Campbell Mayor Lectures San Jose

“It’s Not Fair To Make Public Unions The Scapegoats…Unions Are Not Devils,” writes Evan Low, mayor of the City of Campbell, in a recent opinion piece published by the Mercury News. “In these tough economic times, we cannot stereotype or demonize one another or strictly adhere to political ideologies. We need to look at what’s fair and what’s right considering the limited resources we have…”

But is it stereotyping or demonizing to just examine the facts surrounding city, county, and state governments’ budget situations?  After all, numbers don’t lie.

For San Jose, the average cost for each San Jose city worker has gone up 64 percent since 2000. Had pay and benefits increased at the rate of inflation (as measured by the Consumer Price Index) the average cost per employee would have risen only 18 percent.

In terms of fairness, is it “fair” that San Jose city residents have had to endure cuts in service levels year after year in order to balance the budget (or should I say, “make payroll”)? If San Jose city workers’ pay levels had been tied to the rate of inflation, with bonuses distributed in surplus years, the city would have an entirely different look to it.

In terms of the pension reform ballot measure that San Jose voters will vote on in November, Low writes, “Generally, I oppose placing complex issues, such as pension reform, on the ballot for people to vote. The people live tough enough lives working their own jobs too. As elected officials, especially for tough and complex issues, we must say clearly that the buck stops with us.”

Is it really all that complex for people to understand that one segment of our society receives guaranteed levels of compensation at the expense of another? And, that that exchange has, to some degree, caused a reduced standard of living for an entire population? My sense is that the citizens of San Jose will somehow find a way to make time from their “tough” lives to be heard on this issue.

In his article “The Bankrupting of America,” Mortimer Zuckerman, chairman and editor of U.S. News and World Report, wrote: “City government was developed to serve its citizens. Today the citizenry is working in large part to serve the government. It is always hard to shrink government spending. It is particularly difficult when public sector unions have such a unique level of pressure. We have to escape this cycle or it will crush us.”

27 Comments

  1. Pete,
    I must say that the continued bashing of government employees is getting old. To say that employee pay and benefits is bankrupting cities is, in my mind any way, a scapegoat and a deflection for the overspending of government. If we had electeds that budgeted like the rest of us, and spent money on priorities like libraries, roads, parks etc., and stopped helping their lobbyist buddies, things would be a lot different.

    Case in point, even during the best of financial times, our roads, libraries, parks, and public safety services were ignored. No one in non-union jobs in government went without huge pay raises and perks. So let’s not get caught up in the rhetoric and look at the facts.

    Secondly, arbitration has occurred because the city, not unions, cry impasse because when the city goes into discussions, they do not go in good faith but with a hardball attitude. You can’t have good faith negotiation unless there’s give and take. The city always has a bottom line position they won’t budge from and therein lays the problem. 

    Mayor Low is correct. Working together is the best option. Demonizing, hardballing, and scapegoating only serve to divide one from reaching a fair and equitable solution for everyone concerned.

    • Are you serious? You say “No one in non-union jobs in government went without huge pay raises and perk” Really? In what alternate reality was/is this true? The private sector has been taking a beating, while grossly overpaid & coddled public unions do better & better.

      Guess what? The only reason your unions do so well is the lack of real competition. Here on planet real world we must compete for customers & can’t just set whatever damned rates we want, market be damned. How many competitors are there for teachers, police or firemen?

      You say the problems are due to “the overspending of gov’t”, but forget that your huge labor costs ARE part of exactly this overspending. But, even if a municipality did spend too much elsewhere that is NOT TAXPAYERS’ PROBLEM. How about you join the rest of us in feeling the effects of management blunders? Where do you get off thinking that you alone should be immune to the economic reality facing the rest of us? No, you are NOT better or more deserving than we are, nor should you get to retire decades earlier & in far better shape.

      Public unions need to be banned, as the conflict of interest is too great. All too often there is no “adversary”, as unions work hard & spend money we can’t imagine to get their people elected, all the while taxpayers are forgotten and treated like sheep.

