Council Could Cancel its Own Pensions

Councilmember Pete Constant is leading the charge to terminate the CalPERS pension program for the mayor and City Council. Originally asking City Attorney Rich Doyle to study the proposal in June, Constant’s Dec. 19 memo, which suggests Doyle draft a resolution that gives notice of the city’s intention to terminate its contract with CalPERS, went in front the Rules and Open Govt. Committee on Wednesday and was unanimously approved.

The council will now consider a resolution at its Jan. 24 meeting.

While the move seems to have the support of Mayor Chuck Reed and councilmembers Pierluigi Oliverio and Madison Nguyen, who are on the Rules Committee with Constant, the entire council isn’t necessarily on board. Councilmember Kansen Chu told the Mercury News he has concerns that the move would be mostly symbolic and might end up actually costing the city money. That could be true. The city is still waiting on a detailed report from CalPERS, which “will not prepare a preliminary valuation report for the City until the City Council adopts and delivers to CalPERS a resolution of its intention to terminate its contract,” according to Constant’s memo.

“Quite frankly, if were going to save $160,00 a year, but it costs us $5 million to get out that would be a stupid financial decision,” Constant told SJI. “But if it’s going to cost us $400,000 to get out that would be a good financial decision.”

According to numbers Constant received from CalPERS, “the city has an unfunded liability of $432,000 for just the 11 positions of Mayor and council, as well as the people already retired on the system,” he said.

“If were going to reform pensions, we need to start with us. We’re a pretty young council right now,” Constant said. “The day we turn 55, we would get a pension check for the rest of our lives.”

Well aware of the criticism some website commenters—ahem!—direct his way for the pension he receives from his time as a San Jose police officer, Constant added that he suggested eliminating pensions for the council as far back as last January when meeting with the council salary committee.

“For all the people who complain about double dipping, this isn’t something I just did now,” he said. “This had been in the process for a year.”

Josh Koehn is a former managing editor for San Jose Inside and Metro Silicon Valley.

19 Comments

  1. I’d be more impressed with Constant if he gave up his police disability pension and paid taxes on a regular police pension instead.  I REALLY DON’T UNDERSTAND HOW HE WAS TOO DISABLED TO WORK FOR THE POLICE DEPARTMENT IN SOME CAPACITY BUT IS STILL ABLE TO WORK FULL TIME DOING A CITY COUNCIL PERSONS WORK. I guess he wanted to retire at 37 years old.

    SOME OF THOSE POLICE DISABILITY PENSIONS SEEM PRETTY SUSPECT.

    • First of all nice try but it is illegal, but you looked great on the front page with your never ending lies.  Second PC has a very comfortable living with his photography business and other side jobs.  Third his disability retirement was BS to begin with.  Finally, PC lies flow off his lips just as much as Chuck.

      Let this play out and you will see no changes.  But it was good for public fodder. What has been in process for a year, you were lousy as a police officer and worse as a council member.

      A majority of disability retirements are fraudulent, how can he sit on the very board that granted him his disability?  I can’t tell you how many employees worked just fine either on the street or at a desk until they retired then later changed their retirement status to disabled. If they were so disabled how did they remain on the job in any capacity?  It is all about the money.  The whole system is so flawed.  It is all shady, just watch how many pull back their service disability requests when they know the board will not approve it.

      Way to many scam the system to get a 50% tax free pension like Pete.  He gives the honest well deserving people a bad name.  No wonder the public is miss lead about true earning retirees.  The city needs to assign outside investigators to research these claims instead of just rubber stamping service related retirements.  Ever try to research a service connected disability?  Will not happen because they hide behind the fact that it is confidential.  You are told to go to the boards minutes of view the board meeting on their website but it is just like the city council, all decisions are made behind doors.

      It sickens me to have worked with a lot of these people only to see the retirement board grant them service connected disabilities. It is like the city council, falsify the truth hard enough and you will get your way.  This is why the public is mislead and the city is in such as mess. 

      Go ahead Chuck and PC, PO and the rest of you, attack honest hard working employees and retirees and blame all your bad and illegal decisions on the back of the unions.

      Go tour all your new publicly funded building that remain closed due to your incompetence.

      I’m done and sick to my stomach!

  2. I am a full-time city employee. I was out of work for a couple of months due to
    surgery as a result of a work-related injury. I also have a part-time job which continued to pay me for work that I could do via telephone, because I could not drive to work. The City of San Jose deducted my earnings from my part-time job, from my didability pay, resulting in my receiving no earnings from my second job, despite the fact
    that I did earn that money. The only reason that the City knew about the additional job and earnings is because I reported it and was honest and forthcoming.

    Pete – do your disability earnings reflect a deduction from your second job as a City Councilmember, or do you get any kind of “special treatment”? I hope that you embrace the values of honesty and fairness as our elected representative and former police officer and set the example for city employees. Thank you for your service.

