Blogging Bayport Alameda

April 24, 2015

To your health benefits

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

I’m not a lawyer, nor do I pretend to be one, but I have to say that what I do know a tiny bit about is whether a case is persuasive for an argument that someone is trying to make.  For example, in response to the Letter to the Editor that former City Councilmember Lena Tam had written a fellow blogger responded on another blog site that she overlooked two cases (City of South Pasadena and County of Sacramento) that he had written about on his blog site that prove (sort of) that City Councils can unilaterally alter benefits to bargaining units.

The problem is, I don’t particularly find the cases that the blogger cited to be on point either.

Let’s take the case of South Pasadena first and look, I’m even linking to the blogger’s fancy Lexis Nexis print out too!  The first alarm bells — if the City Council is to use the case as a rationale for unilaterally changing benefits — is on the first (well, second) page which declares that the opinion for this particular case with these particular sets of facts cannot be used as precedent for other cases:


So while, say, a blogger could say “look at this opinion which clearly says we can do something” the opinion itself says, “yeah…you can’t use this one to justify anything, sorry.”

The facts of the case are particularly interesting because the MOU between the City of South Pasadena — to nutshell — before a certain date there was no provision for retiree health benefits.  During a limited term MOU between 2008 – 2011 there was a provision for retiree medical benefits but in 2011 when the parties could not come to an agreement on the MOU, the retiree medical benefits were modified unilaterally by the City Council, but only for people who did not retiree before the 2008-2011 MOU expired.  Crafty eh?

Even though the bargaining units claimed they relied on verbal agreements that they would receive these medial benefits, the court said, nope, because it wasn’t in place when you retired (or when you will retire) the City can modify that agreement.

It’s kind of like what happened with the benefits that were modified for Alameda’s bargaining units, anyone hired after 2011 received different benefits (per the MOU) than people hired before the MOU was executed.  From my layperson’s reading of the opinion, it appears that because the MOU for South Pasadena couched the benefit in terms of retirement date as opposed to hiring date, that’s why the City Council was allowed to make the unilateral changes, add to that that previous MOUs were silent on the subject prior to 2008.  Alameda’s MOUs have always discussed the health benefit in terms of hiring date so that may be an important distinction.

In general an interesting case to read and a lesson for bargaining units to be super careful with their MOUs, but nothing that should make our policy makers feel comfortable to unilaterally try to change OPEB benefits for our public safety bargaining units.

The next case of Sacramento County is allowed to be cited and used to justify a legal position, so in the case it’s less problematic than the South Pasadena case.  But the Sacramento County cases is also not persuasive because the facts of the case don’t really align with our situation here since the Sacramento County had provided the health benefit on a contingent basis every year and disclosed frequently that providing the benefit for the given year would not constitute a vested right.   Again, definitely not a slam dunk for those looking for case law to prove that a City can unilaterally take away retiree health benefits.



  1. Lauren, people give you a lot of shit sometime for what you say…which is up to them. But how do you know all this a have the knowledge. I worked for a law firm and know what a MOU is, I also worked in construction and saw a lot of MOU, but the average person would not know this. I think you have a day job, and cook, clean, and spend time with your family…I love your blog, but how do you stay current and know all this and work…do people feed you tips. I personally have some other things going on with my life so I probably will take another long break from posting. Not that I don’t care I will be lucky to see the next show of Macgver which I know isn’t on anymore…but just say-in. If I commute, go to work, and the gym, come home eat, walk the dogs, do a few chores the day is gone, and you have 2 kids. I just want to say we appreciate your time, effort, knowledge. The only healthy benefit I can give you is your are appreciated…I don’t know how you do it.

    Comment by Jake. — April 24, 2015 @ 7:59 am

  2. I am trying a bit of critical thinking on this one. I am not sure who is right here, but since every city and county in California has this unfunded liability problem, if these two cases were such surefire evidence that retirement pensions and benefits could be taken away unilaterally from public safety employees, why aren’t all the cities and counties relying on them for a solution to the problem? Seems to me that everyone would be just leaping on them, and well, they are not. Can anyone explain why not? Maybe Mr. Sullwold can help us here.

