Blogging Bayport Alameda

June 14, 2012

One of these things is not like the other

Filed under: Alameda, City Council — Lauren Do @ 6:04 am

On Tuesday night there were two big meetings, the City Council and the School Board meeting.   Honestly though anyone with any kind of interest in City business, particularly budgets, should be required to watch the meeting from Tuesday night because a lot of information was laid out there and served to correct a lot of misinformation that has been floating around and based on that information folks have reached conclusions about the state of Alameda’s government and budget.

The meeting kicked off with Councilmember Doug deHaan’s appointee to the Open Government Commission doing a hit and run public comment saying that the City Council has done nothing to address post-retirement benefits in the City of Alameda and that they will have to moving forward.   Which made me stop and say to myself, “Self, there really should be a requirement that members of the Open Government Commission really understand what the hell is going on in the Government that they will be tasked with watchdogging.”

This was the response to that by Mayor Marie Gilmore, which I thought was well done in light of the discussion on this blog around the subject of post-retirement benefits and in light of the San Jose and San Diego post-retirement benefits vote:

 

For those that don’t want to watch:

I’m really sorry that our speaker left because he brought up a really important point about pensions and benefits.   The cities of San Diego and San Jose created their own pension plans and as such they created it and they can change it with simply a vote of their residents.  Alameda, on the other hand, belongs to the state pension plan system called CalPers.  And so in order for our pension plan system to change it has to be something that takes a vote of the citizens of California because it is not our pension system the way it is in San Jose and San Diego we cannot put a measure on the ballot unilaterally slashing pensions costs and benefits if a majority of the residents would vote for it.

Once again, for everybody following along at home, our pension plan is a plan that is a creature of the state and therefore the citizens in California would have to vote on it to change it unlike the cities of San Diego and San Jose who have their own pension plans and their citizens can vote to change that anytime they want.

Now that’s not to say that we’re not looking at the issue and we’re not thinking about options which is why the pension committee which is looking at this is coming back in September.

Just to reiterate for those who don’t want to read through a long narrative either.

  • San Jose and San Diego have their own pension plans
  • Alameda’s pension plan is CalPers
  • San Jose and San Diego citizens can vote to adjust pension plans
  • Any adjustment to CalPers (and therefore Alameda’s pension plan) would have to be done by a statewide vote and not a local vote

John Russo went on to explain that the pension committee will have a two-phase report.  The first will outline the extent of the problem and gaps.  The second will address the other post-retirement benefits (OPEB).

On the issue of pensions and things.  City Manager John Russo also noted on Tuesday night that he plans on re-opening negotiations with bargaining units this summer.   Yes, you read that right, this summer.  I know some people thought that the new contracts that were signed last year were locked in as some sort of cushy kickback to the public safety unions and that the recent other bargaining unit contracts were locked in prior to the election, but John Russo was very clear that negotiations will begin again AND there will be an expectation of more concessions.

More on pensions and things tomorrow.

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32 Comments

  1. The mayor is not 100% correct. Not everything has required a vote of the people of California.

    Over a decade ago the city council voted to change the firefighters’ retirement formula from 2% at age 55 to 3% at age 50, matching that of the California Highway Patrol.

    Comment by Irene — June 14, 2012 @ 7:18 am

  2. Irene: I believe the Mayor was referring to attempting to reducing benefits for existing employees a la the San Diego and San Jose ballot measures. Certainly not all post-retirement benefit changes need a vote of the people of California, when there are changes to the MOUs that adjust post-retirement benefit amounts that is done on a local level. However large scale changes in the vein of San Diego and San Jose was what the Mayor was referring to and she referenced a legal analysis on this subject from an employment/labor law firm.

    Comment by Lauren Do — June 14, 2012 @ 7:33 am

  3. Lauren is correct, Gilmore was responding directly to Peterson’s suggestion that voters in Alameda will be forced to take things into their own hands, a la San Jose. The rest of her comment makes it clear she is aware that there are actions that can be taken, but those actions require negotiation and agreement.