  3. Correct me but I see they want control of their funds.  I wonder what pension regulations would be circumvented by going to a 401k. For example figone has several city paid 401ks to get around pension limits.  I wonder if truely they just want the cash in hand so they do not have worry about a bankruptcy. If the city funds a stadium on top of its massive debt the city will likely go bankrupt. 
      Constant simply wants all of his city pension in cash now so the city or taxpayers cannot come after it. We are seeing more tricks.

  4. Mr. Constant on disability? He can walk, he can sit for long hours in boring meetings, he can talk, he knows the date, time, and who is the President. Thus he meets all the requisites of a City Council Member or at least a member of the City’s Executive Staff. Why is he on disability? I smell a Double Dipper.

  5. This proposal to “terminate” pensions for the Mayor and Council is certainly a noble gesture at first glance. But upon deeper inspection it is nothing more than “grandstanding” on the part of Mayor Reed and Councilman Constant.

    The Public must be aware of regarding the pay and benefit package for the Mayor and Council. The mayor and council’s pay and benefit package is put together by a committee of “volunteer” citizens who are appointed (politically) by the Mayor and Council.  That committee puts together the package and sends it to the full council who (according to Woolfolk and the Mercurynews) “must accept it or something less…”

    http://www.mercurynews.com/pensions/ci_19675143?IADID=Search-www.mercurynews.com-www.mercurynews.com

    So whatever vote the council subcommittee on “Rules and Open Gov’t” took on some memo written by Constant is mildly interesting but it is non-binding and amounts to nothing.

    Further, according to the article, the “citizen’s committee’s” recommendation would apply to FUTURE MAYORS AND COUNCILMEMBERS as opposed to CURRENT mayors and council members.

    Don’t believe it? You believe that Reed and Constant are serious about giving up THEIR PENSIONS? Fine, the devil (or Reed or Constant) is in the details. The City Attorney has done some research and learned that terminating the City’s contract with CalPers will result in the City (We the Taxpayers) being on the hook for the “unfunded liability.”

    If we are truly eliminating all pensions for present and future mayors and councilpersons HOW CAN THERE BE ANY LIABILITY much less an UNFUNDED ONE?  Are the existing pensioners actuarially underfunded? Maybe but Actuarials fluctuate, as we all well know (drastically even), depending on which way the wind is blowing on any given day. The $400K number now could be ZERO next year or it could be $1million….

    No, I think that the only fair thing to do is to include the Mayor and Council Pension in the Pension Reform Ballot Measure that Mayor Reed, Councilman Constant and their supporters approved last month. They are CERTAIN of its inherent fairness and have gone to great lengths to convince voters in San Jose that it is the only way to fix the problem. 

    Let’s examine a few of the provisions in Mayor Reeds Ballot measure and ask ourselves why Term limited Employees like Reed and the Council should be exempt from the provisions that they seek to impose on career City Employees. Shall we?

    •  New Employees would be placed in a new, lower-cost, hybrid retirement plan (view details)
    o   This includes Option 1 FOR EXISTING City employees who will be given the UNREASONABLE choice to contribute an extra 5%/year towards their retirement or opt into some lower paying plan.
    Fair, Right? Sure it is, the Mayor and Council members currently pay nothing! The Taxpayer pays it all so the mayor and council would start paying 5%! Big deal considering a cop who sticks with the existing legally binding contract currently pays about 22% and will (for starters) pay 27% when the ballot measure passes! But that is not all.  That 5% increases by 5% every year and caps at 25% TO PAY for THE PLAN’s UNFUNDED LIABILITY!
        So Reed and Constant ballot measure if applied to their pensions means that their cost increases by 55 and is capped at 25%. That is fair considering that a Cop or Fire fighters cost will increase by the same amount (on top of what they currently pay). Doing the math cops/firefighters could be paying 25% more on top of the current 22% meaning they will be paying about 47% of their salaries towards their pensions because of the unfunded liability!
    o   COLA is capped at 1.5% ( I think CalPers is a 3%/year club)
    o   1.5% salary per year of Service?  Not a drastic cut from the current 2% especially considering most City Workers are giving up the same ½% and Cops/Firefighters are looking at loosing a full 1 or 2% depending on how old they are!
    •  Voter approval would be required to enhance retirement benefits in the future
    o   The Mayor and Council (by not including their pensions in this measure) have conveniently left the ability to enhance their pension benefits up to themselves.

    Are yo starting to see the picture? This is what politicians do with your money! Easy for them to say “we give up our pensions!” But they didn’t pay for “their”
    pensions – WE DID! Breaking the contract with Cal PERs will apparently cost some money! They admit that it will cost the TAXPAYERS money – not them because the are exempt from paying the unfunded liability because they exempted themselves from the ballot reform measure!  They (Reed and Constant) are out nothing! They can’t loose what they never had and certainly never paid for! But without any shame are wiling to take away from the Taxpayer and from career city employees – shame on them! 

    Demand that Reed , Constant and Company include their pensions in the Ballot Measure that they are proceeding with!

