Contract negotiations between the Rancho Santa Fe Professional Firefighters Association (Local 4349) and the Rancho Santa Fe Fire Protection District (RSFFPD) recently concluded and an agreement was reached regarding changes to retirement and benefits in a continuing effort to maintain the financial stability of the Fire District. These changes include a two-tier retirement benefit that will set new parameters for future firefighters, as well as adjustments to their health care plan and sick leave accumulation.
“It is just as important to the Firefighters Association as it is to the board of directors and administration that the Fire District remains financially healthy,” said Captain David Livingstone. “There was a lot of discussion, but the solution we developed made a lot of sense based on the economic times. We felt it was a win for the firefighters as well as the district.”
Under the new tiered retirement system, all new employees hired after April 1, 2012, will retain their retirement plan through Cal-PERS, however, at a lower formula of 3 percent at 55. In other words, a current employee is eligible for retirement at age 50 while a new employee will be eligible for retirement at age 55, both receiving a credit of 3 percent for each year of service. In addition, the new formula will also require new employees to pay 50 percent of the employee portion of Cal-PERS costs.
Director Randall Malin, who led negotiations on behalf of the district, stated “We are very fortunate to have employees who fully understand the negative impact on property tax revenue resulting from the deterioration of the real estate market.” Malin noted that almost 90 percent of the district’s revenue comes from property taxes, which have fallen by 9.4 percent in the last three years. He commended the firefighters who, while not having a wage increase since July 2008, proposed a significant change to the health insurance program that will reduce the district’s costs.
Malin also pointed to two areas where the district is in a more favorable financial position than other districts in the state. “First, in 2004 our pension program was underfunded by $4.2 million, which cost the district over $300,000 per year in interest. We paid off the entire amount and the district is now debt-free. Second, as we do not offer post-retirement health benefits, we do not face the same underfunding problem in this area as do many fire districts, cities, and the State of California itself.”
Director Nancy Hillgren commented that “for more than a decade the board of the RSFFPD has been especially mindful of the escalating costs related to Cal-PERS mandated pension requirements and has been taking proactive measures to curb their fiscal impact on the district. In addition to reducing our costs associated with Cal-PERS, the board has not granted pay increases to district employees in over four years. The board and the district’s employees recognize that personnel costs comprise 83 percent of the district’s budget, and have worked well together to contain and further reduce those costs in an environment of decreasing revenues. The implementation of a new hire scale was an astute move that, combined with other recently adopted measures, will provide needed savings for the district going forward.”
In addition to adding the second tier for retirement benefits, the board and Firefighters Association also took steps to save on the employees’ health care plan. By adjusting the health insurance cap the district could save up to $80,000 annually while continuing to provide health insurance for its employees. Also, the number of sick leave hours an employee can accrue was increased, leading to a potential annual savings of $255,000.
Fire Chief Tony Michel stated that “It is good to know that we can take steps to maintain the financial stability of the organization without compromising our high level of customer service to our community. As always, it is our goal to meet the needs of our community and fulfill our mission to ‘protect life, property, and environment through prevention, preparedness, education and emergency response.’”
— Submitted press release by the RSF Fire District.