    Comment by jkw — June 14, 2012 @ 8:07 am

  4. Again Lauren’s comments reflect the shortsighted view of someone who’s only contact with Alameda is vicariously online. Kurt Peterson did not make a “hit & run” comment. He prefaced his remarks by saying he was distressed that the AUSD meeting {scheduled much earlier than this one], was taking place simultaneously & he could not-& should not have to try to -be in 2 places at once. For years Kurt has often been the only public speaker at AUSD meetings & his comments are always substantive. He doesn’t just show up with the crowd for the hot-button issues. He’s also been on the RAB for something like 10 years. He is one of the most well-informed conscientious Alameda citizens I know. It’s just a shame this touted “open govt commission” will have limited usefulness meeting only a few times a year.
    Meanwhile, the mayor gave the same “widget” speech she gave last year, which I never understand, since widgets can be either useful or useless.

    Comment by vigi — June 14, 2012 @ 9:35 am

  5. I cannot imagine that someone tasked to be a government watchdog doesn’t know about a broadly based committee that has been working for months. Oh, well!

    Comment by Kate Quick — June 14, 2012 @ 9:39 am

  6. The theory that drives the ‘untouchable’ nature of public employee benefits under CalPERS is that the retirement money members receive is actually a portion of their salary that wasn’t paid to them while they were actually working. Municipalities, with the agreement of their employees, instead of paying the employees’ their entire negotiated salary shunted a portion of the salary to CalPERS to invest and hold until such time as the contributing employee retired.

    Thus, a city voting to reduce the employee retirement benefit from CalPERS is, in fact, no different than hiring an employee under contract for a certain wage, then twenty years later deciding that what was initially agreed upon by both contracted parties can be changed unilaterally by one of the parties and must be repaid. In effect, that party is unilaterally going back to the original contract and subtracting a portion of the twenty year old salary that was paid to the second party.

    If that isn’t a clear violation of the cornerstone of the American system of government, i.e. the sanctity of contracts, then no contract is worth the paper it’s written on.

    Comment by Jack Richard — June 14, 2012 @ 9:57 am

  7. Let’s not forget that CalPERS made some pretty dismal investments with that money they were given in trust for their retirees. There’s got to be a limit on how much taxpayers can be expected to fund those unexpected liabilities! Perhaps some “clawback” on the salaries/benefits of the CalPERS administrators who made those decisions. Municipal citizens cannot be expected to back up in cash every mistake pension fund managers make! Perhaps when you are old enough to realize you will not be healthy or young forever, you will stop blindly applauding every revenue enhancement demanded of you for a good cause. There simply isn’t enough money to go aroud.

    Comment by vigi — June 14, 2012 @ 11:16 am

  8. Jack,

    How would you resolve the issue and what would be your recommendations?

    Comment by John — June 14, 2012 @ 11:30 am

  9. No, vigi, ‘clawback’ to punish those responsible for investing, unless there were clearly illegal investments, is not tenable. Investing is a matter of risk and the risk begins with the local municipalities elected officials who, no doubt influenced by The California State Employees Association, determined that CalPERS would help satisfy their own re-election needs but also strengthen the tie between public workers and those same elected officials.

    Going after CalPERS officials is a little like going after the racehorse owner after betting on the horse that finishes out of the money.

    John, you know what the long term answer is…eliminate public sector unions. The short term is through the courts. This problem is nation wide(for those states with public unions) and getting worse and unfortunately the same people who got us into this mess keep getting voted back in office.

    Comment by Jack Richard — June 14, 2012 @ 11:57 am

  10. When it gets to this point, one way: (ask John how the city can come up with lump sums)

    “Retirees covered by the GM plan have a choice: They can take a lump sum that reflects the total amount of what they would have received from their current monthly plan for the expected duration of their own life and that of their spouse, or they can decide to continue to take their monthly pension — the same one they get now — but with no federal guarantee.”

    GM retirees’ lump-sum dilemma | Bankrate.com http://www.bankrate.com/financing/retirement/gm-retirees-lump-sum-dilemma/#ixzz1xnThFMWn

    Comment by Jack Richard — June 14, 2012 @ 12:22 pm

  11. Jack

    That is what I was suggesting……….Lets Bite the Bullet……..Lets Exactly find out what we owe….I know those Lifetime annuities are not Cheap……Throw in Health Benefits for Lifetime and #s are Serious Wake Ups.

    1/3 of Department is Just Firefighters and 2/3 Rank much Higher……So Retiring at 50 with Lifetime Annuity on Average of 125K and 25K for Health……If You Purchased at 50 is 4 Million to recieve those Benefits Per Employee.