  6. – Press Release –

    Aware as I am of the dismal shape of our state highway fund, I today announce my good intention to put my car into storage so that I might reduce, by one, the state’s per vehicle cost of road repair and police patrol. As much as I would like to act immediately upon the good intention which I today hope to see make the news, I am forced to wait until the numbers are crunched and it is determined (after factoring in gas tax revenues, traffic fines, and bridge and registration fees) that taking my car off the street will actually save, rather than cost, the state money.

    Though I experienced not a moment’s hesitation in rushing to share this grand news with the public my wife did ask me, in a very disapproving manner, why I didn’t just keep my plan to myself until I knew for sure that it would save the public money. After thinking about her question long and hard I arrived at what seems to be an inescapable conclusion: I guess I’m just an opportunistic asshole.

  7. Here is a good one: Name the only job where you work 8 years and get full medical for life?
    Answer: City Council or Mayor! What a joke!

  8. “Council Could Cancel its Own Pensions”

    If the esteemed Mayor Reed is to be believed then the Council CANNOT “cancel” its own pensions.

    Mayor Reed has stated over and over and over and over and over….again that pensions can ONLY be reformed through changes in the San Jose City Charter.  According to “Honest” Reed, the Charter can only be amended by the will of the electorate as expressed through the ballot box.

    This is why Reed and the Council gave us Measure’s V and W and it is why they created the Pension Reform Ballot measure.

    The real question is why are these 2-bit phoneys bringing this up NOW? They obviously know that all they are spewing is bilgewater!

  9. Let’s all take a giant leap and pretend for a moment that:
    – man made global warming is all a great hoax.
    – Al Gore is the biggest fraud of the last 100 years.

    Ok. 

    Now if we’re not really, really, really certain, and we’re just taking Al Gore’s word for it, that the oceans are going to rise, etc. 

    And if we’re not really, really certain the climate is going to be impacted one iota by what San Jose is doing with regards to it’s “green-ness”.

    Then the question is why? 

    Why does the City continue to spend what we don’t have to be green?  A “living roof” on a police station?  For crying out loud.

    On the other hand, we know, with absolute 100% undeniable certitude, that our roads are crumbling, public safety is understaffed, and on and on.

    How much money could be saved if the city went with traditional methods instead of “green” methods?  Can we get an honest reporting from the council?

    Now provide the same cost analysis for social engineering programs like affordable housing, living wage, etc.

    Now provide the same cost analysis for the arts, police substation art, etc.

    Rinse and repeat.

    • But if global warming is a hoax, and Al Gore is a fraud, wouldn’t that mean that the California Air Resources Board and the California Global Warming Solutions Act are just great big useless wasteful piles of “crop” (as Arnold Scwarzeneggar might say)?

      But, we DO have a California Global Warming Solutions Act, and bureaucrats ARE spending money to stop global warming.

      So, global warming must be real.  Right?

  10. In the private sector, if you make a promise, a bad promise that is a bad deal for you, you are still responsible for your promise.

    Maybe the govt should not have hired so many people. Maybe the govt should not have offered such good compensation.

    But they did & every tenet of capitalism and fair dealing says if you make a bad decision you have to honor it….and learn from it to not make the mistake again.

    You dont rip people off after 20-30 years of reliance because YOU made a boo boo.

    Make a promise, keep a promise.

    • ReilleyFam , you got it right ! More than likely because you have Integrity , Honor , & Courage of Conviction………….Qualitys this Mayor and Council cannot begin to understand. when I was a little boy my Grandfather(R.I.P.) told me “Say what you mean and Mean what you say. You stand by your word , No matter What! Im sorry to say there are’nt too many men like my grandpa

  11. This Mayor and his Hanger- ons are all a bunch crooks (S. Liccardo , P. Constant,M. Ngyun,R. Hererra.P.Oliverio) Nothing but a bunch of blowhards! They know damn well they cant do this . Its just their way of grandstanding. Sorry to say this but “to bad for you ” the residents of San Jose are disgusted with your sheer Corruption ,Lies and misrepresentation of the facts and truth. go ahead continue patting yourselves on the backs……….the residents are tired of you deceit

  12. PO,

    this is why the public is so mislead by you, Chuck and your bed fellows the Mercky News.

    “Cushy pensions are pushing San Jose to the brink of insolvency and ravaging city services. So it was refreshing last week when Councilman Pete Constant began pushing through a proposal to get rid of pensions for City Council members.

    What a concept — leading by example.”

    Most people will buy this crap not know for one it is illegal and two you clowns will not give up your so called pensions.  You will get your money just you will call it something else.

    Brink of Insolvency, give me a break!!  Meanwhile let give land away and build a ball park, let commission an art project, I’m done, there is just to much crap to write about.

  13. so Let me get this straight , the same 11 people are on (Mayor & Council)

    1) City Council

    2) RDA Board

    3) Financing Com. (Headed by Doug Figone)

    4) Diridon Developement Agency

    WOW! No wonder this Corrupt Mayor and Council has been able to do what ever he wants . There should be a law prohibiting being on multiple boards that are related to eachother in any way. Talk about conflict of interest

  14. This information is absolutely true! , all of this information is available on the Vitys websites . this mayor and council will stop at nothing to get what they want …at all costs!

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