News Column

Modesto City Council OKs streetlight loan, police pension changes

August 13, 2014

By Kevin Valine, The Modesto Bee



Aug. 13--The Modesto City Council on Tuesday unanimously approved applying for a $3 million state loan to replace streetlights with energy-efficient ones that will cut the city's electric bill. It also approved changes with the Police Department's managers and supervisors that will result in the officers paying more for their pensions while receiving specialty pay.

The loan application will be with the California Energy Commission, which provides 1 percent loans to local governments for energy-efficiency projects. A commission spokeswoman has said it could take Modesto about two years to receive the loan. The maximum loan is $3 million.

The city also is considering other funding options that would replace the streetlights sooner. Officials are expected to present those options to the council in September.

This effort comes after the council voted in June not to enter into a $10.4 million deal with global giant Siemens Industry to have the company replace about 9,500 streetlights and conduct other energy-efficiency projects. There were concerns about the deal's financing and cost.

The streetlights would have made up the bulk of the project. City officials said Siemens would have charged Modesto$5.4 million for that work, while the city estimates it can do it for $3.75 million.

The city has said savings on its electric bill would pay off the money it borrows to replace the streetlights. Modesto spends about $936,800 annually on electricity for the nearly 9,500 streetlights. Replacing those high-pressure sodium streetlights with light-emitting diodes would save the city $374,000 to $574,000 annually, based on the wattage of the replacement lights.

The pension changes involve the Modesto Police Management Association -- which represents the department's sergeants and lieutenants -- and the department's three captains. The changes call for the officers to pay the full amount of their employee pension costs. That amounts to 9 percent of their pay. The officers have been paying 6.5 percent.

This change will be effective Dec. 30. In exchange, the officers can receive, as of Aug. 26, specialty pay of 3.2 percent if they have an advanced certificate and 5.7 percent if they have a supervisory certificate from California'sPeace Officers Standards and Training Commission. Officers can receive one but not both pay incentives.

The city says the police supervisors' and managers' pay has not kept pace with the pay for rank-and-file officers, and the specialty pay addresses that.

A city report states the specialty pay will cost Modesto about $182,000 annually and the pension changes will save Modesto about $116,000 annually. But city officials said MPMA members and the captains have agreed to changes in their retiree health care that officials estimate will reduce the city's liability for those costs by at least $2 million over the long term.

With this agreement, the MPMA members and captains are the first of the city's sworn public safety workers to pay the full 9 percent employee share of their pensions. Modesto Police Officer Association members pay 6.5 percent and Modesto City FireFighters Association members pay 1.5 percent.

Modesto's civilian employees pay the full 7 percent of their pension contribution.

Bee staff writer Kevin Valine can be reached at kvaline@modbee.com or (209) 578-2316.

___

(c)2014 The Modesto Bee (Modesto, Calif.)

Visit The Modesto Bee (Modesto, Calif.) at www.modbee.com

Distributed by MCT Information Services


For more stories on investments and markets, please see HispanicBusiness' Finance Channel



Source: Modesto Bee (CA)


Story Tools






HispanicBusiness.com Facebook Linkedin Twitter RSS Feed Email Alerts & Newsletters