    Another thought – there is no greater waste of government money than hiring expensive lawyers to answer lawsuits. Money spent on defending our City does not pave streets, build parks, or put a needed police officer on the street. Might as well burn up those hundreds of thousands of dollars on the steps of City Hall. We should make sure that any case law we use to take an action we know will result in a lawsuit is “as good as gold” before we wade in and wind up spending a lot of money wastefully. That’s why we need to know the answer to the question in the first paragraph.

    Comment by Kate Quick — April 24, 2015 @ 7:59 am

  3. I sympathize very much with all City Employees it is rather unethical for City Manager “they are the one running the day to day operation of most California’s City , everyone else are just Puppets “Sorry”

    They made the promise of a pension and should not be able to renegade on them , plain pure and simple , all these managers , City lawyers went on to retire on fat pension .
    The reason I do support them very much is simply because it hit home as my Employer in the days cancelled the plan without much of a warning as an Executive it would have been a nice retirement much better than social security yet nothing to be rich so do speak .

    Nobody work for pleasure , Going around and stiffing all these Employees after making promises is food for the Lawyers which will end up earning more than anyone else , however should this be the only venue from poor management then so be it,
    On the broad base it will force every Employers and law maker to reform the system , basically no one can survive on social security retirement , let’s not laugh on medical because one need to travel to Mexico or Canada to afford some health care . In my case , believe it or not after looking at the deductibles it will be more cost effective for me to fly back to Europe , now this is an illustration on how screwed up the US system is . One of the most expensive in the world yet delivering only the 12th rank 2 notch above Cuba , could this explain why the GOP are so dead set against normalization with the USA .
    Anyone making such decision ought to be held accountable running away from the mess they created is their problem do not blame the workers regardless what duty they perform , they asked you agreed , You pay for it.

    As an example why anyone would sign a contract as they did in San Francisco promising the Bus Drivers to be among the highest paid if not the most in the entire USA , I still try to find any logic behind that one…..

    Comment by Joel Rambaud — April 24, 2015 @ 8:30 am

  4. “there is no greater waste of government money than hiring expensive lawyers to answer lawsuits…” You must not be familiar with the phenomenon of health care fraud or the Department of Defense, both of which cost our government Billions each year. Of course, the defense budget has little relevance to this discussion, but massive waste and fraud in our healthcare system does directly drive up health benefit costs, which is the driver sending OPEB costs out of control.

    To purport to discuss health benefits without acknowledging the disparity in cost to individuals is folly. The ACA has been a game-changer. For the first time in US history, the Federal government is offering subsidies to help people pay for health insurance, since it is now law that we all buy it. The subsidies appear to be offered to a variety of special-interest groups who have successfully made their case to the Feds. If every city/county in Califonia has the same problems with funding retiree public safety health benefits, why shouldn’t the ACA somehow be leveraged into the discussion?

    The first A in ACA = Affordable. Clearly, OPEB is becoming Not Affordable.

    Whether your Kaiser premium is $130/month or $1300/month, you get the same quality of care.. But what a huge difference it makes to the budget of the city paying for it Which size premium is the City of Alameda paying for-and why?

    Comment by vigi — April 24, 2015 @ 9:56 am

  5. Health care fraud is indeed a huge expense. The causal factor is the health care providers that do fraudulent things. The government keeps trying to reduce it by more regulations and oversight and the health care provider community lobbies against such legislation. As to the defense budget, no one has yet to get a handle on the waste not only of money but of human life and health. The ACA does impact the cost of provision of health care, which has gone down substantially nation wide since its inception. However, it doesn’t cure the unfunded liability issue. Every governmental jurisdiction negotiates its health care rates with its providers every year. Then it tries to work out with the employee organizations what percentage of the cost will be borne by whom. The rates are down in growth, but they are still a substantial cost to both employer and employee.

