Metro Endorsements: Yes on Measure V; Yes on Measure W

San Jose Measure V
Reform Mandatory Arbitration
Yes
Measure V puts budget control back in the hands of the elected representatives of the people, which is where it should be. It’s our money, and we elect people that we think will spend it in the most productive way possible.

Not that that always happens. Elected officials don’t always run the public treasury as we manage our household budgets or businesses, which is to keep expenses in line with our ability to pay for them. And that’s when we as voters have to step in.

A process designed to settle labor disputes contributes to expense inflation. Outside arbitration, which once seemed like a good, fast way to bring disagreements over wages, hours or employment terms to a speedy conclusion, has impacted the city’s ability to manage its budget.

As salaries have risen, the city has had to cut back services. Police and fire staffing levels have been reduced. Park lawns turn brown, street trees grow massive and potholes gut our streets. Permits take longer to process and city facilities shorten hours. Measure V limits the arbitration wild card’s potential to disrupt the budgeting process.

It specifies that outside arbitrators can’t raise salaries beyond revenue growth. That’s such a common-sense principle that we’re not sure why there’s such a hue and cry against it.

Police and firefighters unions oppose the measure. We believe people who risk their lives to protect our safety should be compensated fairly. Staffing levels and pay scales also need to rise with the economy, not faster than revenues grow.

Ultimately, city employees benefit form working for an employer that is able to pay its bills.

San Jose Measure W
Pension Reform
Yes
Proponents of San Jose’s Measure W point out that the city spends more on pensions than it does for the fire department. Annual pensions currently total $138 million and will rise to $350 million a year by 2015 if costs continue to grow at the current velocity.

Measure W would allow the city to create new retirement programs for new hires that are in line with today’s employment landscape. It protects current employees’ pensions— nobody who works for the city will be affected by this change.

The current plans are a legacy of the dotcom bubble, when the city had difficulty attracting qualified applicants. The generous pension plans will stay in place for those who signed on at that time, which is fair.

Extending boom-era retirement benefits to those hired during the Great Recession, however, might be an idealistic proposition and we’d get behind it if not for the simple fact that we’d all have to find a way to pay those pensions. Simple fact is, the money’s not there.

36 Comments

  1. I think some of the sponsors of the pension reform should keep their “stones” in their own glass houses. Pete Constant collects about $100k total salary for city council (per the government employee salary database on the Mercury News website), plus medical disability retirement from the police department (which I’m guessing helped pay for the recent fishing trip and helped him hold up some of the sport fish he caught like a Hammerhead or Marlin? pictured on his Facebook account), and in three years, he will also be eligible to collect his pension?!  And didn’t he also author or help pass a rule stating city employees who retired on medical disability could not go back and work for the city, in effect double dipping, after he was elected to the city council?  Maybe the city council should look inwards and reform their own spending practices before pointing the finger elsewhere.
    How much did it cost to rush these measures to the November ballot, not to mention the nice glossy mailer they sent out endorsing it?

    • It cost the City over $1 million to put these two measures on the ballot. The City did not spend a dime sending out the mailer. That was a committee of the Chamber and Mayor Chuck Reed. Too bad we don’t know how much they spent on it because they failed to disclose that amount as required by City ordinance. So, it looks like Reed pushed for campaign finance reform and then didn’t follow the law.

    • Even if Pete Constant were the most highly paid person in the history of San Jose (although I doubt he’s presently even in the top 500), he’d still be correct about Measures V and W.  In any event, no criticism of Pete Constant constitutes a valid criticism of any ballot measure he may happen to support, or even have authored.

      “Maybe the city council should look inwards and reform their own spending practices before pointing the finger elsewhere.”

      That’s like if I were having trouble making our mortgage payments, and my wife suggested we eliminate cable TV service, and I counter-proposed we should start buying 10-packs of postage stamps, instead of 20-packs.

      • “That’s like if I were having trouble making our mortgage payments, and my wife suggested we eliminate cable TV service, and I counter-proposed we should start buying 10-packs of postage stamps, instead of 20-packs”

        By that logic, let’s cut public safety services so we can buy land to build a ballpark to TRY and lure a major league team here?  A team that already has a ballpark?  A team that is not the same franchise that we already have here in San Jose (SJ Giants anyone?)

