covering the employee share of police pensions, Shirey said.
Dustin Smith, head of the police union, said his organization has acknowledged for more than two years that it needed to agree to pension changes, but was unable to reach a deal with the city that was fair to police officers. He noted that officers will now make the largest pension contributions of any city employees and that the new retirement contributions will amount to a pay cut for his union members.
“At the end of the day, the paychecks for police officers are going to be significantly lower than they are today,” he said. “There are departments around this region where officers are paid significantly more and do significantly less. At some point, you start to worry about recruitment and retention.”
Shirey said another important provision in the arbitrator’s ruling will change the time that officers remain on beat assignments. Under the old system, officers could apply to change assignments every November. Cops will now have to stay on beats for at least two years, Shirey said.
“We wanted to have some assurance that officers would stay on beats for two years so they become more familiar with their areas and they learn about the people that live there,” Shirey said.
The ruling will also mean that newly hired officers will not be eligible for city-funded health benefits after they retire. The city has an unfunded liability of $473 million for retiree medical costs, Shirey said, and the police ruling is “important for the city because we need to quit digging that hole deeper.”