Tuesday, April 12, 2011

When the Mayor Speaks....It can be a Head Scratcher.

The mayor addressed the Downtown Rotary Club on Monday, April 4th, and when asked about the status of the city pension system, he talked about spiking. He did state the pensions were funded and the system was healthy so why bring up spiking in this venue? Was this a seemingly benign comment? Who knows what his intent was when he made the comment.  

The city is about to enter into labor negotiations with the 3 unions representing general, police and fire non-management employees.  Incite the public against public employees and their benefits? I hope not.

Discussions regarding the city’s position and the union’s position at the bargaining table are tightly held within the confines of the bargaining table and are not discussed in the public arena. Why then does the mayor bring up the issue of spiking of pensions in a public meeting? 

The term “spiking” is not easily understood by the general public. The term itself causes people to grimace and question what is going on. It is a complicated issue dealing with employee benefits and what constitutes annual compensation. You can rail against unions and their impact to the workplace, but it doesn’t change the fact the majority of city employees are represented by a collective bargaining agreement with the City of Sioux Falls.

Many changes have been made over the years regarding the impact spiking has on the general operating budget and the pension benefit. Significant changes were made in 1981, 1983 and in 1997 and, at times, created very heated discussions between management and labor at the bargaining table. Is there room for more change? Probably, but the public setting is not where you begin the discussion when you are bound by collective bargaining laws both at the state and the federal level.

The bottom line is…. Employee benefits are a mandatory subject of bargaining. Pension benefits and what defines annual compensation are subject to city ordinance and state law whereby any change to the pension benefit requires an actuary study and a vote of the membership in the pension system.

That's why it’s a head scratcher that the mayor brought the subject of spiking up in a public forum at a time when he will be sending officials to the bargaining table to bargain for wages, hours and conditions of employment with its non-management employees represented by 3 separate unions.  

The mayor should quit talking about what he thinks is wrong with employee benefits at this most inopportune time. This is one area where his “business acumen” and corporate business background in marketing and banking don’t bring anything to the table of experience in city collective bargaining with unions.


  1. The term “spiking” is not easily understood by the general public. The term itself causes people to grimace and question what is going on.

    The reason it is not easily understood is the concept goes well beyond what the typical Sioux Falls employee experiences. As was discussed in an earlier blog entry Mayor Hanson ended the practice in '97. I suspect there are fewer than 80 employees left who will enjoy the gift that keeps on giving...spiking. Do they have it coming? By contract, yes they do. But by any other measureable aspect? Maybe not so much. At any rate, it's in the past, and Mayor Hanson fixed it. Yes, honest mike bringing it up is a head scratcher. But what isn't with this guy?

    Now pensions? Be great if everyone could have one. But simply not the case. For a lot of reasons. That's where the disconnect lies. Damm few get 'em anymore, and those that don't wonder why their tax dollars fund have to fund them. Natural for them to be upset.

    Pensions are healthy in the city. And why not? Take the Fire Department for example. A needed service. Certainly. But at what cost? Right now we have 194 city firefighters who are budgeted $12,680,832 in basic salary for 2011. That's an average of $65,365 per employee. Seems fair enough considering their job. But what sets it apart? Pension sets it apart. Add another $4,090,267 of taxpayer dollars to fund it. That's another $21,083 per year per employee. Heck, that's more than a whole lot of jobs in this town pay in basic salary. Add another over $2,000,000 in fringe benefits and the average of all 194 SF firefighters is $98,050 per man. Sustainable? Be nice if it were. But it is not. In just three years with the same amount of personnal the department has swelled from a little over $16,000,000 a year to over $19,000,000 a year in employee compensation. Unsustainable, especially in a city when the median income of Joe SixPack hovers at $14.00 an hour.

    All numbers as per the city 2011 budget.

    Polly Amalo

  2. Polly
    I retired after the turn of the century and was allowed to spike. Therefore your Assumptions credited to Mr. Hanson are incorrect.

  3. Anonymous said...
    I retired after the turn of the century and was allowed to spike. Therefore your Assumptions credited to Mr. Hanson are incorrect.

    Spiking started in '74 under Knobe. It ended in '97 under Hanson. All new hires after '97 are under a different format for turning in accumulated sick leave hours. Spiking is not included. Spiking was bargained for, and won by the union in good faith during those years. Those hired up until '97 still enjoy the perk at retirement time. Not many are left. I'd guess around 70 to 80 who will yet spike their monthly retirement pension check.

    Polly Amalo

  4. All citizens have a Right to Know and Understand this issue. It should not be kept secret or behind closed doors. Public employees. PUBLIC.