      We’re on to you now & refuse to be fleeced any longer. Don’t like it? FIne. Quit. No doubt there are hundreds willing to take your place.

  2. Maybe you should interview some residents of San Bruno and ask them how they feel about there public safety budgets and personnel. I applaude Evan Low for speaking the truth about the demonizing public employees, and in this city’s case the police and fire unions. City governments need to prioritize their spending, keeping essential services and reducing or eliminating fluff projects.

    Reducing services across the board will turn them all into half ass agencies, that cannot perform at a minimum standard that the public expect.

    Most taxpayers utilize a small fraction of the services provided by city governments. We do expect our streets to be maintained, and if need be a police officer, firefighter or EMT to show up quickly to our homes.

    The mayor and city council are loving all the negative press city employees are getting. In my experience, I have never been able to trust a politician.

  3. The folks at Goldman Sachs and the other big Wall Street firms are really, really happy that you publish pieces attacking public employees. So are Carly and her team at HP that shipped thousands of jobs overseas. Carly is great at creating jobs—in China. All the mortgage lenders who manipulated people into taking punitive, incomprehensible loans are happy too. Yes, it’s public employees who are responsible for the crisis in the American middle class. Those top 2% who got all the Bush tax cuts, why they’re just fine fellows. Keep saying that until they decide to destroy your economic underpinning too. It will be your fault, no doubt.

    • > So are Carly and her team at HP that shipped thousands of jobs overseas. Carly is great at creating jobs—in China.

      Not to worry, Wanderer.

      All the jobs sent to China have been replaced by green jobs.

      Obama is our president, Barbara Boxer is our senator, the economy has been stimulated and according to our very wise vice president is by now creating 500,000 new jobs every month.

      There is now so much prosperity across the land, that you are going to have to try extra hard to NOT be in the top 2% getting Bush tax cuts.

  4. If only we had back the $600 million spent on the monstrosity of a city hall that we have to pay for for years to come. It isn’t all the city workers fault.

  5. There is some intelligent thought on this issue.

    http://www.governing.com/columns/public-money/hybrid-vigor-pension-evolution.html

    Money changes everything and everyone and when your talking about changing the good deals people have enjoyed in public sector work, the gloves come off and they don’t act polite, reasonable or considerate.

    It’d be the same scenario with social security cuts…if and or when the bubble bursts and the feds have to stop printing funny money.  We’re over committed and the politicians way too generous (and wanting to be popular, go on the let’s not pay as we go for pensions band wagon, which just kicks the can down the road.)

    We’re faced with a lost generation of children in power who have done their best to enrich themselves and leave the bill for the next generation.  And half-ass reforms do nothing except make it clear that the next generation will indeed half to work harder, longer and expect less even while the looters enjoy posh retirements.

    While probably not criminal, its certainly morally bankrupt and just another example of a selfish generation trying to have it all and leave the wreckage for others to clean up.  Big cars, big houses, big pensions, big speeches…little actual public service.  Baby boomers go bust the bank and we are supposed to carry the load for them now?  No thank you.

  6. Perhaps we should invite Mr. Low to move to San Jose and run for office here.

    Whether union or non-union, it is undeniable that payrolls in SJ have gone up precipitously while services have been reduced significantly.  That is a dire combination, and makes little sense.  We’re getting less but paying more.

    I’ve gotta agree with Tom re The Taj Gonzal.  All that money, and it didn’t do what we were PROMISED in the pro-bond arguments—all city employees consolidated into one building, resulting in signifcant savings.

    Unless the powers that be take a hard look at every employee’s work output, unless we change work rules that allow for a lot of standing/sitting around, unless we get a handle on payroll, and unless we eliminate the frills (like The Office of Cultural Affairs, and other feel good, but over our budget, departments) this town will have to file for bankruptcy in the next couple of years.

    And on another subject, our mayor and council want to have the High Speed Rail Line in DTSJ be on pillars above ground.  Step one in the re-ghettoization of DTSJ. $3-4 billion in redevelopment spending gone to waste.

    • > And on another subject, our mayor and council want to have the High Speed Rail Line in DTSJ be on pillars above ground.