    Comment by Kate Quick — April 24, 2015 @ 10:53 am

  6. 4. right. I’ve made this exact point on this blog before, but for cities to leverage health care into a broader discussion they need to be organized collectively, which is difficult when each city is toiling on it’s own to come up with solutions. You want to band together with Berzerkeley???? Truth is we should have adopted national health care under Eisenhower, but instead we have Republicans trying to kill social security. The life expentancy for lower income folks hasn’t expanded at the same rate as the 1%, but all the wealth they’ve sequestered isn’t enough. They want to postpone my lousy $1100 a month.

    Comment by MI — April 25, 2015 @ 9:38 am

  7. Funny thing about big, bad, almost-always right Rob S. You can agree with his opinions all you like, but his facts are more often inaccurately portrayed, and pointing out that he’s wrong and misleading is not allowed, unless he’s going to make some snarky remrk about your comment. He blocks dissent in his comments in order to protect his hard-on for a few political opponents and appear smart.

    But what do you expect from a guy who creatively misquotes people and leaves out important context. Who gets his law wrong–he’s a tax attorney, you can’t blame him for not knowing what he’s talking about, he’s a total newbie–Sullwold joins Kennedy and Kearney as Alameda’s republican establishment. His opinions may be always right, if that’s the way you swing, but his facts often aren’t.

    Sullwold should be proud, he’s becoming the voice of truth for the true believers. The haters, the ignorant and the bitter. Go Alameda Merry-go-round!

    Comment by boathouse noodles — April 25, 2015 @ 11:21 am

  8. 7. interesting….I think you may have meant to post this on The Long and Winding Meeting thread ?

    I have a slightly off topic comment : I met yesterday with some folks to discuss Alameda’s emergency water supply in posts seismic event, there sort may not be any. AFD rep was present. Hope it goes somewhere. Meanwhile, I was searching Nepal earthquake and came across this from 2013.

    Comment by MI — April 25, 2015 @ 2:23 pm

  9. Sullwold is not a tax attorney, not a Republican, and doesn’t censor his blog. What the hell are you blathering about?

    Comment by people can be unreasonable ------- — April 25, 2015 @ 2:50 pm

  10. 7

    I’d be very interested in specific examples of Sullwold being wrong. Please cite one or more, with evidence to back your claim.

    Comment by dave — April 25, 2015 @ 4:08 pm

  11. Uh oh, you’re going out on a limb that won’t support you again #9.

    You might want to tell Big Rob’s wife he’s not a Republican as well as how you know that and she doesn’t—I smell a scandal!

    Having had multiple of my own comments censored on Big Rob’s “Law” blog, I think I might know more than you on this subject, but hey that won’t stop you from saying otherwise. His blog, his rules, but at least it make sense as to why his few commenters always agrees with him, right? He creates and then lives in his own bubble while pretending otherwise. Brilliant strategy, right up there with his writings.

    little-d dave, feel free to peruse his comments during the pre-censoring era, you know before he started shutting down negative responses, and you’ll find a number of public corrections, many more were made. Having lurked around here for a long while and seen you in action, I’m totally aware that providing you with facts that disprove your positions doesn’t cause you to change your opinion, so no point in my spending more than a couple of ticks doing your work for you. I get it, he hates the fire department, you hate the fire department, who am I to get in the way of that match made in heaven?

    Comment by boathouse noodles — April 25, 2015 @ 5:23 pm

  12. Mea culpa. I was wrong. Knew she was a lifelong Democrat and he did not seem Republican from what I saw. Going to stick to your “tax attorney” statement? As far as censorship, I have read the comments he didn’t censor from you and I’m pretty sure that anything he did censor was worthless.

    Comment by people can be unreasonable ------- — April 25, 2015 @ 5:36 pm

  13. 11

    C’mon, just one. You can do it.

    Comment by Joward Harvis — April 25, 2015 @ 5:39 pm

  14. 11

    You’re in luck, Lauren doesn’t censor comments (AFAIK). Feel free to back up your bold pronouncements right here. You can even include the snide personal comments if that helps.

    Please, pretty please, tell us what RS has got so wrong.

