City of Poughkeepsie cops aren’t getting a pay raise in 2009–a decision likely to raise local property taxes for decades to come.

In exchange for no raises in 2009, the city agreed to pay 100 percent of health insurance costs for police officers after they retire if they’ve accumulated 165 days of unused sick time, according to the Poughkeepsie Journal (here).

In the previous PBA deal, Assistant Corporation Counsel Paul Ackermann said the city covered 85 percent of officers’ medical costs after they retired–if officers forfeited 193 unused sick and other days they would have been paid for when they left the force.

The long-term cost of the retiree sweetener could be considerable, especially considering that many police officers retire in their forties. The contract, approved by the Common Council last week, comes as new accounting rules (known as GASB-45) spotlight the unfunded liabilities local governments, school districts and state governments incur in promising health insurance to their retirees.

The City of Poughkeepsie spent $487,000 on health benefits for 141 retirees in 2007, according to its latest official statement posted online. It does not include an estimate of long-range GASB-45 costs.

Under the terms of the new contract, the 105-members of the Police Benevolent Association will receive no raise in 2009, a 3 percent raise in 2010 and a 4.1 percent in 2011. “Ackermann said the PBA also agreed to contract language that lets the city negotiate better insurance rates,” the newspaper reports.

In contrast, the City of Lockport succeeded in getting three employee unions to agree to a specific reduction in retiree health care costs as part of new contracts, the Buffalo News reports.

A key factor is the ability for the city to shift retirees into a less expensive Medicare Advantage health insurance plan, Mayor Michael W. Tucker said.

The city has about 150 living retired workers, and the premiums on the Medicare Advantage plan are far cheaper than the existing BlueCross BlueShield plan, Tucker said.

Anticipating the move, the Council reduced health insurance estimates by more than $600,000 during its preparation of the 2010 budget last month.

Under the terms of the five-year union contracts, Lockport employees will receive no retroactive raise for 2008 and 3 percent raises in each of the next four years. The Common Council is to vote on the police contract December 2. It has approved contracts with the administrative and blue-collar unions. (Department heads will receive a raise for 2008.)

The Lockport contract also allows the city to privatize its garbage service.

“I think that’s pretty big for us. I have to commend the AFSCME union,” Tucker said. “For them to give up the garbage, it’s huge for our city. They were a great team player.”

Originally Published: NY Public Payroll Watch

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