In 2011, however, the city manager announced the city was “going to renege on its contractual obligation” which was previously promised and “used to induce the acceptance and retention of employment,” the lawsuit stated.
Since July 2011, the employees have had to pay part of the 8% employee pension contribution, with the city’s goal being for the employees to eventually pick up the full 8%.
According to City Manager Mark Scott, the practice is becoming standard in the public sector as cities across California look for ways to save money. For Burbank, the method has reportedly translated into hundreds of thousands of dollars’ worth of savings, Scott said.
“Being able to make these agreements with virtually all our bargaining units has allowed the city to stay solvent to the point where we haven’t had to reduce service levels like so many other cities have,” Scott said.
He added that the city was “very unhappy” about the lawsuit, which came as a shock.
“It’s an expensive way to try to have a conversation,” he said.
But the union argued that the requirement is illegal, and reduces its members’ salaries and retirement benefits.
“Once the city attorneys performed services in reliance on the city’s contractual promise to provide the PERS benefits on retirement, the city is contractually bound to honor that obligation,” the lawsuit states.
The union is seeking recovery of the “wrongfully deducted monies,” plus interest, along with a declaration that the city’s action is illegal and injunctive relief prohibiting the practice in the future, according to the lawsuit. The lawsuit lists five causes of action, including breach of contract.