    Comment by dave — April 26, 2015 @ 7:59 am

  15. 12. you like to excoriate Lauren like the Wicked Witch of the West End, but she doesn’t censor you does she ? Is that because your ad hominems are valuable? Only you would declare something worthless about which you know nothing. Is that spaghetti hanging down your chin? Oh no, it’s a shoe lace. Your other foot’s still in your mouth.

    14. hope you get what ask for.

    Comment by MI — April 26, 2015 @ 9:29 am

  16. This doesn’t sound like tax law, exactly:

    Not spaghetti, MI, Ramen Noodles! We have Boathouse in the discussion now.

    Comment by vigi — April 26, 2015 @ 3:19 pm

  17. back to the title topic…My AAPS news just came (Association of American Physicians and Surgeons, not the Alameda preservation group):

    #5 = Show me how the ACA has “substantially decreased the cost of provision of health care”, b/c the graph from KFF shows admin costs driving it wildly straight up:
    Rocky D. Bilhartz MD @BilhartzMD”Taking Back Medicine” via @BilhartzMD

    Comment by vigi — April 26, 2015 @ 3:46 pm

  18. 17. Ha ha! You cite a Fox News commentator and some guy who quotes (approvingly) Thomas Sowell. Not exactly impartial sources.

    Set aside ideology and take a look at the raw data from the BLS: You can play around with the time-period. It’s actually a pretty clear trend since the ACA. (Remember you have to subtract the overall inflation rate–also available from the BLS–to get the pure medical inflation.)

    And as for Sullwold: right, not tax law but securities law. But certainly not municipal law. Though he does make us know just how well educated he is. Seems like a strong personality trait. I get it Mr. Sullwold, Esq. is awfully clever!

    Comment by BC — April 26, 2015 @ 9:08 pm

  19. I support the labor contracts coming before the City Council this week (4/28 and 4/29) and hope you will approve them as an intermediate and additional step toward both improving labor relations within Alameda and resolving part of the continuing OPEB liability problem, which cries out for a statewide legislative solution and is beyond the ability of the City of Alameda to resolve alone.

    The fact that the City of Alameda and its unions cannot resolve this unfounded liability problem entirely on their own should not keep us from doing what we can do locally to reduce future liabilities now.

    I am often puzzled why Robert Sullwold has such an angry tone in his blog posts and columns. It is also curious to me that he can look at (and cite) many of the same facts I do, but reach conclusions totally opposite from the ones I have (correctly, of course) reached. 😉

    Comment by Jon Spangler — April 27, 2015 @ 7:47 am

  20. BC The “Fox news commenter” is somewhat more than that. “Dr. Marc Siegel is a Professor of Medicine at NYU Langone Medical Center and a Fox News medical correspondent.”

    Being a practicing and teaching physician, he is in the trenches and knows whereof he speaks. You aren’t and you don’t.

    Comment by vigi — April 27, 2015 @ 12:58 pm

  21. So there’s unanimity among doctors on this? I think not.

    The data are pretty clear. Can only doctors understand medical inflation rates? Economists understand markets and prices better, I’d suggest.

    Comment by BC — April 27, 2015 @ 1:08 pm

  22. “The data are pretty clear”…Although 14 million more people are said to be insured under ObamaCare, “the proportion of people of all ages with a ‘usual place to go for medical care’ was 87.8 percent last year, the same as it was in 2002-2003. Further, 5.7 percent reported that they failed to obtain needed medical care due to cost last year, the same as it was in 2003-2004.” New patient visits by Medicaid beneficiaries are barely increasing. John Goodman writes: “My own view is that the importance of health insurance has been enormously exaggerated by the health policy community.”

    ObamaCare still can’t get enrollment right. The California Exchange, supposed to be the model for the nation, is plagued by incompetence and mismanagement, despite the infusion of $1 billion from federal taxpayers. Covered California’s retention rate (65%) is among the lowest in the nation. Of 500,000 new enrollees predicted for this year, only about 7,000 showed up. It’s an “unaccountable monster.”

    Under ACA, we are paying more and benefiting less.

