published Wednesday, February 26th, 2014

Chattanooga City Council OKs 1st read of pension plan; Mayor Andy Berke promises pay fixes

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    Andy Berke
    Photo by Tim Barber.
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Fire and Police Pension Fund Task Force Meeting
Fire and Police Pension Fund Task Force Meeting

Before City Council members took their first vote on Chattanooga Mayor Andy Berke's fire and police pension reform, the mayor publicly promised to use savings from the pension to fix years' worth of pay disparities within the police department.

"As many of you in this room know, we've been sued by a number of employees with regards to problems that we have in our police department with pay issues," Berke told the council. "With these types of funds we will fix that problem."

The council then voted 9-0 on the first reading of the pension reform plan that will hike employee contributions by nearly 40 percent, cut retirees' cost-of-living adjustments while saving the city $227 million over the next 26 years.

The vote signifies that seven months of work from Berke's 18-member pension task force made up of city employees, union and business leaders, were successful in avoiding a public referendum on the issue and finding solutions that financial experts predict will cut the city's unfunded liability by 10 percentage points by next year. Berke appointed the task force in July to find ways to reduce the city's $150 million unfunded liability.

After the vote, Berke praised the reform, saying this kind of pension change hasn't been accomplished in many cities across the country that face fiscal woes due in part to the 2008 stock market crash.

"Lots of cities are facing these issues and it's a rare city that's actually been able to accomplish what we did tonight," Berke said. "We put the fund on the right track, we're able to look retirees in the eye and tell them they're going to get the benefits they expect, and we did so while saving Chattanooga taxpayers $227 million."

Last week the Fire and Police Pension Board unanimously approved the changes. The council is the last stop before the reform becomes law. Two more votes are needed.

While several dozen firefighters and police officers, both active and retired, protested the changes with signs at a City Council meeting three weeks ago, only a handful showed up Tuesday. Those opposed have said the cuts put the brunt of the burden on retirees and lower-paid employees.

The council held a public hearing before the vote, but no one raised a hand to speak in opposition. After the meeting was adjourned, several retirees showed up and said they were running late to the meeting.

Council members also publicly praised the process to reach a consensus in negotiations that union leaders and the pension board said most employees were willing to accept.

"It truly is the Chattanooga way. We found a way to work together in the interest of the whole," said Council Chairman Yusuf Hakeem.

When asked about Berke's pledge to address pay disparity, Hakeem said he will look at the research before deciding whether pay changes should be approved within the Chattanooga Police Department.

The city has been sued multiple times by dozens of police officers for failing to fix pay problems among the ranks of sergeant and above. Twenty-nine police officers filed suit in July 2012 and 12 more master patrolmen sued in October 2012 over ongoing disputes in which some junior officers were paid more than their senior supervisors.

Union leaders who were on Berke's task force said the pay disparities within the police department were part of negotiations involving the pension reforms. But Sgt. Tim Tomisek, president of the International Brotherhood of Police local chapter, said union members weren't promised the issue would be addressed in return for going along with the pension plan changes.

"We brought it up in negotiations," said Tomisek, who is also a pension task force member. "Although they are related, it's two separate problems and the mayor rightly so wanted to correct one problem at a time."

A study is underway on the salary structure, Berke said. The International Association of Chiefs of Police is being paid $100,000 to complete a top-to-bottom review of the police department. Berke didn't say when any changes to salary scales would be publicly addressed.

Next week the council will make its second vote. If approved upon the third and final vote, the changes to the pension plan will go into effect July 1.

Contact staff writer Joy Lukachick at jlukachick@timesfreepress.com or 423-757-6659.

about Joy Lukachick Smith...

Joy Lukachick is the city government reporter for the Chattanooga Times Free Press Since 2009, she's covered breaking news, high-profile trials, stories of lost lives and of regained hope and done investigative work. Raised near the Bayou, Joy’s hometown is along the outskirts of Baton Rouge, La. She has a bachelor’s degree in mass communication from Louisiana State University. While at LSU, Joy was a staff writer for the Daily Reveille. When Joy isn't chasing ...

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