        As for the criticsm against Constant, unless he has opted not to receive his pension for his service with the PD (which I highly doubt), IMO he falls into the same category of public employee that all of the Measure W supporters rail against.

        • “As for the criticsm against Constant, unless he has opted not to receive his pension for his service with the PD (which I highly doubt), IMO he falls into the same category of public employee that all of the Measure W supporters rail against.”

          Its not a question of “railing against” public employees.  The unions wish to characterize it that way, so pension reform will come to be seen as something only mean jerks support (‘cause who wants to line up behind a pack of mean jerks?).  In reality, pension reform is about having a municipal pension system the City of San Jose can actually afford, thus its an issue associated with those people who understand basic arithmetic.

          And I firmly oppose the baseball stadium proposal.

  2. I find the mailer I got from the firefighter’s union humorous.  Yes, the city spent a lot on Hayes Mansion.  So therefore, we should spend as much as the firefighters want on their salary and pensions.  Makes perfect sense.

    • I’ve already received several mailers from the cops and firefighters using poor logic and scare tactics to convince me to keep their extraordinary pensions intact.

      The firefighters lost my respect when they threw their newest hired 49 brothers and sisters under the bus.

      • Still spewing the wrong information I see. The offer on the table was enough to pay for the 49, Period.  You lost my respect when you refused to educate yourself to the facts.  Ya, Ya, I know…. extraordinary pensions blah, blah… Your a broken record… try something new.  Like the facts.

  3. Arbitration is a fair way for the FD and PD to get fair contacts with the city. It is the only thing that makes the city negotiate fairly. It is illegal for them to strike. All other bargaining units can strike until a contact is negotiated. So measure v is only going to effect the police and fire departments. No other bargaining will be affected. That just isn’t fair.

    • Right… it’d be fair if they could strike.  Because that wouldn’t be essentially holding the city hostage.  “Hey, you want that fire out?  Pay up.”

      They can still go into binding arbitration.  Measure V just says they can’t win more than the city can afford.  That’s completely fair.

      • “Hey, you want that fire out?  Pay up.”

        Something like that just happened out east, where the firefighters stood and watched the house burn to the ground because the homeowner hadn’t paid some assessment.

      • A third party does it now and takes everything into account. The city wants to be able to over rule to what they want. The city plays a shell game with the money moving it from fund to fund. It has been done past and they will continue.

      • There has never been any proof from the city that they didn’t have the ability to pay.  The current system requires an arbitrator to take into account the fiscal stability of the city.  Arbitration has been used only 3 times in 30 years for wages, of the 3 the city has won once and the firefighters twice…. those are the facts.

        Ya, those are overwhelming stats to require a complete gutting of the arbitration clause and justification for the cost of an election.  This is a simple power play by Reed and his cronies so that they can reduce the staff of the fire dept. and build their stadium.  Period.

      • Mr. O’Connor,
        After the San Jose Police officer voted to approve their most current contract, with many concessions, they are now paying almost 23% of their gross salary into their retirement – this is the highest percentage in the United States of any police department. They are also the lowest staffed PD per capita of any large city. If binding arbitration was so favorable for the officers they sure should have used it more, rather than 3 times in 30 years. You can check the percentage with the city if you need to verify.

    • The only problem with the current binding arbitration system is that the arbitrator has to choose between the last best offer from one side or the other.

      Doesn’t sound like much, but when the sides are far apart, the stakes are high and rather than splitting the difference, modifying the proposals from each side for a fair hybrid or otherwise using common sense its basically like a coin flip, which allows silly arbitration outcomes (city x,y,z offer this so SJ should too.) 

      My criticism is that this measure was written by a lawyer looking to close every loophole he could think of and like most dumb legislation the specificity will allow for some inevitable loophole or challenge.  A small change to binding arbitration allowing modifying the position of the two sides would have sufficed.

  4. Aside from the fact that PD and FD are both grossly overpaid, the pension benefits are ridiculous.  How is it that contributions to a market invested pension fund are paid out at 75-90% of maximum salary years REGARDLESS of fund performance?  You’re telling me that when the economy takes a dive and the pension fund drops off, WE (the taxpayers) have to pay the difference?  Guess what happened to our 401k retirement plans?  They took the same dive as your damn pension funds…without the taxpayer insurance!  The pension has disappeared from the private sector because it DOESN’T FRIGGIN WORK.  Please come join the rest of the world so we don’t have to subsidize your market losses.  Enjoy the free money!