    We Just had a Retired Fire Chief Die around 90……

    Comment by John — June 14, 2012 @ 12:41 pm

  12. Looking at Elections and Thinking we will get Change is Not Really Going to Happen Regarding Eliminating Public Sector Unions.

    So what are chances of Change

    Bonta Supporters

    Labor Organizations
    California Labor Federation
    Service Employees International Union (SEIU) California
    California School Employees Association (CSEA)
    California Professional Firefighters (CPF)
    Peace Officers Research Association of California (PORAC)
    United Farm Workers (UFW)
    California Teamsters Public Affairs Council
    UNITE HERE State Council
    Professional Engineers in California Government (PECG)
    California Police Chiefs Association
    Service Employees International Union (SEIU) 1000
    California Association of Professional Scientists
    United Food and Commercial Workers (UFCW), Local 5
    Operating Engineers Local 3
    Teamsters Joint Council District 7
    Deputy Sheriffs’ Association of Alameda County
    San Francisco Deputy Sheriffs’ Association
    California Association of Highway Patrolmen (CAHP)
    CDF-Firefighters, IAFF Local 2881
    IAFF Local 55—Oakland, Alameda County, Emeryville Firefighters
    Alameda Firefighters, IAFF Local 689
    San Francisco Firefighters, IAFF Local 798
    Oakland Police Officers Association
    Alameda Police Officers Association
    San Leandro Police Officers Association
    San Francisco Police Officers Association
    East Bay Automotive Machinists Local 1546
    International Union of Painters and Allied Trades, District Council 16
    American Federation of State, County & Municipal Employees (AFSCME) Council 57
    International Brotherhood of Electrical Workers (IBEW) Local 1245
    Marine Engineers’ Beneficial Association, AFL-CIO

    Comment by John — June 14, 2012 @ 12:48 pm

  13. To Save 4,000,000 Dollars by the Age of 50 to buy a Lifetime Annuity that paid 125K a Year and 25K a Year in Benefits you would need to save 97,000.00 Per Year for 25 Years at a 4% annual interest. A 30 Year Bond pays 2.75 %…If you took that rate you would Need to Save 115,000 Per Year for 25 Years.

    I don’t know if Dudley Daysong and Beverly Johnson signed us up for in that Contract thay Buried the City.

    Comment by John — June 14, 2012 @ 1:16 pm

  14. That Should have said

    I don’t know if Dudley Daysong and Beverly Johnson know what they signed us up for in that Contract thay Buried the City.

    Should Also be noted that this was Recommended by Staff after the Greatest Tumble in the World Financial Markets and Business were closing and Millions were out of work and CALPERS was posting Billions in Losses a Month Prior.

    Cities Revenues were down huge and We were also Still suffering from revenues down huge from Base Closure 4 Years Prior.

    Kinda like John Russo neglecting to say we gave 50 – 80 % in Total pay compensation increases in last 10 years but only pointing out last 3 . Somehow we don’t get whole story sometimes.

    Comment by John — June 14, 2012 @ 1:34 pm

  15. It Certainly isn’t the Fire Departments and Police Departments Fault. The Unions Job is to get as much for their people as possible and make their case.

    Buying influence is where the problem lies.

    If someone is stupid enough to fall for these Pay scales and Retirement Plans and Not know what to hell they are doing and let people who have interest in getting more money because of their contracts coming due and we let them do the work is also where the Problem lies…….I’m just confused on where the fiduciary responsibility is and who is suppose to be representing the citizens of Alameda who have to pay these bills.

    Comment by John — June 14, 2012 @ 1:58 pm

  16. John, you know where the fiduciary responsibility is just like you know what flows downhill until there’s no more downhill…Joe the taxpayer’s pocketbook. In the case of this country, we’re lucky because we can run away from local or state fiscal problems (the Feds, on the other hand just print more money). I it gets too bad, there are other states that have their act together. Maybe that’s why you donated a transfer tax?

    Comment by Jack Richard — June 14, 2012 @ 3:35 pm

  17. It’s really too bad that Jack and John are so busy dumping on the folks they want to blame that they do not seem to be willing (or able?) to come up with reality-based solutions to the problems we actually have.

    I would not mind reading their posts half as much if I could find substantive, real-world solutions in them rather than polemics. (I don’t have any solutions of my own to offer except that we need to stop blaming each other for whatever happened and figure out how to fix the problems in a constructive way.).

