Pensions, Pensions, and Pensions.

Everyone’s talking pensions and benefits these days.  It’s the elephant in the room that can no longer be avoided.  Even the Mercury News Editorial Board has found religion on the subject, endorsing the passage of Measures V and W.  “As to pensions, there’s a recognition across the nation that the level of public sector pensions is not sustainable…spiraling towards bankruptcy serves no one.”

And… former Mayor Willie Brown has “turned to the dark side,” supporting Jeff Adachi’s pension reform measure in San Francisco.  From SF Chronicle columnists Matier and Ross; “‘This is bull,’ Police Officers Association President Gray Delagnes said…‘These workers walked precincts for him when he was mayor, and now he’s banging them over the head,’”  “‘They’re wrong,’ said an unapologetic Brown.  ‘This isn’t anti-labor.  This is just an effort to get some intelligence into the pension system because we public officials have screwed up.’”

In San Jose, pension costs have tripled over the last decade, yet there are now 1,000 fewer city employees working.  That translates to a huge decline in the level of city services.  In their September 26th editorial, the Mercury News exposed the silly (and disingenuous) argument being circulated by some opponents to pension reform.  “The measures’ opponents, including police and fire unions, argue that they will result in even deeper cuts to public safety.  The opposite is true.  By controlling per-employee costs, the city can increase services and hire more employees.”  This is “math” that a sixth grader could understand.

In a recently broadcast commentary, Robert Kieve, President of Empire Broadcasting quoted New York Times’ columnist David Brooks.  “The (Democratic) Party believes in the positive uses of government.  But if you want the country to share that belief, you have to provide a government that is nimble, tough-minded and effective.  That means occasionally standing up to the excessive demands of public employee unions.  Instead of standing up to those demands, the (Democratic) Party has become captured by the unions.”  Mr. Kieve added, “How’s that for a description of a national situation which is precisely mirrored here in San Jose?”


  1. I just read the City Charter section that covers binding arbitration, and from what it sounds like, if it goes to arbitration, the three people selected (one from the city, one from the union, and a third person selected by the first two arbitrators)already factor in “wages, hours, and other terms and conditions of public and private employment, including, but not limited to, changes in the average consumer price index for goods and services, the wages, hours, and other terms and conditions of employment of other employees performing similar services, and the financial condition of the City and its ability to meet the cost of the award.
    The arbitrator is provided a list of issues and offers from ‘labor’ and ‘city’.  (ie:labor wants a raise of 5% vs. city wants a raise of 1.2%).  The arbitrator is given the list of all issues on the table and MUST choose one-or-the-other. There is no middle of the road.  The arbitrators remain in business because they have reputations as being impartial. They choose some wins for the city and some for labor. There is never a 100% winner because this would establish a nonbiased work history for the arbitrator and he/she would be guaranteeing it would be their last job.  So, it is basically fair. 
    This is the last, final, and only piece of leverage people who labor for the city have when it comes to contract negotiations.  Other unions have the ability to strike, Police and Fire cannot strike. It would guarantee anarchy and it’s also illegal.  Removing binding arbitration would be guaranteeing these folks could be raked over the coals with no way to have a fair negotiation.  I don’t understand how giving more power to the city council (essentially removing binding arbitration) would fix any of the city’s financial woes, considering their spending practices have also gotten us into this mess.

  2. > This is the last, final, and only piece of leverage people who labor for the city have when it comes to contract negotiations. 

    The adversary class-warfare model simply does not fit in the government context.  In a self-governing constitutional republic the government IS the people.

    To steal a quote from the French Revolution, “the voice of the people is the voice of God.”

    The people’s government proposes what public safety services they want to provide and the terms of service, pay and benefits offered to the providers.  The prospective providers can take it or leave it.

    That’s it.  No unions.  No negotiations.  No bargaining.

    The will of the people is not and should never be subject to coercive demands by self-interested colluding bands of mercenaries.

    If the people do not like the terms of employment offered to public employees, it is up to the people to change the government, NOT up to the unions to coerce the government.

    The idea of public employee unions is fundamentally incompatible with representative democracy.  Our concept of government allows for a separation of powers between executive, legislative, and judicial entitities.  There is no place for a fourth, unionized employee,  element of government.

