Pay Raise, Pension Cut Request from Mission Viejo City Staff

The amount the city pays its workers and the amount those workers pay for pension contributions could change during a Mission Viejo City Council meeting 5 p.m. at City Hall, 200 Civic Center.

The city staff suggests that the Mission Viejo City Council approve a plan to raise salaries by 2.63 percent, effective in 2012. The plan would also require city workers to contribute more to their own retirement plans.

The net salary increase, minus the pension costs borne by workers, would total 1.38 percent.

Under the new compensation plan, city workers would incrementally increase their own contributions to their retirement plans. By the 2014-15 fiscal year, city employees would pay 8 percent of their share of their Public Employee Retirement System plan. They currently pay 3 percent of their PERS plan.

The plan would eventually cut the city's payroll budget by 4 percent once employees switched to a new payment tier, according to a staff estimate.

Over the last 2½ years, city employees have taken a 2 percent pay cut, and no pay increases have been approved. The city saved another $1 million per year by reducing 12 full-time positions.

Under the proposed plan, city worker pay would be directly related to changes in growth to the city's property taxes and sales taxes. Depending on what the city brings in from taxes, worker pay would either increase or decrease by 1.25 percent.

Further details of the payment plan can be found on the council agenda.