    Comment by Jon Spangler — June 14, 2012 @ 4:39 pm

  18. I attended the budget session on Tuesday, and left with a good feeling that not only has the city presented a balanced budget for the next two years, but plans are underway to address the pension issues and future budget deficits. And with the exception of the city jail, the budget for the next two years has been balanced without cutting city services.

    Mayor Gilmore said something very important that we all need to remember – and that is that it took a long time to create these problems, and correcting them will not happen overnight. I appreciate the fact that we are moving in the right direction.

    Comment by Karen Bey — June 14, 2012 @ 5:45 pm

  19. Jack

    Referring back to another thread, I’m not a “self avowed Marxist”, just a Socialist, but despite basic philosophical differences I appreciate the intellectual honesty of #6 on contracts. But #9 about long term solution being to eliminate public sector unions is utter B.S.. Collective bargaining is not synonymous with these pension contracts and the problems related to them, which are more the product of political influence, but not inherently linked to collective bargaining which is the main purpose of unions, public or otherwise. You may see the political influence of unions as an inherent flaw, but that goes back to our basic philosophical differences. I see the aspect of union influence in politics as a direct response to the corrupting influence of money as applied by corporations prior to the rise of unions as major players in electoral politics.

    The genesis of corporations as persons according to Thom Hartmann ( read the intro). http://www.amazon.com/Unequal-Protection-Corporations-Became-People/dp/1605095591/ref=la_B000AQ449C_1_3?ie=UTF8&qid=1339721616&sr=1-3#reader_1605095591

    Comment by M.I. — June 14, 2012 @ 6:06 pm

  20. 17
    Do does the post, we do the polemical comments concerning her post (if it’s worth commenting on or if it’s not, we diverge) Jon, so why don’t you make it a full mind reading instead of just half and not read our comments?

    Comment by Jack Richard — June 14, 2012 @ 6:11 pm

  21. Mark, I have no problem with unions outside the public sector. Inside the public sector, my problem is with the unholy alliance between those who need to get elected having to rely on and expect finacial aid and votes from those with whom they negotiate. I do not accept the common talking point that public sector unions’ influence is no different than corporate influence in the private sector. Of course, the fundamental difference is corporations don’t go to tax payers to pay for their proclivity.

    Thanks for clearing up your political bent.

    Comment by Jack Richard — June 14, 2012 @ 6:25 pm

  22. Jon Spangler

    For one whose household makes their living off of promoting political agendas and political candidates with puff pieces and Social media your credibility is ZERO.

    I came up with a first step in Finding a REALITY BASED SOLUTION. Not Keep Hiding REALITY.

    11.Jack

    That is what I was suggesting……….Lets Bite the Bullet……..Lets Exactly find out what we owe….I know those Lifetime annuities are not Cheap……Throw in Health Benefits for Lifetime and #s are Serious Wake Ups.

    1/3 of Department is Just Firefighters and 2/3 Rank much Higher……So Retiring at 50 with Lifetime Annuity on Average of 125K and 25K for Health……If You Purchased at 50 is 4 Million to receive those Benefits Per Employee.

    13.To Save 4,000,000 Dollars by the Age of 50 to buy a Lifetime Annuity that paid 125K a Year and 25K a Year in Benefits you would need to save 97,000.00 Per Year for 25 Years at a 4% annual interest. A 30 Year Bond pays 2.75 %…If you took that rate you would Need to Save 115,000 Per Year for 25 Years.

    It IMPOSSIBLE to Come up with ACTUAL Solution til You actually Know how much you owe.

    But Finding out how much you really owe is First Step in Finding Solution

    When evaluating companies that were going Bankrupt we always looked at where the Real Money is being spent first and the total compensations. it’s a pretty good place to start.

    It appears over 60 percent of core fulltime employees total compensation is between 100K – 400K and .is Bulk of City Budget.

    8.Looking at Spreadsheet it looks like we have about 555 Full Time Employees.

    205 – Employees Total Compensation 150K – 400K

    OR around 37%

    149 – Employees Total Compensation 100K -150K

    Or Around 27%

    Those 555 Employees are 95% of Total Compensation of All City Employees.

    We Can’t keep Hiding Jon Spangler and pretend. These are Serious Liabilities we are Looking at.

    Comment by John — June 14, 2012 @ 6:56 pm

  23. Karen

    To say we have Balanced Budget for next two years Sounds Good.