  5. I sincerely hope all you reformers get your pound of feel-good from voting these idiotic measures into law, because that’s all the good there is in them to get.

    Measure V will not “reform” binding arbitration, it will kill it. That the city council chose to raise the banner of “reform” (I guess “change” has lost its cachet) to mask the true intent of the measure is consistent with the scandalous way the council has long done business. The truth about a binding arbitration system is that under it labor disputes seldom require an arbitrator, a fact that has always been the strength of the system. An arbitration system is a looming presence in the bargaining process, one with the power to expose and penalize deceit. The city’s true opposition is not to the arbiter’s role, it’s to honest, good faith bargaining.

    If anyone thinks this measure will disarm the cops and the firefighters they haven’t been paying attention. In all the years of binding arbitration the real big jumps in pay and benefits came not from an arbiter but from under the table deals with the likes of Ron Gonzales and Cindy Chavez. What Measure V will do is elevate that to standard operating procedure by forcing public safety unions to get the political clout they need at the bargaining table the old fashioned way, by bartering for it from ambitious and unethical politicians.

    Measure W may allow the city to create a new pension plan but it will not give the city any new tools with which to do it. The current pensions were constructed with actuarial information and contractual obligations, the very same tools that Mr. Oliverio has foolishly identified as implements of reform. Actuarial information is what it is, and contractual obligations will be what they’ve always been, met to the penny by the employees and neglected at will by the City. Nothing will change other than the quality of this city’s new hires, which should prove a bonanza for headline writers and litigators.

    • No, the silly, libertarian notion that people can just sock away money in their 401K plans and live off that is pie-in-the-sky lunacy.  We are morally and legally obligated to pay the pensions of people who’ve already worked for them, and future retirees are going to need them as well.  But in the future, they are going to have to be smaller.

      The present system is so grossly unfair to municipal taxpayers, that we need to alter it in such a way that affects people who retire tomorrow, or are already retired, for that matter.  No one should be getting a pension for more than 75 percent of what they were making in their last year of full-time employment.  Cash-outs for unused sick leave, vacation, over-time, etc., should not count towards that total.  75 percent of the base rate for their last full-time year.  Period.  That’s good enough for anyone.  In fact, its damn generous…but still a HELL of a lot less than what we’re paying out now.

      • Its not a “silly, libertarian notion”, its common sense.  You can’t promise the future, its impossible.  We’re talking 20-50 years.  How do you account for the unknown?  i.e. medical advances (life expectancies), inflation, deflation, world wars, etc.

        Structuring a “guarantee” far into the future is a job which no one person, or even a committee of “experts” can do.  Even worse, any person or group who has the audacity and the presumption to see themselves fit to do it are incredibly dangerous, and should not be trusted.

  6. The problem with measure V is that it that is not fair, it completely guts arbitration so that the mayor and city council will be able to cut public safety by setting their budget priorities.  In a perfect world that may work, but this mayor and city council are bent on cutting public safety to levels that are dangerous for the public and for the police and firefighters.  If this measure passes I worry that we will see a rise in crime, property destruction and injuries to citizens.

    • > If this measure passes I worry that we will see a rise in crime, property destruction and injuries to citizens.

      Oh dear!  Whatever will we do?

      I don’t like crime, or property destruction, or injuries to citizens.

      Is there anyway we could spend some money and make this problem go away?

  7. Measure W is dumb

    A real solution would increase contributions rate to 50-50 between employee and employer, require honest actuarial work that reflects someone retiring at 52 and living to 82, and prevent pay spiking for pension calculations (so that contributions will never be enough.)  The vast workforce represents hundreds of millions of unfunded pension liabilities because the politicians and pension board colluded to increase benefits, hiding the true costs and keeping the contributions artificially low to have more money to spend.

    2nd tier benefits are as insulting as seniority based layoffs where the youngest workers pay the price for the collective good.  Its a generational war with the baby boomers in power doing the old reverse mortgage on or municipality to see that all the inheritance is used up before they go.

    The second tier pension system has already been rolled out in several cities (it doesn’t actually require an election, but that’s nice political cover) and is projected to save nice little increments like 1% of the general fund a year for 10 years and then start rising. 