    Please, BC. Do provide the name of the economist who “understands” the skyrocketing prices of generic drugs. S/he might win the next Nobel Prize.

    “Diane Shattuck filled a prescription in December for a generic antibiotic called doxycycline. With insurance, she paid $4.30 for 60 pills at a CVS store in Orange. She returned at the end of February to refill her prescription. This time, she was told her cost for the drug would be about $165.Mar 7, 2013”
    When a drug costs 30 times what it once did – latimes

    For you Single-Payer fans: Breaking News Single-payer FAIL

    Comment by vigi — April 27, 2015 @ 6:06 pm

  23. In case anyone missed my point, it is that consensus is growing that pouring money into health insurance is pouring money into a Black Hole. Since OPEB is mainly the cost of health insurance, OPEB is also a Black Hole.
    All this pious nonsense about doing what we can to reduce unfunded liabilities now, is just rearranging deck chairs on the Titanic. That’s why Sullwold sounds angry. More of us should be.
    Spengler is right about one thing: the cities and unions cannot resolve this OPEB problem on their own. But let’s stop pretending that the PPACA has done anything less than make the problem worse

    Comment by vigi — April 27, 2015 @ 6:19 pm

  24. So your point is that medical insurance is a bad system for providing medical care? I’d agree–your anecdote about generic drug prices relates to medical insurance generally, not ACA specifically. And your reference on single-payer care seems to be saying it’s the right thing but politically difficult–not that it’s a bad idea. I’d agree there too. So…what do we do? The US system is the most expensive in the world, by a long shot, and has mediocre health outcomes.

    Comment by BC — April 28, 2015 @ 10:00 am

  25. For one thing, price controls on pharmaceuticals would help. I understand this is done in other countries. And bring back the ban on prescription drug advertising. Believe it or not, when I was much younger, it used to be unlawful to advertise drugs that could only be bought with a prescription. (just as once it was considered unethical for doctors and lawyers to advertise). If we can ban cigarette ads, it should be possible to ban prescription drug ads. Both of these steps might make a measurable drop in the cost of health care to consumers.

    It is the present system of paying into medical insurance that is the problem. By making health insurance mandatory, the US Government has guaranteed the cash flow of health insurance companies, without guaranteeing that they provide the services to consumers. It was a colossal mistake to equate health insurance with health care. The consumer is out the money up front, before the services are ever provided. The consumer must depend on the “ethics” of the insurance company to provide appropriate medical care, because the insurance companies tell doctors exactly what they can do, either by providing or withholding payment. And the only recourse consumers have is to file complaints with impotent regulatory agencies that have no teeth, like California DMHC. (DMHC only takes enforcement action when it receives a large number of complaints about the same problem, with the attendant publicity. Even then, the fines levied by the State of California are a pittance compared to the reserves held by the insurance company). The evidence that this is not working may be best found at complaint sites such as Pick any of the huge controlling companies: Blue Cross, Kaiser, Aetna. Suddenly, people who have had the same insurance for 10, 20,30 years are complaining that services they have previously received are now being denied as “not medically necessary”. Yet their premiums, co-payments, and deductibles are inexorably rising with no end in sight.

    The California initiative, Prop 45, tried to get a handle on these costs during the last election, but it didn’t pass. The insurance industry smothered it in false negative publicity. Vote for it next time!

    There is no doubt that Kaiser and Blue Cross ultimately determine how much cities will pay for OPEB, by telling unions how much they must demand to pay for health insurance for their members.

    It seems to me that today’s health insurance companies resemble the monopoly of Standard Oil at the beginning of the 20th century. Perhaps some sort of trust-busting legislation is needed.

    Comment by vigi — April 28, 2015 @ 1:57 pm

  26. For Whole Foods Fans: Maybe we don’t want one here in Alameda.

    Comment by vigi — April 28, 2015 @ 2:49 pm

  27. Vigi: I agree with a lot of what you write in 25! And I dislike Whole Foods on a number of counts so am with you on 26!

    Comment by BC — April 28, 2015 @ 3:23 pm

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