    It’s like saying we can still pay the Maids and Gardeners but can’t pay House Payment or Eat. It’s balanced as far as Maids and Gardeners are Concerned..

    In Reality it is just living in a World of Denial and Not Really Addressing Issues and obligations we have Been Deferring .

    Comment by John — June 14, 2012 @ 7:10 pm

  24. Thanks John, the Spankster thinks we should banter for his benefit.

    Re. Your # 12 above , I remember back when Bonta was running for CC, the Spankster knows my niece, who has an upholstery shop next to Rosenblum’s Winery…anyway I was over there for some reason or another, she had a huge picture of a Bonta campaign ad on her shop’s front door. What the F’s this I say, oh Jon Spangler put it there, says she. Rip it went…

    Comment by Jack Richard — June 14, 2012 @ 7:19 pm

  25. 23 It’s kicking the can down the two year road…what politicians do best.

    Comment by Jack Richard — June 14, 2012 @ 7:22 pm

  26. 24

    Jack……Maybe you can take that poster by the City…..They have Duct Tape for Everything.

    Comment by John — June 14, 2012 @ 7:25 pm

  27. Jack

    I wish I would have known about your Nieces Upholstrey Shop…. Still Might Not be to Late…..Maybe I can get friends I gave dinning room chairs to have done at your nieces place.

    Comment by John — June 14, 2012 @ 7:31 pm

  28. Wright Way Design, she does really good work. Specializes in boat stuff but we’ve had her upholster tons of chairs, including dining room chairs. Plus she takes care of Mortice the tortise (our 57 year old desert turtle we inherited) when we’re on travel. Great gal!

    Comment by Jack Richard — June 14, 2012 @ 7:43 pm

  29. Thanks Jack……..Would love to give her some work and support our Local business…..Plus I want to insure Mortice is taken care of and has to stay away from Tortise Stamps.

    I know MI has our best interest at Heart.

    Socialist Failure

    Greece Begs Private Sector for a Bailout

    As a free-market, limited-government conservative, the total implosion of the Greek economy is the most stunning example of everything I’ve ever tried to warn about in regard to socialism. Despite the rest of Europe and the International Monetary Fund (IMF) promising last year to give Greece 110 billion euros over three years, the country remains in a death spiral, with its budget deficit at 13.5% of gross domestic product (GDP). By contrast, the last actual figure for America was at 8.8%.

    So how did things get this bad for Greece? As IMF negotiator Poul Thomsen said of the country last year: “[Greece’s] revenues have declined significantly, while spending, especially on wages and entitlements, has risen sharply.” There you have it: the definitive formula for an economic meltdown.

    One might think that would have been a wakeup call for Greece. Not so, apparently. This week, Prime Minister George Papandreou—a socialist, not surprisingly—faced revolts, resignations and defections from within his own party last week. What exactly is he supposed to do? Shake out the couch for spare change? The socialists broke the bank and there’s nothing left to spend.

    http://www.humanevents.com/2011/06/19/socialist-failure-greece-begs-private-sector-for-a-bailout/

    Comment by John — June 14, 2012 @ 8:00 pm

  30. Thanks John, Deb’s really my favorite niece. Single mom, two great kids. Oldest joined the Coast Guard and is serving on the cutter Rush out of Hawaii and her other kid a female will be a junior at Alameda High and is traveling throughout Europe this summer as part of a rowing team. Deb loves Mortice, the strong silient type, says she’s thinking about eloping with him to Mexico.

    Comment by Jack Richard — June 14, 2012 @ 8:37 pm

  31. @#6. Taxpayers are not asking to take back what a city employee has already vested in, ie. if a firefighter has 10 years vested in the 3% at 50, he retains the 30% of his base salary in his pension, plus the potion earned by time vested in a new and less costly CalPers plan which the city could afford. Taxpayers just do not want to continue paying into the Cadillac plan of CalPers but want to offer a less expensive CalPers plan now the city has hit hard times.

    Comment by frank — June 14, 2012 @ 8:58 pm

  32. 31 California law does not allow unilateral change in contracts lacking court action. Taxpayers were not a party in the contract negotiations. What you suggest may be reasonable and just but changing the contract will require both sides of the negotiating teams’ agreement on those terms. Those two sides were management and labor. Taxpayers merely fulfill the management negotiated obligations.

    Comment by Jack Richard — June 14, 2012 @ 10:07 pm


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