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Saturday, Jul 10 2010 02:00 PM

Bakersfield's pension reform measure charting new territory

BY GRETCHEN WENNER, Californian staff writer gwenner@bakersfield.com

When Bakersfield voters decide in November whether to reduce retirement benefits for newly hired city police and firefighters, lots of people will be watching.

The local ballot measure will be among the first attempts nationwide to reduce public pension benefits at the ballot box. The outcome will no doubt serve as a test case for other cities and counties considering similar moves after soaring costs have pinched budgets. And there will likely be legal challenges that could also set precedents.

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In June, the Bakersfield City Council voted 5-2 to send a ballot measure to local voters on Nov. 2 that would reduce pension benefits for future police and firefighters. Non-safety workers previously agreed to a two-tier pension system and would not be impacted. Councilmembers Irma Carson and Sue Benham voted against the plan.

Here are details:

* Starting in January 2011, newly hired city police and firefighters would get a "2 at 50" plan, which pays 2 percent of salary for every year worked as early as age 50. Current safety workers get 3 at 50, which is 50 percent more generous. Safety employees previously had 2 at 50 before the city council approved the sweetened benefit in 2001.

* The new hires would have to pay their full employee contributions into the retirement plan as long as they work for the city. Currently, the city takes over those payments after a number of years.

* A staffer's final salary used for calculating retirement payout would be determined by averaging his or her final three years of pay rather than the last year. The longer period is thought to prevent pension "spiking," where workers can get a short-lived promotion that increases benefits.

* If passed, the measure would amend the city charter. Any future pension increases would therefore require another vote of local residents.

* The measure requires a simple majority to pass.

* It would not affect current employees.

Bakersfield's measure was proposed by City Councilmember Zack Scrivner and sent to the ballot last month by a 5-2 vote of the council. If approved by a majority of voters, it will roll back retirement benefits for future safety employees and require a vote of the electorate to make any increases going forward.

It is unique among several efforts around California headed for the Nov. 2 ballot:

* In Redding, the city council in June approved a pair of measures that would establish the city's initial bargaining positions with unions. One dissenting councilmember called the effort "ludicrous" because it "doesn't do anything," according to the Redding Record Searchlight;

* In Menlo Park, a citizens group qualified an initiative that would reduce retirement benefits for most new workers. Two employee unions are suing to keep the item off the ballot. Aside from the fact Bakersfield's measure was put forward by the city council, there's another key difference: Bakersfield is a so-called "charter city," a structure that allows it more leeway in determining employee pay and benefits than a "general law" city like Menlo Park, which is limited by state code;

* In San Francisco -- where changes to retirement benefits require a vote of the electorate, and one such reform passed overwhelmingly in June -- an initiative spearheaded by Public Defender Jeff Adachi will likely take center stage. The measure would require current employees who don't pay a share of pension costs to do so. (Police and fire, who can retire earlier than other workers, would pay 10 percent of their salaries; non-safety employees would pay 9 percent.) It's unusual because most proposed reforms, including Bakersfield's, apply only to future hires. While the measure hasn't officially qualified for November, Adachi on Tuesday turned in more than 75,000 signatures.

"This will be much more contentious" than the June proposition was, Adachi said. "It's only the second major pension reform we've had."

A pension initiative is also being worked on in Oakland but has not yet qualified for the ballot.

The spate of pending ballot measures prompted a recent article in the Cincinnati Enquirer to say California "may again be on the leading edge of a wave of simmering voter discontent," much as it was when Proposition 13, the landmark property tax initiative, was passed here in 1978.

"This will be precedent-setting for the state of California," said Robert Melton, an engineer with the Bakersfield Fire Department and president of International Association of Fire Fighters Local 246.

The union is still in the process of researching legal challenges to Bakersfield's measure, Melton said, but believes the move is unlawful.

"They're taking our right to bargain away," he said.

Firefighters, who have been working without a contract for more than two years, are still negotiating with the city. But doing so with the ballot measure pending is "a challenge in itself," Melton said.

He called the measure a "grandstanding play" by Scrivner, who is running for Kern County supervisor.

The last day for the city to pull the measure from the ballot is Aug. 11, a date the police union is keeping an eye on, said Todd Dickson, president of the Bakersfield Police Officers Association.

"We'll know on the 12th if the measure is a go or not," said Dickson, a detective with the Bakersfield Police Department. "If it is, at that time we'll be prepared to make all relevant legal challenges to it."

The police union has been without a contract for three years and is currently suing the city over alleged unfair labor practices. The parties are officially at impasse after negotiations failed.

Marcia Fritz, a Sacramento-area pension reform advocate with the California Foundation for Fiscal Responsibility, said local initiatives like Bakersfield's will be key, especially since a statewide measure failed to qualify for the ballot.

"This issue is bringing people into the political process who have never been involved before," Fritz said. "It's kind of neat."

Voters in San Diego and Orange County approved measures in 2006 and 2008, respectively, that require voter approval for future pension increases, but the initiatives didn't cut benefits as some current efforts propose.

Scrivner said the city believes it is on "solid legal footing" with the ballot measure he proposed. He also believes Bakersfield's measure isn't like anything that's been tried before.

"As far as ours is concerned," Scrivner said, "we are charting new territory."

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