The Mehlville Fire Protection District Board of Directors last week authorized Assistant Chief Steve Mossotti to present a benefit-package proposal to union employees in an effort to settle litigation involving the district’s pension plan.

Mossotti presented the benefit-package proposal to the board during a July 29 closed session “in an effort to resolve the pension and litigation issues currently facing the district,” he wrote in a memorandum that was sent to the Executive Board of Local 1889 of the International Association of Fire Fighters and district employees.

Board members unanimously approved the benefit-package proposal and authorized Mossotti to present it to the union.

“It is imperative that this package be presented at a meeting and be voted on by your membership in the next two weeks,” Mossotti stated in the memo. “In order for the district to be able to set its budget and tax rates at the Aug. 21, 2008, board meeting as required by state statute, an answer will be needed from you, the Executive Board, by Aug. 15, 2008.”

Union employees last December filed a notice of appeal seeking to overturn an August 2007 ruling that upheld the board’s authority to make changes to the district’s pension plan. Local 1889’s request for a permanent injunction prohibiting the Board of Directors from changing the district’s pension plan to a defined-contribution plan from a defined-benefit plan was denied Aug. 27, 2007, by St. Louis County Circuit Court Judge Thea A. Sherry.

On Dec. 24, Sherry denied union employees’ motion for a new trial, but granted their motion for an injunction pending appeal that prohibits the board from making any changes to the district’s pension plan. But Sherry’s injunction excludes employees hired after March 31, 2006.

Board of Directors Chairman Aaron Hilmer told the Call that after Mossotti presented his proposal to the board in last week’s closed session, “… I mentioned a quote from President John F. Kennedy. He said, ‘Let us never negotiate out of fear. But let us never fear to negotiate.’ For three-and-a-half years, the board has been taking the district forward and improving services, making necessary reforms and cutting the tax rate — this in spite of nonstop lawsuits and opposition from Local 1889.

“However, recently some employees have come forward who have shown a willingness to move forward in a way that benefits all of south county. They’re looking for a new start. That’s why we’re giving one last opportunity for settlement before we set our tax rate and budget for next year,” he said. “On Aug. 21, we will either be budgeting for all employees to be under our new defined-contribution plan or we will be taking only enough for the newer employees on the DC plan and more legal fees and more lawsuits.

“It will be up to the employees of this district to decide which course we take.”

The benefit-package proposal authorized by the board includes:

• A 2-percent pay increase for all employees for 2009.

• The district will match one-third of an employee’s 457 deferred-compensation contribution up to a maximum of 2 percent of the employee’s gross wages starting Oct. 1.

• Employees meeting the “70 Rule” — combined years of service and age equaling 70 or greater as of Jan. 1, 2008 — will receive a 4-percent 457 deferred-compensation match instead of the 2 percent. This is a one-time only upgrade and is offered only to those employees meeting the “70 Rule” on Jan. 1, 2008.

• All employees will receive contributions for 2008 to the defined-contribution plan based upon gross wages. Those with less than 15 years of service will receive 22.5 percent; 15 to 19 years, 24.5 percent; 20 to 24 years, 26.5 percent; and 25 or more years, 30 percent. For 2009 and future years, employees with less than 15 years of service will receive 8 percent; 15 to 19 years, 9 percent; 20 to 24 years, 10 percent; and 25 or more years, 11 percent.

• An upgrade in the Standard Insurance disability benefits to a higher level of payout. Primary Social Security benefits are offset as deductible income while dependent benefits are not. Benefits will be nontaxable.

• The union will need to agree to terminate all pending lawsuits and agree to refrain from any further lawsuits with regard to the termination of the defined-benefit pension plan.

In his memo, Mossotti stated, “This package is being offered ‘as is’ and is not subject to alteration. I heartily encourage you to consider this proposal. I believe it is time that all parties seriously try to work together toward a common goal.

“I ask you to allow employees an opportunity to receive an increase in their benefits. I feel this package is a good offer and I can honestly say that I think this is the best package that employees will see in the near future …”

Local 1889 members earlier this year voted unanimously to reject an offer from the Board of Directors to settle the ongoing litigation involving the pension plan.

The board’s proposal was a “counteroffer” to a settlement offer presented in January by the union’s Executive Board.

Among the union’s proposals were:

• A 3-percent increase in the current contribution rates for the defined-contribution plan, effective Jan. 1, 2009. As requested, those rates would range from employees with less than 15 years of service receiving 11 percent; 15 to 19 years, 12 percent; 20 to 24 years, 13 percent; and 25 or more years, 14 percent.

• Upgrade the Standard Insurance disability benefits to a higher level of payout.

• Matching contribution plan — for each 2 percent of an employee contribution, the district would match 1 percent, up to a 2-percent maximum.

The Board of Directors was scheduled to meet Tuesday night — after the Call went to press — to discuss the preliminary 2009 budget and the preliminary 2008 tax rates.

“I’m going to be recommending to the board we take two cents on the pension levy,” Hilmer said. “That will generate roughly $520,000 — enough to pay for our new employees on the DC plan.

“We’re budgeting for more lawsuits and legal fees where things stand now. And, of course, the employees can change that course, but that’s up to them to do that. If this is returned to us in a settlement offer, the way it’s laid out, we will then have time to adjust the budget and the tax rates accordingly.”

When the board sets the tax rate this year, it also will impact how much the district can levy next year.

“Because of Senate Bill 711, even though we’re underneath our (tax-rate) ceiling, we cannot increase it in an assessment year except for what we get from new assessments. So whatever we set on Aug. 21 is really going to be the rate we’re bound to for two more years,” Hilmer said.

Attorney John Goffstein, who represents Local 1889, was unavailable for comment before the Call’s press time.