City officials consider seeking legal judgment to block union challenges to public safety fund reforms

Disturbed by the number of union lawsuits and grievances challenging voter-approved reforms to Portland’s public safety pension and disability fund, city leaders are considering asking a judge to ban collective bargaining over these firefighter and police benefits.

“It may be a long shot, but it’s an option,” said Commissioner Dan Saltzman, who helped shepherd many of the reforms.

Attorney Hank Kaplan, who has filed several of the legal challenges on behalf of the Portland Fire Fighters Association and the Portland Police Commanding Officers Association, called the proposal “political grandstanding.”

“Frankly I don’t understand what the purpose of all this is about,” Kaplan said, noting that the city has lost most, if not all, of the legal challenges. “We have suggested to the city that we go back to resolving things by talking about them, rather than using the very blunt instrument of litigation, but they haven’t left us much choice.”

The proposed resolution, which was pulled from Wednesday’s City Council agenda and set over for another week, said the police and fire labor unions’ legal challenges¬† “threaten to undermine the authority” of the Portland Fire and Police Disability and Retirement Fund’s board of trustees and could affect the fund’s financial footing.

It would ask for a finding that Portland’s public safety pension and retirement system be considered “on equal footing” with the state’s public employment retirement system, and make retirement benefits “prohibited subjects of bargaining.”

The unions repeatedly have argued that changes made to the fund’s benefits are mandatory subjects of bargaining.

Kaplan contends the state legislature can exempt PERS from the state collective bargaining act, but the city can’t do the same for its public safety fund.

The city’s public safety fund is unique among public pension funds because it is financed by Portland taxpayers through annual property taxes. Each year, the city sets the tax in an amount equal to the fund’s administrative expenses and benefit costs.

Since voter-approved reforms in 2006, new officers and firefighters hired after Jan. 1, 2007, are placed in the state’s Public Employee Retirement System.

A package of charter reforms that voters approved in 2012 affect how the fund calculates police officers’ and firefighters’ pensions, and also delayed eligibility for disability benefits until police or firefighters had at least six consecutive months on the job.

Before 2012, Portland police and firefighter pension benefits were calculated based on the highest pay “earned” during any of the employee’s last three consecutive 12 month-periods before retirement. That interpretation of the city charter allowed a member’s final pay to include more than a year’s worth of wages, and could boost final pay by nearly $4,000 a year.

The change approved by voters made sure final pay is based on a pay actually “received” during the 365- or 366- day period prior to retirement.

Before the reforms, if a union finalized a new labor contract after a firefighter or police officer retired, the pension fund would go back and adjust the retiree’s payout based on the higher pay rate. In 2012, voters approved a reform that would only allow the higher pay rate to count if it was in effect during the retiree’s final pay period.

A second major change in 2012 required a new officer or firefighter to be on the job six consecutive months before they’d become eligible for disability benefits. Before that, if a new officer or firefighter was injured during training and would never be able to return to work as a cop or firefighter, that trainee was granted at least 25 percent of their salary, including cost-of-living increases until retirement even if they found work in another profession.

The police and fire unions have filed lawsuits, grievances and unfair labor practices against the city and the fund, contending that the reforms shouldn’t have been adopted without mandatory bargaining. In many cases, the unions have prevailed.

Now, the city wants its attorneys to seek a declaratory judgement from a circuit court judge or the state employment relations board that would exempt the city’s public safety fund benefits from collective bargaining.

Saltzman said he is looking for a way to resolve these issues “holistically” instead of dealing with them piecemeal, and considers this one way to do that.

Union presidents are talking with council members to try to understand why the city would make this move.

“I wish the city would decide it’s worth sitting down and talking about these things before they take action,” Kaplan said. “We’re all sitting here scratching our heads.”

Two legal challenges are pending before an arbitrator: one brought by the Portland Police Association regarding calculation of officers’ final pay for pensions , and one by the Portland Fire Fighters Association regarding what happens to an ex-spouse’s share of a member’s pension when the ex-spouse dies.

These are among the cases the city has lost:

–¬†In December, the Oregon Court of Appeals upheld a state labor panel’s order to “make whole” former city firefighter Tom Hurley for the years of service he lost to calculate his pension when the city cut off his disability benefits in 2007.

–¬†In November, the Oregon Supreme Court ruled largely in favor of six firefighters involved in a six-year squabble with the city of Portland after they were forced back to light duty work and had their disability benefits terminated.

In March 2014, the fund moved to pay up to $2.2 million to a class of retired firefighters to settle legal claims that driver premium pay should have been calculated into their pension benefits.

–Maxine Bernstein

mbernstein@oregonian.com
503-221-8212; @maxoregonian

http://www.oregonlive.com/portland/index.ssf/2015/07/city_officials_to_consider_see.html