    We need a state consitutional amendment to prohibit public employee unions.

    • Bronco Bummah,
      “the voice of the people is the voice of God.”

      Now that’s funny. Have you ever attended a Council Meeting and been limited to 1 minute, after waiting HOURS listening to Council Members yacking on and on issues they have already decided how to vote on? No one on the Council gives one crap about our opinion. They over spend and give into lobbying. They are always the ones who bypass negotiation and move straight to arbitration, not the Unions.

      Council Member Oliverio has tried in vain to get negotiations public, and the Unions have agreed to public negotiations. Ask yourself WHY the City opposes doing that and WHY they don’t stop over spending.

      Binding arbitration is vital to fairness. I will be voting NO on both V and W.

      • I’m really shocked that they cut public commenting down to one minute.  Why bother?  I went down there last summer and waited a couple hours to have my say, but two minutes, as brief as it may be, at least allows you to formulate some sort of coherent thought.  Who but an illiterate would have any interest in sputtering for under a minute?

        One reason I would never set up a Twitter account is I’m generally not interested in things people can say in 140 characters or less.  A one minute commenting time is like that; its effectively censorship.

        • 1 minute forces you to be focused and to the point.  It limits rambling, ranting and incoherent rage.  It promotes concise thought that can form and inform debate, or add to a position.  If the time is used wisely the council members do pay attention.
          The reason why you bother to go is because it does take a helluva lot of effort to go to city hall and that the effort is recognized.

        • The biggest probl;em with the so-called public comment portion of the council meetings is that is scheduled at a time after the councilmembers have decided how they will vote.  it’s a complete sham.

      • “Binding arbitration is vital to fairness. I will be voting NO on both V and W.”

        Perceived fairness is a luxury we can’t afford.  The cops & firefighters have actual freakin’ jobs, and they pay pretty well.  If that’s not good enough for them, they can step aside and make way for someone willing to do the job at the generous wages & benefits presently offered.

        • > Perceived fairness is a luxury we can’t afford.  The cops & firefighters have actual freakin’ jobs, and they pay pretty well.  If that’s not good enough for them, they can step aside and make way for someone willing to do the job at the generous wages & benefits presently offered.

          You speak wisely.

        • Kevin,
          This coming from a guy who just posted he’s voting for Pegram to keep Rocha in line doesn’t surprise me. Since you and your pal Bronco Bummah think public service is such a piece of cake, I think you two ought to work in the Fire and Police Department for a week and then come back and tell us how “over paid, and greedy” they are. Once you actually see how tough their job is may be you’ll change your mind.

      • > Council Member Oliverio has tried in vain to get negotiations public, and the Unions have agreed to public negotiations. Ask yourself WHY the City opposes doing that and WHY they don’t stop over spending.

        > Binding arbitration is vital to fairness.

        Why should the Government of the People negotiate with their servants?  Or submit to arbitration?

        The will of the people is not a bargaining chip.

        • BB:

          What is next from you and Kevin with your we should be glad we are lucky enough to have “actual freak’n jobs” approach?!

          With all your pining about police and firefighters, aka “servants”, where is “LET THEN EAT CAKE”.

          I’ll be voting NO on V and W. With City Hall pushing it so hard citizens would do well to BEWARE, yes will come with a steep price.

        • If Chuck Reed sounded like me, he would be governor and on his way to being president.  Chuck Reed is too wimpy to sound like me.

          And, yes, I feel that the people are above their public servants.

          I believe in government by the people and for the people, not government by the servants for the servants.

          If you don’t like being a public servant, either get counseling for your attitude problem, or open a hot stand and be your own boss.

          I never said city workers are “garbage”; you did.

          But city workers must know who they work for, who pays them, and what their employers, the government of the people, requires of them for satisfactory performance.

          So far, you’re getting a “Fails to meet basic requirements” on your job performance review.

          And by the way, you shouldn’t be hearing this just from me; Chuck Reed should be telling you this, too.  He’s just too wimpy.

        • I agree with Officer X 110%  Some Major problems at City Hall.  We need more cops, not lay them off in the next round of layoffs. 

          The priorities and checks and balances are way out of whack. 

          Did anyone catch that “crook” Reed on the news last night talking about the cops?  The guy thinks he knows everything, he has not clue. 