    Its a long term fix for an immediate problem and will help in about 20 years, but only provide small incremental relief and huge resentments in the short term.  Older workers who’ve promoted up will be paid more, doing less and expecting younger workers to not only pay their dues with the hardest work, but the 2nd tier pension benefits.  Really bad, dishonest and sad way of pretending to fix a problem while really doing not much of anything.

  8. Binding arbitration obviously hasn’t helped the police department much. The officers pay almost 23% of their own gross salary into their own retirement system – the highest percentage of any police department in the United States. In comparison, San Francisco officers pay about 5% of their gross salary into retirement. Our mayor still wants to point at officers as being greedy. No wonder our police department is understaffed and demoralized.

    • The city charter actually specifies the contribution ratios and SJ is unique in that.  Most cities went to paying 100% of the pension costs at the same time they were lowering retiring ages and raising salaries to “stay competitive.”  National reports show that everyone is pretty much screwed with this unsustainable pension business especially as benefits were increases (think 3% at 50) without increasing the annual contributions to reflect the true cost of providing this lifetime (and survivor) benefit structure.  1 Trillion in unfunded pension liability nationwide….which is more than all the Wall Street, Savings and Loan and GM bankruptcy crap combined. 

      At least in SJ we have the employee sharing a more reasonable portion of the costs (as they will be benefiting for decades after retiring and the city will no longer receive any benefit from them.)  Calpers actually breaks down the employee and employer contributions rates but most municipalities have been guilted into paying both sides of the contribution equation in the name of staying comparable or competitive.  If it had not been in the charter, arbitration would have surely forced that same move years ago.

      BTW – This pension thing is about all city workers, so its kinda big stakes.  The binding arbitration, however, is just police and fire (which are prohibited by law from striking like Air Traffic Controllers.)

      • Though it is has been ignored by everyone on the attack, especially Mayor Reed, for San Jose’s public safety employees the delineation between salary and pension does not become distinct until the first day of retirement. Up until then, these two components of the total compensation package are regularly impacted by the changing interests of both sides of the negotiating table. For instance, during the mid-seventies, when a job action by police officers finally broke the City’s three-year, hardline refusal to negotiate, the City understood that with inflation in double digits, take-home pay was the negotiating currency of the moment. In other years, under different circumstances, the City has been able to package retirement and medical benefits as currency, as it looked for ways to protect its current budget for addressing other priorities.

        Isolating pensions may be convenient for political purposes, but it is factually incorrect and morally reprehensible. What the mayor and his cohorts are condemning is the work of their own kind, as it has never been the case when a contract awarding take-home pay only could not be sold to union members. Take-home pay has always been first and foremost to employees. The use of pension benefits as negotiating currency started with the City, and has remained popular with a succession of pass-the-consequences administrations.

        As I have stated previously, from the onset the problem with the pension has been the City’s refusal to budget for the risk it assumed as part of the conditions of the contract. Had it done that from the onset, the modest by any standard amount would’ve grown into a safety net capable of handling the events of the past few years. It has been a tradition with San Jose that it won’t budget for what it can’t be made to look at (as example, the city for years carried huge, unfunded overtime accounts, and addressed the problem only after its bond ranking came under threat). Now, all Mayor Reed wants from the taxpayer is to look only where he points, and I must say, the people of this city are looking mighty obedient.

        • Agreed – offering pension benefits in lieu of salary increases was an old con used around the country to satisfy workers that they got something without actually paying for it.  Unfunded liabilities – a gift for the future from the sleazy politicians and city management of the past.

  9. I disagree that “If it had not been in the charter, arbitration would have surely forced that same move years ago.”

    The police department, over their past 2 contracts, has voted on their own, to give up an additional 10.75% of their gross salary, and put that amount toward their retirement in order to lower the amount the city needs to contribute. This saved police jobs and significantly lowered the amount the city has to contribute. The amount the officers pay now is higher than the 3/8 that is in the city charter and a actually violates the city charterby doing so. The officers had the option, but did not take their last 2 contracts to binding arbitration, instead voting to help out the city and preserve jobs. They probably regret this since within a few days of ratifying their last contract, the mayor blindsided them by announcing the 2 measures on the fall ballot, right after they had negotiated in good faith to help out the city and their fellow younger officers.