      Hmmmm.  If the High Speed Rail Line were built on pillers above ground . . . it might be possible to drive a van full of explosives under the rail line and . . . .

      N-a-a-a-a-h-h. It would probably violate noise pollution ordinances.  No one would ever think of doing something so environmentally insensitive.

    • Hey, either get the facts or stop with the eliminate the Office of Cultural Affairs mantra. It is my understanding that OCA receives no General Fund money, so eliminating it would do nothing to solve the ills being discussed. If you know otherwise, please share your information.

  7. Evan Low-endorsed by Labor Unions
    Evan Low Private Sector Experience-None
    Evan Low run for higher office-endorsed by Labor Unions
    Average Resident-2nd in line to Labor Unions
    Thanks for raising our sales tax!

  8. “For San Jose, the average cost for each San Jose city worker has gone up 64 percent since 2000. Had pay and benefits increased at the rate of inflation (as measured by the Consumer Price Index) the average cost per employee would have risen only 18 percent.”

    That’s the only part of the article that really matters.  Say what you want about unions, Evan Low, etc., that just wasn’t (and isn’t) viable or responsible.  Its bad government, period, and the fault lies with our elected public officials (although the solution is highly unlikely to be one which the public employees unions would approve).

    • First, get off all this “average” crap. Until you separate the uniformed compensation from the remainder, you will never get a fair view of the problem. When is anyone going to get this through their thick dogmatic skulls!? The City Engineer’s COLA’s consistently dropped below the area cost of living and with their backs against the wall, with much hesitation joined a union. They just got their take home pay cut by $800 per month. Second, the Price Index does not reflect the Health Care increases.

      Per the Mercury 2008 salary survey, 475 Fire Captains paid avg. $153k total compensation = $53+ mil. 350 Police Sergeants x $128k avg = 60.8 mil. No college degree of any kind required. 350 Associate Engineers @ $99k avg. = $35.5 mil. All with B.S. degrees. Now lets see, were should we start? Hmmmm. By the way, the Police and Engineers base salaries are both 15% above the national average, in the most expensive region in the USA. The Engineers get no O.T. and little “Other Compensation”. Its these categories that puts the uniformed off the charts. How many engines do we have anyway? for 350 Captains.

      • ?????Check your numbers????….. You wrote “475 Fire Captains paid avg. $153k total compensation = $53+ mil. 350 Police Sergeants x $128k avg = 60.8 mil. No college degree of any kind required. 350 Associate Engineers @ $99k avg. = $35.5 mil.” 

        Your math is way off….

        475 X 153k = 72.6 mil.
        350 X 128k = 44.8 mil.
        350 X 99k   = 34.6 mil.

        (Don’t forget total compensation is the city’s cost of to employ an individual which is not the actual salary that the employee takes home… Your mixing numbers (apples and oranges)

        There are only 658 Uniformed Firefighters in the SJFD, I guarantee you that 72% of them are NOT captains…..

        You also asked how many Engines are there??  There are 129 Fire Companies that require a Captain….. 43 Fire Companies x 3 shifts.

        Not sure exactly your point here but I hope that helps….

  9. We definitely need better negotiators re pay/pension issues.  The lessons of the previous decade are either that our mayor and counclimembers got their asses kicked by better negotiators…or, perhaps, those with big union bucks in their campaign coffers just folded and forgot that they were working for the people of SJ, not the SBLC, SEIU, AFSCME, etc..

    • Government checks and balances were neutered by past mayor who replaced both city manager and redevelopment executive director with his guys.

      The original way the system was supposed to work was with a strong city manager who looked at the long view and served as a balance for the part-time political leaders.  Turning it into a patronage position beholden to a strong mayor destroyed the checks and balances.

  10. Pete,

    It is surprising that you would take this position with the Mayor of Campbell.  Campbell is the only city in our county to have pension reform on the books.  He just pointed out it can be done in a better more productive way.  To his point of elected officials not doing their job and asking the voters to do it instead, you only beat the unions are evil drum louder.  So, is it reform you are after or is it payback in the form of continued villainization of public employees for what you see as the cause of demise to the “entire population.”

