Many San Luis Obispo employees are being asked to take a nearly 7 percent cut in their overall compensation — which includes benefits and pay — to help balance the city’s budget. The City Council wants to slash $3.1 million annually from employee costs — or 6.8 percent per employee.
The city is sitting down to negotiate with all of its major employee groups, except for the police management union. The contracts for those groups expire at year’s end.
In a letter obtained by The Tribune, the city outlined its initial negotiation objectives with the four groups at the bargaining table representing police, fire, battalion chiefs and general employees.
The goals are clear: The city wants employees to pay their full retirement contributions, and a two-tier pension plan should be created to reduce the retirement costs of future employees.
“Each group is being asked to contribute 6.8 percent of total compensation to achieve the overall financial objective,” City Manager Katie Lichtig said. “How they get to it, in terms of different groups having different circumstances, has yet to be decided.”
The city currently pays the employee contribution — 8 percent for regular employees and 9 percent for public safety — to the Public Employees Retirement System for all employees except for police and battalion chiefs, who pay their own. The city’s goal of reducing employee compensation — which includes salary, health benefits, vacation pay and retirement costs — by $3.1 million will be decided in closed session at the bargaining table. The city cannot dictate how the cuts will be made without negotiating the changes.
Councilman Andrew Carter, who has long advocated for the city to reduce its pension costs, said that either way employees will feel the impact.
“Either way the reductions are made it is going to have an impact on their take-home pay,” he said.
He added that it is unreasonable that the city pay for the total pension costs of employees. “It is not unrealistic to expect public employees to pay 8 or 9 percent because basically most people in the public sector are paying something for their pensions,” Carter said.
A similar compensation cut will be asked of all unrepresented employees including the city manager and other city management, he said.
In June, the City Council adopted a two-year spending plan that cut $4.4 million in the first year from the city’s $99 million budget.
The cuts eliminated some employee positions and reduced city services.
The plan included cuts that employees would be asked to make totaling $4.5 million in pay and benefit cuts over a two-year period.
Reach AnnMarie Cornejo at 781-7939. Stay updated by following @a_cornejo on Twitter.