CA: Record pay raises ahead for state firefighters- Increase will kick in on contract's last day

SACRAMENTO – Some state firefighters will get a pay raise in June estimated to average 22 percent, and others may be able to retire with pensions higher than their final salary.

That could give the firefighters, who have long complained about being underpaid, the largest one-time pay increase ever received by members of a state labor union.

The big pay raise on June 30, estimated to cost the state $38.7 million next fiscal year, comes on the last day of a little-publicized union contract approved by lawmakers five years ago.

The firefighter contract, which has already boosted base salaries and overtime pay rates, will have increased total pay between 40 percent to 50 percent when it expires, according to the state Department of Finance. Firefighters defend the raise, noting that they will be required to work more hours each week.

Total annual pay for fire captain, now 1,340 positions, will have increased to $103,266 at the top salary step, the Finance Department estimates. Pay for battalion chiefs, 265 positions, will have increased to $130,579 at the top step.

Shortly after the contract was approved, the administration of former Gov. Gray Davis settled a “split-class” dispute with the union that made battalion chiefs eligible for increased pay under the contract.

The battalion chiefs, formerly nonunion supervisors, were reclassified as nonsupervisory members covered by the labor contract negotiated by the union, the CDF Firefighters. Their duties were not changed.

The battalion chiefs now earn significantly more than their nonunion supervisors, division chiefs, some of whom are in the unusual position of requesting demotions to earn more pay.

The primary responsibility of the state Department of Forestry and Fire Protection, which has a budget of about $1 billion and 3,382 positions covered by the labor contract, is protection of state timberland and rural areas.

But the state also has contracts with local governments to provide fire protection services in a number of areas, including smaller towns and new developments pushing into what had been wild lands.

Tulare County, concerned about the rising cost of state fire service, is planning to drop its contract and create its own fire department.

“The contract was the prime catalyst,” said Jean Rousseau, Tulare County chief finance deputy. “We are not convinced it is not going to continue to go up.”

The San Diego Rural Fire Protection District, sprawling over 720 square miles east of Chula Vista, is going the other way, converting into a state contract unit in a push by the county to improve protection after disastrous wildfires in 2003.

“I can't tell you what kind of a shot in the arm that is going to be to provide this level of service out here,” said David Nissen, the San Diego Rural Fire chief.

Nissen said the county is giving the district $1.46 million to improve training and staffing to meet state requirements. He estimated that the increased pay for the three captain positions “is probably going to be somewhere in the neighborhood of $20,000 to $25,000.”

The big pay raise for state firefighters in June is for 17 hours of planned overtime each week, the result of expanding the longer fire-season work week to the full year.

State firefighters usually work a 53-hour week during the off-season, the maximum under federal law that can be worked by firefighters without triggering overtime pay rates.

On the final day of the labor contract, firefighters will be switched year-round to the 72-hour week currently used for fire seasons. They are expected to begin working three 24-hour shifts each week.

During the past five years, the labor contract has increased overtime hourly rates, gradually moving them from half of regular pay to 50 percent more than regular pay.

The fire season in some areas of Southern California is already year-round. But in Northern California, a wetter region, the fire season is often only six to seven months.

In an analysis last month of the new state budget proposed by Gov. Arnold Schwarzenegger, the nonpartisan Legislative Analyst estimated that the average pay of firefighters covered by the contract would increase 29 percent on June 30.

Five years ago, prison guards obtained a widely criticized contract that was intended to make their pay more like that of Highway Patrol officers, was once estimated to result in pay raises totaling 37 percent.

But a series of raises under the contract, based on annual surveys of five large police and sheriff forces, has given the correctional officers raises totaling 22.8 percent so far.

When the current firefighter contract was negotiated, some legislators agreed that state firefighters were doing a third more work for a third less pay than local government firefighters, according to a union spokesman.

“The idea that state firefighters should not have parity with local firefighters is ridiculous,” said Terry McHale, a spokesman for the CDF Firefighters union.