    • Jason:
      There are a lot of hard working dedicated people working for the City of San Jose.  There are also a lot of hard working dedicated people who work in the private sector who have had their jobs cut or pay and benefits frozen because of the state of the economy.  Is it “fair” that public employees receive pay increases and guranteed rates of return on their pensions in years when the budget is in deficit?

  11. San Jose’s financial problems are the result of poor decisions made by San Jose leaders over the last 40 years.  The bad decisions and poor planning are now coming home to haunt the citizens and employees of this city and it will only get worse until San Jose balances its jobs and housing.

    To understand how San Jose got into this financial mess you need only read the ‘Economic Strategy 2010’ report prepared by the City’s own Office of Economic Development and approved by the City Council on February 8, 2010.

    On page 37, it says “For decades, San Jose has been troubled by weak job growth relative to growth in housing and population.  Among the top 20 cities in America, San Jose is the only city whose daytime population of workers is smaller than its nighttime population of residents.”  This means that more people live in San Jose than work in San Jose—the definition of a ‘Bedroom Community’.  San Jose has let housing outgrow the jobs needed to support all of the services provided by the City.  While a city like Sunnyvale has 16 jobs for every 10 residents, San Jose only has 4 jobs for every 10 residents.  This is very obvious if you watch the morning commute on 87 and 101 as all of the folks living in South San Jose and Evergreen drive to their jobs in Santa Clara, Sunnyvale, Mountain View, Palo Alto, all the way up the Peninsula to San Francisco.

    On page 22, it says “ … San Jose remains 20% below its retail potential.”  This means that San Jose still hasn’t developed enough retail shopping centers to meet the demands of its residents, resulting in them spending more sales tax dollars in other neighboring cities, thereby depriving San Jose’s General Fund of the much needed revenue.

    On page 20, it says that the City “Received A+ rating from the Bay Area Council for the city’s efforts to produce its ‘fair share’ of the region’s housing needs across income categories. “  While this sounds good, you have to look at it in terms of the quote above from page 37.  San Jose builds massive amounts of new housing, thereby requiring more and more General Fund money to provide the Police, Fire, Parks, Library, Street Maintenance and other services needed by residents.  Should San Jose be building massive amounts of new housing when the City doesn’t have the jobs and tax revenue to support it?

    For the 10th largest City in the United States, being a Bedroom Community is not sustainable.  San Jose has a population of 1,000,000, but only 400,000 jobs.  Every other Top 20 city would have at least 1,000,000 jobs for every 1,000,000 residents.  Imagine what San Jose would look like with another 600,000 jobs.  Imagine how this City would thrive.

    As long as San Jose continues to build in an unbalanced fashion, it will not be the ‘Capital of Silicon Valley’, it will continue to be the ‘Bedroom Community to Silicon Valley’.

    • I couldn’t agree with you more. Don’t you find it incredible that San Jose has annexed 48 communities in the past few years from the county? Not to mention many of these are crime infested areas which is why the county wanted to dump them. The imbalance between tax dollars from business and residents is staggering; that is the heart of the problem.

  12. I have a good friend who is a Firefighter. I would like to share some “behind the scenes” facts about being a Firefighter that I have not seen mentioned in any of the articles discussing their “exorbitant” pay and pensions.

    Hours worked – Firefighters in the Bay Area work 24 hr shifts. This means they work either 48 or 72 hours each week, averaging a 56 hour work week. This means that compared to the “average” 40 hour work week that their salaries are typically compared to, they work an extra 832 hours per year. These 832 hours are not paid as “overtime” or “time-and-a-half” but at the base pay rate. So, in essence, they work 40% more hours than the jobs that their pay is compared to (almost a job and a half, if you will).

    Days worked – When was the last time an “average” worker had to work on Christmas or Thanksgiving or other holidays. Granted, working a 24 hour schedule, leads to a greater number of “days off”, but this also means that there is a 1 in 3 chance of working any holiday or weekend day. This may not seem like a big deal, but it does a have a BIG impact on families and friends of Firefighters.

