The Culver City City Council recently approved labor contracts for many city employees that radically alter their retiree medical benefits. Culver City Vice Mayor Scott Malsin argues that the adopted policy will cause many valuable and experienced employees to retire prematurely and that the policy should be changed immediately. This piece is the first of a three-part series by Malsin examining the issue in depth. 

Don’t Jeopardize the City’s Most Valuable Asset: Its Workforce

by Scott Malsin, Vice Mayor

(the first of a three-part series)

One of the greatest distinctions between Culver City and surrounding areas is the quality of service we enjoy. That quality of service is being jeopardized by a policy the city is pursuing that can – and should – be changed.

The city has offered its current retiree medical benefit plan for years. In an effort to reduce a financial liability created over several decades, the city council is presenting longtime employees with a stark choice: retire by December 31st and retain your existing benefits or your health insurance benefits will be significantly cut as of January 1st.

A calculator on the city’s intranet allows employees to figure out what this change will mean for their families. For many long term employees the choice is quite clear. They are better off retiring. As a vested city employee, my family and I are facing that choice too.

A large proportion of our Fire and Police command staff – Sergeants, Lieutenants, Captains and Chiefs – is likely to depart. People you know and have come to depend on will be gone. Soon. So will many other employees who make Culver City a great community. They will retire by the end of this year because they will lose a significant part of their benefits if they are working here on January 1st. We have drawn a line in the sand.

And it’s not as if we’ll save a dime, because we will still be paying these new retirees their benefits as well as the benefits of those who we will hire to replace them.

For employees who cannot afford to retire by the end of 2011, the consequences are harsh. They have no choice but to accept the inevitable and imminent loss of a significant portion of their benefits. Benefits they counted on when they chose to work for Culver City. They too have served our community for years and have planned their future on promises made in black and white. I do not think it is right to break our commitment to them.

An incredible amount of knowledge, skill, and dedication will be lost. A great deal of the “institutional memory” which keeps us from repeating the mistakes of the past and helps us build on our successes will be gone. The morale of our workforce will be devastated. The city will be in a costly scramble to hire and train replacements. We will face increased legal liability costs and slower emergency response times. Our workforce will be less knowledgeable about Culver City and less invested in our community.

Rather than drawing a line in the sand, I believe the City should implement a policy that “grandfathers” older employees in rather than forces them out. We should “grandfather in” employees who are within 5 years of retirement age, and phase the current benefit out gradually for the rest so that they can plan and save for the future.

The council has based its decision on an incomplete analysis of this issue. It doesn’t take into account a variety of costs we will incur if we continue on our current course, and it doesn’t take into account the short- and long-term impact on our city services. It certainly doesn’t take into account the impact on the lives of people whom I consider to be an integral part of our community.

While the city’s analysis is currently confidential, I have requested the underlying data, which is a matter of public record. If the city releases it, I hope to be able to provide a third-party evaluation so that you can see for yourself.

This is a matter of dollar value AND core values, values which I have fought for since my first day on our city council. It’s important to maintain the operational integrity of our city, and it’s important to treat our employees with respect. The cost is modest and the benefits are substantial.