At its June 20, 2011 meeting, the Ann Arbor city council gave initial approval to purely technical changes to to a change to its ordinance on retiree benefits for non-union employees. For example, the phrase “three years” was revised to read “36 consecutive months.”
These were not, as the initially published version of this brief indicated, the changes to the pension ordinance that had been described in a resolution passed at the city council’s June 6 meeting.
Under the planned ordinance changes for the future, for new hires after July 1, 2011, the final average contribution (FAC) for the pension system would be based on the last five years of service, instead of the last three. Further, employees would be vested after 10 years instead of five, and all new non-union hires would be provided with an access-only style health care plan, with the opportunity to buy into whatever plan active employees enjoy.
The council will need to give a second and final approval of the technical changes to the ordinance change, after a public hearing, at a future meeting.
At its June 6 meeting, the council had passed a resolution directing the preparation of the ordinance change for non-union employees, and expressing an aspiration to eventually extend the same policy to union workers. At that meeting, chief financial officer Tom Crawford stressed that the potential savings to the city would not be realized immediately, but rather five to seven years in the future.
Also at the June 6 meeting, mayor John Hieftje attempted to head off potential criticism that such a policy should have been enacted sooner, by pointing out that the city had reduced the size of its work force over the last several years and had made few new hires in recent years.
In response to a request from The Chronicle, the city provided data on new hires made by the city since July 1, 2006. Of those 121 new hires, 49 are non-union positions; they would have translated into savings had the policy been enacted five years ago.
This brief was filed from the city council’s chambers on the second floor of city hall, located at 301 E. Huron. A more detailed report will follow: [link]