    Job Risks – Any rational person can think of a ton of risks that our Firefighters take every day, but trust me there are a bunch more you never know about. The risk I am talking about is LONG TERM HEALTH risks. Did you know that a Firefighter’s cancer risk is significantly HIGHER than someone working an “average” job, and the average life span of a retired firefighter is significantly LOWER than the “average” retiree? Despite this fact, many of the “experts” base their pension calculations on the expectation that firefighters will live as long as the average retiree, even though, because of the nature of their job and the inherent risks that go along with it, they simply don’t live as long.

    Overtime – Admittedly, the dollar amount some employees have made in overtime is large, but this is the rare exception and VERY far from the norm. A small but still significant fact to keep in mind is that a if nobody volunteers to work the overtime hours, a Firefighter is forced to work that time. Granted, they are compensated at “time and a half”, but when that forced overtime happens on a Saturday during Little League season, or on your child’s birthday, or on Christmas, suddenly that extra compensation is far from equal to the impact it has on a Firefighter’s family.

    By stating these facts, I am not trying to sway your opinion one way or the other on the issue of Firefighter compensation. Obviously you can imagine where I stand on the matter, but I wanted to shed a little more “light of reality” for those of you who want to be fully educated on the issue.

    The above are facts that even the Firefighters wont use to defend their salaries, simply because they love what they do and they view it as “part of the job”. The reality is that many of us who have “average” jobs wont ever have to deal with the above issues as “part of our job”.

    ……just some food for thought and some Things2KeepInMind……..

    • Things2KeepInMind – you are wrong in your assertion that firefighters have lower life expectancies. In the past, before better breathing apparatus and other safety measures were implemented, that may have been true. But CalPERS own actuarial data shows there is virtually NO difference between a firefighter and the average citizen. None. I’m getting tired of hearing that argument.

      You may want to think about factors not shared with you by your neighbor:
      1 – The cost to fund firefighter pensions is understated by nearly 100%, because these pension funds will NOT earn the 8.0% returns they use in their projections. Those rates of returns went away when the 40 year debt bubble burst.
      2 – Firefighters contribute almost nothing to their lifetime health benefits and pension benefits. When you add up the current year funding requirements for these benefits, you have to DOUBLE their cost above what they make in salary.
      3 – Most firefighter contracts call for them to work three shifts of 24 hours every nine days, i.e., they work one in every three days. But when you factor in their vacation and holidays, they actually are only required to work two shifts of 24 hours per week, i.e., 2 days in every 7 days. Let’s please remember they manage to sleep and eat during these shifts, at least most of the time.

      If you add up these numbers, you will find the TOTAL compensation for firefighters AVERAGES nearly $200K per year. Frankly I think this is obscene. The reason they make this much is because their unions, who use dues that, ultimately, taxpayers funded, control our politicians. They deploy overwhelming amounts of money to buy our elections. Then when people complain, their unions spew a bunch of BS about “evil corporations” and “Wall Street.” The reality is their pension funds feed Wall Street, they’re in bed with Wall Street.

      Let’s put it this way – whenever a firefighter job opening comes along, there are thousands of applicants. If you cut their salary and benefits by 50%, there would still be plenty of applicants. If these guys would stop believing their sick, criminal BS propaganda from their unions, and started to act like men who wear badges and are supposed to be role models, they would renounce their unions, reduce their pay, and start to live in the real world with the rest of us, where you have to earn what you make.

  13. Calpers says firefighters live longer than others- i dont know where you get that information

    http://www.davisvanguard.org/index.php?option=com_content&view=article&id=2977:calpers-debunks-myth-of-shorter-life-expectancy-for-safety-employees&Itemid=79

    I think the number of fires is down 80% over the past 20 years but I cant find it now.  Better codes and sprinkler systems are the cause.

    Firefighter jobs have always been a political patronage plum and are very tough and emotional to analyze.  Good luck to all.