Lynelle Jolley, a spokeswoman for the state Department of Personnel Administration, said the state is conducting a survey for the first time in two decades of salaries for firefighters and other types of jobs in local government and the private sector, including health and pension benefits.

An official in the state Department of Forestry and Fire Protection said it's important to note that the pay increase for firefighters in June is for longer hours of work.

“It's not as if the money is being poured down a hole,” said Larry Menth, the department assistant director. “There is attendance and work and community benefit.”

Over the years, Menth said, the role of state firefighters has been changing as they become full-fledged units in some urbanized areas.

“The department I think ultimately will have to look at its mission and see what it wants, and then compensate its employees accordingly,” he said.

Like the prison guards, the state firefighters negotiated a contract that increased their pension benefits Jan. 1, giving them the same retirement formula as the Highway Patrol.

They can retire at age 50 with 3 percent of the highest annual salary for each year served. Their previous retirement benefit gave them 3 percent at age 55.

But the Department of Personnel Administration has not increased the pension benefit for firefighter supervisors, leaving them at 3 percent at age 55.

As a result, some think the department inadvertently created two separate retirement categories that will allow firefighters who have been both union members and nonunion supervisors to get higher pension payments.

A cap on state pensions limits retirement payments to no more than 90 percent of a worker's highest salary. But now there is a question about whether some firefighters can exceed the cap by retiring after having worked in both union and nonunion jobs. Essentially, a firefighter would leave the union retirement system and start the clock over in the nonunion system.

“I think it now has the likely potential of allowing some people to retire at over the 90 percent cap and in some cases over 100 percent,” said Jim Rissmiller, CDF Firefighters union legislative director.

For example, he said, a person with 40 years of service, half as rank-and-file and half as supervisor, could retire with 60 percent of his highest salary in the union and 60 percent of his salary as a supervisor.

Depending on the pay in both jobs, the total pension payment in this hypothetical case could be well above his highest annual salary.

A bigger pension could trigger a wave of retirements among battalion chiefs and others.

“We have an anecdotal increase,” said Michael Jarvis, a spokesman for the state fire protection department, when asked if there has been an increase in retirements. “But we don't have actual totals at this point.”

The question of whether firefighters may be eligible for a pension of more than 90 percent of their highest salary is an issue that would be resolved by the state pension fund, Jolley said.

“Our staff is researching the law,” said Pat Macht, a spokeswoman for the California Public Employees Retirement System. “And right now no determination will be given until we have come to some conclusion.”

The chickens have come home to roost. The City of San Diego is going bankrupt from generous pension benefits. Orange County is talking seriously about filing bankruptcy again to get out from underneath their pension requirements. The state’s contribution to CalPERS is estimated to be $3.5 billion this year, and even higher next year. This is from nothing in 1999.

And this week, the Legislative Analyst’s Office released a report that the cost of retiree health benefits will be “in the range of $40 billion to $70 billion, and perhaps more.” The report identifies two reasons for this increased cost; (a) increased health care costs; and (b) legislatively mandated increased health benefits.

Health care costs have increased significantly in the last six years for one reason: legislatively mandated minimum requirements for health care. From 1999 to 2000, the Legislature passed over 30 different mandates on health insurers, and as a result, costs increased over 40%.

In addition, the Government Standards Accounting Board (GASB) passed new rules on how to account for these increases. GASB statement 45 (GASB 45) increases the information the governments must report to properly assess their liabilities. No longer can the government employee unions, and their management allies, cook the books to understate the liabilities. Once all these liabilities are reported, the government agency must pay for all of the costs of those liabilities.

To the state of California, GASB 45 would require $6 billion in payments, compared to $1 billion today. This is in addition to the state’s already $2-3 billion increase in pension costs, and the existing $5 billion structural deficit, the state is on the brink of a crisis.

Chickens Coming Home to Roost

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