The Oxnard City Council approved a significant increase to health care contributions for firefighters on Tuesday, a move that followed a similar agreement made for police officers.
The higher payments to public safety health insurance comes as the city faces impending employee layoffs and a $9.2 million gap in its general fund.
Under the contract with the International Association of Firefighters, which was approved unanimously, the city will pay $1,543 per month in healthcare costs by 2021, representing a 350% increase from current levels. In March, council also approved a police contract that represented a 350% increase in medical contributions by 2021.
Firefighter salaries will remain the same under the new contract but city medical contributions will become more in line with neighboring agencies.
Currently, the city pays $343 in monthly medical costs compared to $1,023 in Ventura and $1,855 in Simi Valley.
“We’re doing our best to minimize actual raises,” said City Manager Alex Nguyen. “What we as an administration are committed to is fixing the medical problem. The fact is that across the board, our medical premiums are extremely low and that’s where we’re not competitive with our surrounding communities.”
Last month, Nguyen notified all City Hall employees that layoffs are unavoidable in the spending plan that council will have to approve in June. He did not say how many will be affected.
During the public comment portion of Tuesday’s City Council meeting, members of the Service Employees International Union urged council members to consider alternatives to layoffs.
SEIU Local 721 represents 280 employees in Oxnard who work as librarians, crime analysts, recreation leaders and other positions.
Coral Itzcalli, spokesperson for the labor union, said Wednesday that laying off workers is a “knee-jerk reaction.”
“We often see city officials always find money for all sorts of things but when it comes to keeping libraries open or having after-school programs, those are things that get slashed and burned,” Itzcalli said.
Doug Stuart, president of the firefighters union, said it’s unfortunate that there will be layoffs in the future.
“It’s nothing we’d like to see,” Stuart said. “I don’t, however, apologize for the fact that our members need health care.”
Stuart said in previous years, firefighters have left Oxnard for better salaries and benefits elsewhere. He said it’s a bad investment on the city’s part to train firefighters only to have them leave.
All seven on the council supported paying more for public safety healthcare but some had reservations.
Mayor Tim Flynn said he hopes the salary increases in the form of health care contributions aren’t subsidized by layoffs in other departments.
“Everybody deserves a raise. The question is: Can we afford it? I would say we can’t afford it, but we have to stay competitive,” Flynn said.
Flynn said he’s concerned about the timing of finalizing these employee contracts with layoffs on the near horizon.
“I just hope it doesn’t come to bite us in the wrong spot,” he said.
Rising pension costs are expected to eat away at any slight uptick in revenue the city is expecting in the coming fiscal year.
For a city with a general fund totaling $134 million, an increase of less than $2 million is mostly awash. The anticipated increase pales in comparison to the spikes in pension costs. Pension increases are more than three times the projected revenue increase, according to Chief Finance Officer Kevin Ripper.
That means, without any significant cuts to the upcoming budget, Oxnard’s rainy day funds could soon dwindle down to less than $6 million, or 4% of its expenses. Ideally, City Council wants to keep a general fund reserve of 18%.