When it came time to negotiate their new contract, Eureka police officers were ready to play hardball.
The Eureka Police Officers Association, the union that represents the city's rank-and-file officers and dispatchers, had seen its last round of contract negotiations result in concessions. And even after campaigning hard for Eureka's temporary sales tax increase, Measure O, and its successor, Measure Q, which have brought millions of dollars into city coffers, officers began 2016 with less spending power than they'd had four years earlier. Officers were also wary of seeing their compatriots leave EPD for greener financial pastures, leaving the department perpetually understaffed and in flux.
So, in sharp contrast to past negotiations, when union leadership negotiated directly with the city, EPOA entered negotiations about six months ago having retained the high-powered law firm of Rains Lucia Stern, which bills itself as the "ultimate backup" for officers and unions and has seven offices throughout the state. In another unprecedented local move, EPOA also hired a forensic accountant to pore through the city's books.
What the audit found is basically what the city maintained throughout a tough budget cycle last year — it's broke, struggling to hold the line on services in the face of steadily increasing pension, healthcare and liability costs. "We knew early on that the city was in a little bit of trouble," explained EPOA President officer Terry Liles. "It would have been a different deal if the city had a $5 million bond sitting off somewhere, or money hidden somewhere, but that's kind of why we hired a forensic investigator to figure that out. ... We got to a point where we just felt the city didn't have any more to give us and it wouldn't be responsible for us to ask for more."
After months of negotiating and about a year of working without a contract, EPOA reached a final deal with the city earlier this month. The three-year memorandum of understanding includes some modest wins for the union but is unlikely to leave anyone celebrating. In fact, the deal is going to cost officers money before they see a bump in pay.
This is a huge benefit for the city, said City Manager Greg Sparks, explaining that the contract allows the city to pay down some of its pension obligations in the short term and doesn't commit it to increased salaries for another year and a half. The hope, he said, is that sales tax revenues — on which the city is hugely reliant — will continue to trend upward, leaving the city in good position to meet its future obligations.
Specifically, the new contract will see EPOA members immediately begin paying an additional 1 percent toward their retirements. Cost of living adjustments — 1 percent raises to go into effect Jan. 1, 2018 and Jan. 1, 2019, for a total bump of 2 percent — will follow. And, crucial to getting EPOA to sign onto the deal, the city will also institute longevity bonuses in May of 2018, at which point employees with at least five years with the department will receive an additional 1 percent raise; employees with at least 10 years with the department will receive an additional 2 percent raise and employees with 15 years of experience will receive an additional 3 percent bump.
The hope, Liles explained, is that the longevity bonuses will aid the department in retaining the officers it hires and trains, which has historically been a huge problem. According to Liles, only eight officers on the force have been here more than a decade while 23 have policed Eureka for fewer than five years. Some of the attrition issues the department faces are clearly financial — a sergeant just gave notice that he's jumping ship for the Redding PD, where pay tops out about $15 an hour above EPD's.
In fact, according to analysis by the Sacramento Bee, the average cop in California made $80,800 in 2014, not including overtime, bonuses and benefits. In Eureka, officers are currently capped at $75,180, and start at just over $48,000. Of course, base pay is only part of the equation and a significant part of Eureka's current financial squeeze has to do with pensions, and not just those of its officers.
The city is in the midst of a five-year squeeze imposed by the Public Employees' Pension Reform Act of 2013, a pension belt tightening mandated by the state in the face of a looming statewide crisis brought on by pension fund investments torpedoed by the great recession. PEPRA, as the act is known, requires municipalities to begin paying down their unfunded pension liabilities over a five-year period, beginning in 2015-2016. Even without the added PEPRA payments, Eureka's police pension costs are already huge; as of 2014, it contributed 42 percent of officers' plans. That means for every $1 a police officer was getting in salary, the city was paying another 42 cents toward his or her pension. (EPD employees fall into two pension categories: longer-tenured officers are eligible for a 90 percent pension at 50 if they've worked 30 years on the force; newer employees are eligible for an 81 percent pension at 55 if they've worked 30 years on the force.)
But aside from those costs, thanks to the stock market's near collapse in the late 2000s, Eureka had also amassed a $13.2 million unfunded police pension liability entering last fiscal year. Under PEPRA, that meant the city had to pay more than $900,000 back into the system for its police department alone last year. And that number will steadily increase until it hits $1.4 million in 2020-2021.
It's these numbers, and similar ones in the fire department, that caused the city to face its day of fiscal reckoning last year, when the police department cut almost $1 million from its budget to help the city erase a $2 million structural deficit. Sparks said it appears brighter days are ahead, with a budget that's now in balance and revenues trending upward. But a city as heavily dependent on sales tax revenue as Eureka — it's projected to account for 64 percent of the city's general fund revenue this year — is always susceptible to the whims of the national and state economy.
According to Sparks, the city must proceed cautiously, especially when committing to increased compensation packages. In the short term, at least, that means EPD will have to look at other ways to recruit and retain officers.
EPD Chief Andy Mills said the department is already doing that. Mills said he regularly goes to police academy classes and tries to sell cadets on the experience gained by policing Eureka, where patrol officers can field 30 or more calls in a day. "I tell them, if you want to learn policing with urban problems, come to Eureka," Mills said. "You'll learn more in one year policing here than in 10 in any of the other cities around here."
And when it comes to retaining officers, Mills said EPD recently used community donations to give its break room a facelift, with new cabinets, new paint and some couches, noting that "some of those things matter." Additionally, he said the department has launched an officer wellness program aimed at helping employees navigate the pitfalls and pressures of the job, and that he's looking into starting a sabbatical program that would give officers the chance to spend a couple of paid weeks a year travelling to other departments to learn new skills and research best practices.
Mills said his officers, as well as fire personnel, "carried the ball" of getting the city's recent tax measures passed, staving off devastating cuts to services. Additionally, he said, officers have adapted quickly to the new philosophy and culture he brought with him when he took the position a few years ago. "They've made that change and I think they earned everything they got," Mills said. "I just wish we had a lot more to give them."
That ball is now in the city's court, according to Liles, who included a line in the EPOA press release announcing the new contract noting that EPOA members don't feel they are being compensated at a "level commensurate with their service and dedication" and hope the city will plan accordingly to pay them what they deserve.
"The reason the press release is written the way it is is because we want the city to start looking forward three years," Liles said. "If I want to go out and buy a new car, I have a choice: I can either go out and put it on credit or I can save for it and plan for it. I think that's something they have to figure out."