A few meetings ago, Mayor Marie Gilmore referenced a legal analysis in her remarks about Alameda’s ability to pull a San Diego or San Jose and go to the voters to adjust pensions for its employees. The short answer to the question of whether cities like Alameda can do that, is “no.”
Highlights from the analysis:
Many cities, counties and special districts in California are contracted with the California Public Employees’ Retirement System (“CalPERS”)… it is the State, not the individual public employers, that decide who will be CalPERS members, how contributions will be made, how investments will be handled, and the terms and conditions for retirement benefits. This leaves public employers contracting with CalPERS with little control.
Because the Cities of San Diego and San Jose maintain their own pension systems governed by their own charters, ballot measures like Measure B and Proposition B passed last week, cannot be done by CalPERS, STRS, and ’37 Act employers, at least not at the local level. CalPERS employers are heavily restricted to the changes that can be made to save on pension costs by State law, such as Government Code sections 20474 and 20475. Because CalPERS is governed by the California Constitution and ensuing State legislation, any change to the governing law must be made only through State legislation implemented by State legislators.
The piece goes on to point out that Governor Jerry Brown’s 12-point pension reform plan is probably the best way to affect change for these larger pension entities that folks on the local level have no ability to change. But given that the pieces in the 12-point pension plan will have to be legislated, there shouldn’t be an expectation that anything will happen quickly in that arena.
The piece also has a good chart which shows the comparison of the San Jose, San Diego, and the proposed 12-point pension reform plan. The piece concludes with a reminder the both the San Jose and San Diego measures will be heavily litigated and in fact faced legal challenges even before the vote was calculated.
the San Jose Police Officers’ Association and active and retired members of the San Jose Police and Fire Department Retirement Plan filed complaints for declaratory and injunctive relief on June 6th….alleg[ing] Measure B impairs vested retirement benefits, violates the Contracts Clause and Takings Clause of the U.S. and California Constitutions, violates constitutional principles of due process and right to petition, as well as separation of powers. The Police Officers’ Association also alleges other violations of State law including the Meyers-Milias-Brown Act and the California Pension Protection Act.
So even as folks interested in these sorts of government issues watch and wait to see how the San Jose and San Diego measures shake out, the reality for Alameda is that post-retirement benefit reform internally has to be done with the agreement of the bargaining units. Any expectation that the City wave a wand and unilaterally slash post-retirement benefits is completely unrealistic.