The current recession has opened the door for pension reform at Simi Valley City Hall.

Last week, the city and the union representing its 268 general unit employees reached agreement on a new labor contract that will save the city nearly $2 million over the three-year life of the deal, thanks largely to changes in employee benefit plans.

After weeks of negotiations between the two sides, members of the City Council at their July 12 meeting thanked the members of the local Service Employees International Union for their cooperation in trying to reduce costs.

“It seems like they’re there for us time in and time out, especially in these tough economic times,” said Councilmember Steve Sojka of the union that represents everyone from bus drivers to city planners. “We worked together to come up with an agreement that’s going to help this city sustain the road that we’re on, and it’s a bumpy road right now, but it’s one that we’re able to weather because of their help.”

That help included the SEIU’s making significant concessions concerning employee retirement plans. Under the terms of the new agreement, current employees will contribute 3.97 percent and all new employees—hired on or after July 1, 2010—will contribute 7 percent of salary to the California Public Employee Retirement System (CalPERS).

The change is expected to save the city $1.65 million.

In the past, city employees paid nothing into CalPERS; the city picked up the employee’s full share of 7 percent in addition to paying the employer’s share.

While the city will continue to pay into current employees’ retirement plans—a contribution of 3.03 percent —the city will not contribute any funds to CalPERS for new employees.

Bernard Felder, president of the SEUI Local 721 chapter, said that this negotiation process was the most difficult in recent memory due to the recession but that he feels the general unit ended up with a fair contract under the circumstances.

“In a way there was some hard feelings, you know, because nobody really wants to pay into PERS,” said Felder, a collection system technician in the sanitation division who has worked with the city for 21 years.

But he said employees knew some sacrifices needed to be made and it was the lesser of two evils.

“When we had everything on the table, it was either take a cut in salary or contribute to PERS and the board figured that if you took a cut in salary it would hurt you because you would never ever see that money again, whereas with PERS, when you retire, you will see that money,” Felder said. “So a lot of them felt this is the way to go for right now.”

Mayor Pro Tem Glen Becerra said the new contract makes Simi Valley a leader in dealing with the issue of pension reform.

“It’s not an issue that people really want to have to deal with because you’re talking about people’s retirements, their golden years, and (the general unit) stepped up to the plate in a big way taking on some of this retirement cost that will have a long-term impact on our city,” Becerra said.

He added, “They took no raise for three years and no cost-of-living adjustment or anything, and you can’t say how important that is right now that they would be willing to tighten their belts with us.”

Also in the contract is the elimination of retiree medical benefits for newly hired employees. The city will, however, contribute 1 percent of total salary compensation of all general unit employees toward the existing retiree medical program for the benefit of current employees.

SEIU workers also agreed to take a reduction in holiday pay.

Altogether, the provisions mean a total annual savings of $666,213 for the city over the next three years.

Councilmember Michelle Foster, calling what the general unit agreed to do for the city “remarkable,” said she hopes the new contract will set a precedent for neighboring cities and communities across the state.

“I think it really shows that people who work for the city and the government are doing it because they serve the communities they live in,” she said. “Sometimes it’s more than just the value of what they take home every week but the value of the work that they do, and we really appreciate that.”

The term of the contract is July 1, 2010 through June 30, 2013.

A new agreement for the city’s unrepresented management group was passed with the fiscal year 2010-11 budget last month.

Included in the management concessions were a 3.38 percent across-the-board salary reduction and a conversion of the current retiree health benefit to a defined contribution plan for new employees.

The Police Officers Association (POA), which represents Simi’s sworn officers below the rank of lieutenant, is still working under an existing contract that expires in December. Formal negotiations on the next contract will not begin until the fall.

However, Assistant City Manager Dan Paranick said the city is talking with the police union right now to discuss issues concerning its current contract. He said the two sides began discussions about three weeks ago.