Apparently the Hollister City Council was wearing rose-colored
glasses when they agreed to a new pension plan with local police
officers and firefighters three years ago. Now the city says it
can’t afford the estimated $1.7 million in combined costs if the
plan goes into effect.
Apparently the Hollister City Council was wearing rose-colored glasses when they agreed to a new pension plan with local police officers and firefighters three years ago. Now the city says it can’t afford the estimated $1.7 million in combined costs if the plan goes into effect.
And, truth be told, they can’t, at least right now. In 2002, the city agreed to pay police and firefighters 3 percent of their annual salary for every year worked when they reach the retirement age of 50. The police department’s increase was slated to begin in July and firefighter benefits would increase next year.
So now the city and its taxpaying residents are stuck between the proverbial rock and a hard place. The city certainly cannot afford increased pension payments that, according to City Councilman Doug Emerson, would constitute approximately 13 percent of its annual budget to only two groups of employees. And city officials can’t just abandon a plan they agreed to years ago without facing expensive lawsuits from police and fire unions.
Police and fire unions must show patience and understanding of the city’s financial situation and agree to negotiate with the city to find a compromise. They must also realize the significant increase in pension payments can have serious effects on their jobs – possibly resulting in further cuts to an already diminished force.
Both sides need to come back to the table and cut a deal that is fair not only for the police and firefighters, but also the taxpayers who fund their employment and will pay these bills in the future. Perhaps a new plan can be negotiated the puts pensions high on the list of priorities and catch up on lost time when the economy improves. The police and fire unions will have the upper hand in the negotiations and deserve an adequate increase similar to what they were already promised, but the council must make sure the city can deliver the next time around.
As City Councilman Brad Pike noted, the city needs more money and the inability to pay for the increase in pensions is a symptom of Hollister’s larger financial problem mired as it is in a weak economy with stagnant growth in the business sector. The city council must become more active in economic development, encouraging new businesses to create jobs and drive revenues for the city.
Hollister has a large enough population to fund necessary city services, including police and firefighter pensions, if the council can create a solid economic development plan that will entice residents to spend their dollars at home. Diversifying the city’s business environment and allowing residents to purchase goods and services at home rather than at Gilroy’s retail centers is a key element to long-term financial stability in local government.
This is the paramount issue for the city council. If the city fails to stimulate the local economy, pension woes will be the least of our problems in the future.
