Public safety unions’ contracts to expire

Contracts between Newport Beach and the city’s public safety unions are set to expire Saturday, and officials said they have not yet agreed on how much workers’ retirement benefits should be scaled back.

Newport Beach police, firefighters and lifeguards will continue to operate under their existing contracts until a deal is brokered in 2012.

The delay in negotiations shows the difficulty in reforming public employee pensions, a priority established by the City Council in recent years. As in governments across the country, Newport’s tax revenue and retirement investment fund shriveled, and the city faces a large unfunded pension liability.

Police and firefighter unions have apparently resisted less generous pension plans for their new employees, although they agreed to pay more toward their retirement fund. Union leaders say they might not be able to hire the best recruits with reduced benefits packages.

“There’s no secret that Newport Beach always hired the top 1% of candidates, and we feel the city deserves that quality of candidates,” said Police Assn. President Dave Syvock, later adding, “We just want [a pension plan] that’s going to be competitive with the rest of the market.”

Syvock said public safety leaders are concerned their departments will become training grounds for top employees who are later lured to cities with more lucrative benefits.

Other cities and counties are adopting lower plans for new employees, and Newport will almost certainly follow suit, said Firefighters Assn. President Brian McDonough. The question is how much lower.

“Nobody wants to be the first to dive off that cliff,” McDonough said.

Firefighters and police officers have a retirement plan that allows them to retire at age 50 with a pension that equals 90% of their largest annual salary, assuming they work in the city for 30 years.

This summer, city administrators persuaded lifeguards, who had the same plan, to accept a lower formula for their new hires. It allows new employees to retire with 60% of their salary, under the same circumstances. Existing employees were able to keep the more generous plan.

City administrators indicated they wanted the police and fire unions to make similar concessions.

“The discussions are challenging, but I believe [they] have been more productive and amicable in recent weeks,” City Manager Dave Kiff wrote in an email. “I remain optimistic that the city and the associations will conclude discussions in a positive way soon.”

One point that city and union negotiators apparently agree on is how much employees should contribute to their retirement fund. Currently, police and fire employees contribute 3.5% of their base pay, but McDonough said unions indicated they would contribute 9% of their total pay.

Lifeguards agreed to 9%. They were negotiating under public pressure to reduce their compensation after news reports revealed that some managers were paid six-figure salaries.

Police and firefighters haven’t received as much negative press. Instead they sought to win public support by launching a publicity attack against the city about a month ago. In one flier, the police and fire associations asked people to attend a December council meeting, but no residents spoke that night about public safety employment.

Talks between the associations and the city about pension reform have been ongoing for more than a year, Syvock said.

mike.reicher@latimes.com, lauren.williams@latimes.com

Twitter: @mreicher and @lawilliams30