A GROUP of Pacific Grove residents has begun circulating an initiative in hopes of rescinding a generous pension plan awarded to the city’s police officers and firefighters a decade ago. In May, a subcommittee determined that the plan was adopted illegally.

In October, Dan Davis and John Moore announced they were launching an effort to void  the “3 percent at 50” plan that was adopted in 2002 by the city council. State law requires at least 10 percent of the voters who cast ballots in the last election to sign the petition. If they do, a referendum on the pension plan would be put before the electorate next year, or “the city council has the option of [rescinding the plan] without putting it on the ballot,” Davis told The Pine Cone.

Davis said volunteers have begun circulating the petition at locations such as SaveMart, Grove Market, the post office and the P.G. farmers’ market. Though the elections office requires them to collect about 950 signatures, Davis said they’ll try to gather about  1,500 to allow for signatures that can’t be certified.
“We have until the end of February to qualify the initiative,” Davis said. “I don’t think we will have any problem.”

Davis and Moore and a subcommittee composed of several city council members contend the April 2002 council’s decision to boost the CalPERS plan for P.G.’s public safety employees was adopted unlawfully because a public hearing wasn’t held and crucial financial information on how much the increase would cost the city was not disclosed.

“The public and the council were misled,” Davis said.

The staff report given to the 2002 council indicated the cost of amending the pension contract for police officers and firefighters would be $51,500. What the staff report failed to disclose was that figure was merely the cost of amending the contract, not the cost of the pension plan itself. Davis said the plan actually cost the city about $800,000 per year.

“The failure to publicly reveal the future annual costs ... was a clear violation of state law,” according to the initiative.

Davis was on the 2002 council and voted in favor of the ordinance to amend the pension plan — which was on the consent agenda, and wasn’t debated at all — during the first reading. He was absent at the meeting when the council cast its final vote for the plan.

Three percent at 50 means public safety workers at least 50 years old can retire with pay equal to 3 percent of their highest year’s compensation for every year they worked, to a maximum of 90 percent of their highest pay level. The plan had been at 2 percent at 50.

The formula, adopted by many cities in California, has led police officers and firefighters statewide to retire with hefty retirement plans, plans that have proven to be a financial burden to municipalities and counties.

In early 2009, via a public records request, an unidentified P.G. resident found a Dec. 17, 2001, financial report from a CalPERS actuary about the then-proposed pension increase that detailed the cost implications to the city in adopting the plan, but which was kept under wraps and never presented to the 2002 council.

“This report clearly showed that the future annual costs of this contract amendment was estimated to exceed $805,000 (23.7% of salary costs) one year after adoption,” according to the initiative.