    What should be in the city charter, and I would love to see the POA push for on a ballot measure, is a minimum officer to citizen staffing ratio. Our staffing is the lowest of any large city in the United States, and shrinking. By Chief Davis’ estimate, the department is short at least 500 officers, and has been for years. Things have reached a critical mass within the department and units within the department have either been disbanded or gutted, most recently the Violent Crime Enforcement Team, which arrest over 1,000 parolees and violent criminals each year.

    • The Palo Alto Firefighters have such a measure on the ballot for November.  I don’t know if it’ll fly in the current political climate, but a ballot measure is not hard to qualify.

      The argument against minimum staffing rules is that it takes power away from elected leaders and city managers to balance the budget using on options available.  Maybe that’s an argument for it also.

      Participatory democracy is a good thing, and I’d love to see more measures on the ballot locally.  It gets people talking and thinking about their local government.  Even without being in favor of this measure, I think the POA should look at getting it on the ballot.

  10. For a group of individuals who place their lives on the line each day, they sure don’t receive the respect they deserve by the city or by some of the posters here. These people fight a three headed monster, they fight: against violence, against property damage, and now against its own citizens.

    San Jose is blessed with educated firefighters and police officers. Yes, each organization has some bad apples, which one doesn’t? But to sit back and not say these measures will help control costs is folly. The city needs to account for its corrupt politicians and mindless spending.

    The two sides of this debate are simple: control costs or control spending. The answer is simple…both. Although I am against measure V and W, I do believe we need to support a stakeholder involved re-evaluation of retirement reform and benefits in order to properly secure a fiscally stable municipality.

    Voting No on V and W basically means your against corruption on behalf of the city and believe cops and firefighters will do as they traditionally have always done…the right thing.

  11. Measure V & W should be YES for real fairness.
    Many people lost their job and a lot of people got pay cut. My pay is still same as 1999. before Dot-com burst in 2000~2002 and Recession in 2008~now.
    How come all public employee pays keep going up with unreasonable pension package. My income is getting less, but there are more taxes.
    I’ve been working for private companies as engineer for 25 years, but never got any fortune from stock option and have no life-time pension at all.
    I own one 3-bed room house ($400k), but how come the property tax is $6k with all kind of unknown tax including CO retirement bonds?
    How come they do not share this financial difficulties with us ?
    Where is the morality of the public servants ?

    • SJ TP

      Yes, TP seems appropriate. That’s a nice socialist answer you have espoused – that because the income of some has declined, the income of others also ought to decline. Read Orwell? Ever? Your answer is nothing more than guilt-based redistribution and fails to address the underlying questions relevant to Measures V and W. Are they fair, reasonable and intelligent solutions to San Jose’s structural budget deficit? Does a structural deficit actually exist wherein City leadership has comprehensively evaluated spending and adequately funded those core services which are the primary function of municipal administration before all other services or expenditures are considered.

      FYI, the core services provided by government of which I speak are as follows: infrastructure, administration, public safety and education. All other expenditures must be considered to be secondary considerations.

      Lastly, because these measures, by intent and probable outcome, affect public safety almost exclusively, the larger issue is this: how will the passage of Measures V and W affect the ability of the City of San Jose to attract competent qualified candidates to position in public safety in a time when the pool of qualified candidates is shrinking and when other agencies, even currently, offer far better pay/benefit packages to their public safety employess and whose city leadership has a track record of decisions and behavior which are more responsible and more trustworthy than San Jose’s.

  12. Question to David:
    If parks and libraries are not part of a city’s core services, then who is responsible for them? Should the County gov’t take over municipal libraries and parks? By the way, I too am concerned about San Jose’s casual treatment of its fiduciary responsibilities over the years: the San Jose RDA has been famous among planners and planning consultants throughout the state for bragging about how much it spent on projects; developers have always had a free rein in this town, especially when helped by former city officials; and the number and quality of consultants kept busy at taxpayer expense is very questionable (please spare us any more MIG); special interests often get rent-free use of public building at the expense of residents in surrounding neighborhoods, etc. etc. The City has squandered much of its funds by building edifices to itself that it could not afford, by not charging rent on its facilities to groups with cash/political pull, by not planning for a “rainy day,” etc. The City cannot afford the police and fire dept pensions, but then it has been disturbing to see City officials at public meetings demonize city employees and turning people against each other. Such behavior is unprofessional and bordering on demagoguery.

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