Unions say city can’t yank perk 

With tens of millions of public dollars at stake, unions representing city of Springfield employees have sued the city seeking to overturn a city council decision ending a pension-fattening perk that municipal officials say is unique to the capital city.

Since 2003, city workers have been allowed to accumulate, then cash out, two years’ worth of vacation in the year prior to retirement, inflating the salary for that year, which is used to calculate pension benefits. In 2012, state law changed so that the Illinois Municipal Retirement Fund can bill municipalities that gave salary increases in excess of 6 percent for the difference in pension benefits due to salary increases over the 6-percent cap.

Since IMRF started billing the city in 2012 for what the state deems excess benefits, Springfield has paid more than $3.5 million, city officials say. The city calculates that future payments could total $44 million over time for employees now eligible for IMRF benefits.

“It’s something the city and the taxpayers can’t afford,” says Mayor Jim Langfelder.

But unions say the city has no choice. In the lawsuit filed Oct. 16 in Sangamon County Circuit Court, five unions that represent city employees argue that the city cannot unilaterally eliminate the vacation buyout provision that swells pensions because doing so violates the state constitution’s provisions that membership in a pension system is a contractual relationship and that pension benefits, once granted, cannot be diminished.

Don Craven, attorney for the unions, says that unions have also filed an unfair labor practice complaint before the state Labor Relations Board.

“We plan to push ahead with that litigation,” Craven said. “It is our contention that there’s a duty to bargain over wages, hours, terms and conditions of employment.”

Ward 7 Ald. Joe McMenamin, who voted in favor of eliminating the vacation buyout perk last summer, said he thinks that the city should try eliminating the provision via the collective bargaining process. The provision would be eliminated in the spring of next year under the ordinance passed by the council in July.

“The general rule is, whenever you alter a term and condition of employment, whether it’s in the union contract or not, you have to at least sit down and discuss it with the union,” McMenamin said. “We’ve got so much at stake. I think there’s time for our labor attorney to sit down with the union attorney and discuss it.”

McMenamin, long a critic of escalating city pension obligations, said the vacation buyout perk creates a so-called pension spike for employees that taxpayers can’t afford. Approved by the city council in 2003 as a means of encouraging employees to retire early, the vacation buyout ordinance approved during the early months of former Mayor Tim Davlin’s administration has no end date.

“The spike has extreme cost and is unnecessary,” McMenamin said. “It started out as an early retirement plan with no sunset, and it’s an example of free-spending, irresponsible government back in 2003.”

Langfelder said he’s not a fan of early retirement plans, which he says have not worked to reduce the cost of government.

“Early retirement is to reduce head count and payroll,” Langfelder said. “Usually, an incoming administration fills those positions. … I was kind of surprised that this one never sunsetted.”

Langfelder disagreed with McMenamin, saying that he believes the city can unilaterally end the perk since it was never instituted as part of a collective bargaining process. By contrast, he said, pension-sweetening provisions in contracts covering police officers and firefighters were created and later abolished as part of negotiating collective bargaining agreements.

“It’s not something, in our estimation, that’s negotiable,” Langfelder said. “It was a perk that was given out and should have been sunsetted and never was.”

Contact Bruce Rushton at [email protected].