LIVERMORE -- The Livermore City Council is moving ahead with a plan to cut its own potential compensation by nearly two-thirds, a change that could save the city more than $150,000 per year starting in 2015.
The idea to move the mayor and council members to voluntary, self-paid health care and life insurance originated from Livermore Mayor John Marchand, who said the time is right to make a statement.
"It's in the best interest of the community," Marchand said. "We all recognize that we're the only part-time (city) employees that are receiving full-time benefits."
Council members agreed on April 28 to go forward with the shift to voluntary health benefits as well as an amendment exempting the council from CalPERS retirement benefits and an ordinance capping salary increases. The council will also recommend a measure for the November ballot to make the changes irreversible barring a public vote.
Adoption of the benefits resolution and introduction of the salary ordinance is set for Monday. If approved, the reduced benefits would take effect Jan. 1, 2015.
Though no council members currently use the city's health benefits, they are offered $2,394 a month to spend on health care. Future council members would still be able to participate in the plans, but would pay for them out of their own pockets.
Administrative Services Director Doug Alessio said the plan would reduce total potential compensation for council members from $45,435 to a fixed $13,007 per year, a 71 percent drop. Potential compensation for mayors would go from a high of $51,320 to a fixed $18,112 annually, a reduction of 65 percent. The plan could mean up to $160,000 in savings per year, Alessio said, which would go back into the city's general fund.
Actual compensation for the average Livermore council member is $17,486, second-lowest only to Danville among Tri-Valley cities, Alessio said. (San Ramon is the highest at $32,354). The changes would move Livermore from second-most to second-least in the Tri-Valley in potential compensation.
"The part that's nice about this is we're leading by example," Alessio said. "This is in line with what we've asked other employees to do, and the council is stepping up and saying 'we should do it, too.' "
A contract amendment with CalPERS would exclude future council members from the state's retirement system for public employees, provided they're covered under an alternative plan such as Public Agency Retirement Services. The exemption would reduce the city's retirement contributions from 21 percent to 1.3 percent of salary, saving up to $950 per month.
"Given all the problems in the state regarding unfunded liabilities, it's important to cap them," said Livermore Vice Mayor Bob Woerner.
A separate ordinance would set salary levels and cap future raises at 5 percent, or the change in the annual Consumer Price Index, whichever is less. The city would also discontinue a $90 cell phone stipend and give each council member a $90 raise, from $980 to $1,070 per month. The mayor's monthly salary would go from $1,400 to $1,490.
Marchand and Woerner will draft an argument supporting a ballot measure which, if passed, would require any future proposed changes to salary structure or benefits to be put to voters to decide.
"We put it on the ballot so a future council can't just arbitrarily bring those benefits back," Marchand said.
Contact Jeremy Thomas at 925-847-2184. Follow him at Twitter.com/jet_bang.