Wednesday, July 30, 2014

New employee contracts get fire district back on track

From page A1 | February 05, 2014 |

It’s been touch and go for the El Dorado County Fire Protection District over the past two years as a result of budget problems.

But Fire Chief Mike Hardy says they are back on track as they have done what’s needed to ensure the district’s long-term health.

With salaries and benefits making up almost 89 percent of this year’s budget, the biggest part of getting their financial house in order has consisted of reorganizing the district and renegotiating union contracts to bring costs back in line with revenues.

Hardy said those changes actually began last year with a reduction in staff as the district dropped from seven to four chief officers. In addition the district has laid off a full-time maintenance and IT person and reduced a full-time receptionist to part-time.

In addition, all employees began paying 9 percent of their PERs (retirement) for the first time. “In doing those things last year, it set the stage for this year’s contract negotiations,” he said.

New contracts that went into effect Jan. 1 of this year have resulted in further concessions by both the professional firefighters and management, with employees now chipping in an additional 1 percent towards PERs.

With the employees now paying 10 percent of their PERs, it takes some of the burden off the district.

“The firefighters also agreed to eliminate two positions so the district is now down from 17 to 15 positions,” he said. “Apprentices will be allowed to work in those positions until we meet some benchmarks on the budget. The average firefighter, with benefits, costs $110,000 to $120,000 a year, so that’s $240,000 in savings right there.”

Medical benefits were also changed in the new contracts.

“We have three levels,” said Hardy, “Employees only, employee plus one, and family. We belong to PERs and there are five medical benefit plans they can choose from where payments range from $600 a month for an individual to $2,200 for a family.” Deciding to cap the amount the district pays for medical, Hardy said, starting this year the district will pay a maximum of $625 a month for an individual, $1,250 for an employee plus one, and $1,600 a month for a family. Any charge over that amount the employee would have to cover. However, Hardy said that at least two of the five health plans people can choose from are totally covered by what the district will pay in health benefits.

“That’s a significant change for everyone, including retirees,” he said. “Up until this point retiree health benefits have been untouchable. Never before did we have to ask retirees to help get the district back on track financially, but this year we did.”

Saying that they have 53 retirees who are affected by the change, Hardy said they were paying $800,000 a year for retiree health care alone.

“So they have had a modest adjustment,” he said, noting that now the district will only pay the same for retirees as it does for its employees. “Before this, the district would pay 100 percent of whatever plan the employee chose, no matter what it cost,” he said.

Another big chunk of savings came from changing how people accrue time. The district has a pretty liberal holiday, vacation and sick leave package, he said. The new contract caps accrual leave for sick and vacation and now everyone receives about a third less accrued time than before. The overtime budget was $750,000 to $800,000 a year,” said Hardy, so reducing the amount of accrual will save considerable money.

“Other fire districts are doing the same things, he said. “It’s something you have to do to manage costs. It was 10 percent of our budget. Our guys get it. It was a concession the employees agreed to. As we get better financially, my goal is to give back what they gave up.”

Hardy said between the two contracts, they will save $700,000 and if they add in the savings from last year, it comes to $1.5 million. “So we’re looking really good,” he added.

Hardy went on to say that what the district has been able to do in the last year has been nothing short of miraculous.

“We haven’t had to lay anyone off. We will have to brown out a station for five months, but employees have stepped up to the plate to make it work. I’m not happy about having to brown out a station. It was a hard choice, but we can’t run out of money. Retirees do have to take a little bit of hit. We value what they have done, but I don’t know any agency where you can get 100 percent of whatever out there. We have thought it through and employees still have choices in plans.

“My vision was to make the district financially whole again and make us survive long-term, regardless if we went to Cal Fire or not. We are setting ourselves up long-term to be successful.”

Noting that the district’s financial condition was not just the result of recent events, Hardy said that 10 years ago it lost 20 percent of its budget when the state shifted a portion of property tax revenues from counties, cities and special districts to the schools. Then in 2006, revenue started to decline because of the property tax decline. “So it’s no wonder we’re fiscally struggling,” he said, adding that the prior administration also didn’t respond quickly enough when there were changes.

Hardy went on to say that he felt “very fortunate to be in the position” he’s in “with a board that’s supportive and a union that understands that we just need to do the tough things. But they are in it for the long haul. I’m confident that we’re going to be healthy financially and operationally in the next couple of years and I look forward to it.”

Contact Dawn Hodson at 530-344-5071 or Follow @DHodsonMtDemo on Twitter.





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