Baltimore City Council members will unveil another proposal tonight to try to solve one of the most contentious — and pressing — issues they face: reforming the police and fire pension system.
If they do not make major changes to the pension program in the next four weeks, the financially beleaguered city will be forced to pay $65 million on top of the $101 million that has been set aside for the plan.
Leaders of the police and firefighter unions, who view cuts to their retirement benefits as a contract violation, increased the pressure on city leaders last week when they filed a federal lawsuit contending that the city had been shortchanging the pension plan for nearly a decade.
Their suit includes a request that the court bar the city from "enacting, executing or enforcing improper and illegal legislation" that would chip away at their benefits.
Councilwoman Helen L. Holton says the bill she plans to introduce tonight is an improvement on legislation she proposed with Councilman William H. Cole IV in April.
"Our goal is the sustainability of the system," said Holton. "We have a responsibility to be fiscally responsible with taxpayer dollars."
While she is introducing the bill at tonight's council meeting on behalf of Mayor Stephanie Rawlings-Blake's administration, Holton said she wrote much of it herself, working "day and night and weekends." She said it represents a compromise between the unions' demands and financial exigencies.
But union leaders refuse to budge on many aspects of the retirement plan.
"There are places where our hands are tied, but we are willing to make concessions on the things we can," said Bob Sledgeski, head of the firefighters' union. "We would be no better than the city if we agreed to break our members' contracts."
Cole, who is co-sponsoring the new bill, said the legal drama would not derail efforts to reshape the pension plan before the fiscal year ends June 30 and the city's payment comes due.
"The lawsuit and everything else have complicated things, but we still have a job to do," said Cole. "I want to be able to look every man and woman in uniform in the eye and say, 'We've preserved your fund. It's affordable. The city can sustain it and we can pay your pension.' "
Cole is also introducing legislation tonight that would increase elected officials' contribution to their pension fund from 5 percent to 7 percent and increase the age at which retirees can draw full benefits from 50 to 55.
Rawlings-Blake asked Cole to research elected officials' pension plans around the region in response to concerns about former Mayor Sheila Dixon's pension. Dixon is collecting $83,000 annually after resigning in February as part of a plea bargain on criminal charges of perjury and embezzlement.
Cole said his bill aims to bring city elected officials' benefits in line with other jurisdictions. But he stressed that the elected officials' pensions cannot be compared with those of the public safety officers because city fire and police officers do not contribute to or collect Social Security.
The new fire and police pension bill would delay retirement age, but not as much as in the earlier proposal. Under the new measure, public safety officers could retire after 25 years or service or upon turning 55, as long as they have at least 15 years with the department.
Employees who already have worked 15 years would be grandfathered in under the existing retirement requirements, allowing them to collect full benefits at either age 50 or after 20 years of work.
More than 100 police officers and firefighters have threatened to leave the department if the retirement age were increased substantially. Union leaders say the hazards and physical demands in fire and police work necessitate an earlier retirement than most jobs.
The new bill would leave largely untouched a lucrative benefit that the city has used as an incentive to entice those approaching retirement to work for a few more years. Public safety officers with more than 15 years with the department would be eligible for the benefit, known as "Deferred Retirement Option Plan 2" or "DROP 2" after 20 years of service. Those with fewer than 15 years would be eligible after working 25 years.
The previous proposal, which created a "DROP 3," angered union heads who had hammered out the "DROP 2" system after extensive negotiations with city officials last year.
The new bill would handle the most costly aspect of the pension dispute — a variable benefit that bolsters payments during good years, but does not bring them back down during bad — in much the same way as the April proposal.
Both proposals would abolish the variable benefit and replace it with a set cost-of-living increase, capped at 1 percent for those between the ages of 55 and 65 and 2 percent for those older than 65.