  14. Things2KeepInMind Mon, Sep 27, 2010 – 10:15 am

    Hours worked – Firefighters in the Bay Area work 24 hr shifts. This means they work either 48 or 72 hours each week, averaging a 56 hour work week. This means that compared to the “average” 40 hour work week that their salaries are typically compared to, they work an extra 832 hours per year.
    ==============
    Lie #1;
    Sleeping 35% of those hours is not work..
    .
    .
    .

    Job Risks – Any rational person can think of a ton of risks that our Firefighters take every day, but trust me there are a bunch more you never know about. The risk I am talking about is LONG TERM HEALTH risks. Did you know that a Firefighter’s cancer risk is significantly HIGHER than someone working an “average” job, and the average life span of a retired firefighter is significantly LOWER than the “average” retiree?
    ===========
    Lie #2;
    FF’s live LONGER than the average person and they do not have higher cancer-or any other disease-rates-

    “CalPERS Debunks Myth of Shorter Life Expectancy For Safety Employees”

    http://www.davisvanguard.org/index.php?option=com_content&view=article&id=2977:calpers-debunks-myth-of-shorter-life-expectancy-for-safety-employees&Itemid=79

    .
    By stating these facts, I am not trying to sway your opinion one way or the other on the issue of Firefighter compensation
    ============
    Lie #3;

    you’re not stating “facts”, you are repeatign the same old whopper lies and talkign points the firewhiners ave been falsely stating for the past 20 years.

  15. CLAWING BACK DEFERRED PAY: THE COLORADO GUIDE

    Obviously, legislators around the country are not quite as sophisticated as their counterparts in Colorado.  It never occurred to them that they could just pass a bill stating “Oh, by the way, we are no longer bound by our contractual obligations.” Simplicity itself! This approach makes life much easier in difficult budgetary times, and takes the burden off of GASB, state and local governments, plan sponsors and the SEC!

    Under Colorado’s “contract breachin’ plan”. . . . . you simply seize vested, accrued, earned, contracted benefits from retirees and pension members (incredibly, with the help of your local union lobbyists) until your unfunded pension liabilities are sufficiently reduced to raise your funded ratio. This plan also improves the status of your bonded debt (keepin’ those SEC fellas happy).

    If you’re as brazen as we are in Colorado you claim that your goal is to achieve a 100 percent funded ratio, instead of the 80 percent level that is considered well-funded in the industry. May as well go for the full 100 percent, no one understands all this pension mumbo jumbo out here in the west.

    The 100 percent goal provides lots of wiggle room for unexpected investment shortfalls, or needed under-funding in the future.  Also, here’s another ingenious provision that we invented. If it happens that God provides you with a lame pension investment staff, they consistently underperform their benchmarks (last year we underperformed by about a billion), and accordingly you have an investment loss for the year, no problemo, just state in the bill you enact that retiree contracted benefits will be further cut to accommodate the loss!  My guess is that when pension investment staff around the country hear about this sweet no-accountability gig they are going to beat a path to Colorado PERA. Where can I get that kind of a job?  To be fair, credit for finding this solution should go to the bright administrators at Colorado PERA.  You can imagine how difficult it is psychologically to advocate a course of action that you yourself have earlier declared illegal, (see this excellent Denver Post article.) http://www.denverpost.com/news/ci_11105271

    We know it’s burdensome for busy pension administrators (particularly short timers) to have to tell elected officials that they really ought to make their annual required contributions . . . it’s much easier to just let those unfunded liabilities build up year after year after year, until you have a good pile, then wipe the slate clean with a good contract breachin’!

    Our Colorado pension administrators are straight shooters.  They’ve been telling us for a couple years now, “We can’t invest our way out of this.”  Now they’re keeping their word . . . by missing their investment performance benchmarks by wide margins.
     
    Meeting contractual obligations?  Performing your fiduciary duty?  Acting in a moral fashion?  No need to fret about these things.  We looked into it in Colorado and dang if they haven’t been optional all along.  Hello state and local governments . . . round up those rascally debt problems and herd ‘em out west to us in Colorado, we’ll fix ‘em right good fer ya!
    (Visit saveperacola.com for more info.)