          He’s more like “Mr. Potato Head” if you ask me,he changes his face to suit the situation.

          Old Frank

    • “We need a state consitutional amendment to prohibit public employee unions.”

      The only fair tradeoff to that would be to allow public safety employees to strike, like any other employee.

      Public safety unions and binding arbitration counterbalance the fact that it is illegal in California for Public Safety Employees to go on strike.

      • Dear Anti-Cold Warrior:

        You are confused.

        The Soviets LOVED unions.  The word “soviet” basically means “union”.

        In Lenin’s concept, the Soviet Union was a union of unions.

        In the Soviet union, EVERYONE was a member of a union and unions ran everything.  It was a “union worker’s paradise”.

        You weren’t paying attention in “Oppressed Worker’s Class”, were you.

    • “The idea of public employee unions is fundamentally incompatible with representative democracy.”

      We can all thank Governor Moonbeam, Jerry Brown, for the existence of public employee unions, which are collectively about to bankrupt alsmost every jurisdiction in this state.

  3. So by the thinking on this board there should be no Unions at all, period? Yeah that worked real well back in the early 1900’s when big business had all the power and the worker had no rights at all. The attitude then was if you don’t like it then leave or we will fire you if you complain. Hmmm sounds just like the posters hear. In your ideal world of a representative republic how do you account for all the outside forces from big business put on politicians. You think Meg Whitman didn’t lobby the city council for benefits for Ebay?
    Unions are not the big bad evil thing that you all try to paint them as, they have in the past and continue now to do much more for the worker than just negotiate wages. They ensure that the employer follows the rules and laws, they look out for worker safety issues, etc. Just because they negotiated a good wage package does not make them evil nor greedy. They are not “thugs” as so many like to say. Sorry but no one is out threatening anyone or bashing doors down. Sorry to bust your fantasy movie bubble of a union!

    • joefire,
      Well said. I think the Union bashing by the public in SOME cases stems from ignorance, and buying into the media hype. They think Unions get everything free. They don’t realize just how much money members put out every paycheck towards benefits and retirement. They also ignore the fact the Union members are TAX PAYERS too!

      City workers DO NOT get Social Security either, so they don’t get those benefits when they retire.  They are stuck with the benefits they have and if the City makes bad SPENDING decisions it affects their retirement and benefits. An issue I don’t see covered by the media either!

      Secondly, most of these folks have never been in a Union so they’re talking out of their hats. They don’t like the fact that Union members are covered against an employer’s abuses and they are not. Many Retail businesses give managers schooling in how to say NO to Unionization, and they hire companies to automatically challenge unemployment claims, and LIE about why you were let go or fired, but we don’t see the media addressing that, now do we?

      • City workers do not GET Social Security? Well that’s because, unlike us poor saps in the private sector, they don’t have to pay INTO Social Security. Pretty sweet deal if you ask me.

        • Umm, what do you pay into Social Security?  Maybe 3% on top of all the other taxes.  Try paying 23% on top of taxes, because that is what is paid by each employee.  If you feel pensions are not fair and would like something similar, put 20% into a 401K plan for 30 years.  Oh…I forgot to mention that’s 23% of your gross income.  It’s hard to imagine investing almost a quarter of your earnings but that’s what we have to do for a pension.  Yes, it’s a big chunk…and it does make our take home income substantially less than what everyone perceives.  I just thought you’d be interested to know that it’s funded by the employees and not a luxurious benefit, as you may have thought.

        • What really sucks John is that I worked in the private sector for many years prior to working for the city. I paid thousands into social security. What really sucks is that because someday I will get a retirement from the city I am prohibited from collecting social security and have lost thousands and thousands of dollars subsidizing those collecting social security.

        • I’ve been hearing this 23% figure and I also understand that the City’s contribution is $8 for every $3 the employee contributes. So doesn’t that mean that while the employee is contributing 23% the City is kicking in 61%? I would be thrilled- absolutely giddy- if for every $23 I put in my retirement account somebody else would add $61. But then again, I would never ask somebody else to do that.

          Not sure where you get your 3% figure. As a self employed person I pay 15.3% of GROSS earnings into Social Security/Medicare. Nobody else contributes a cent. Full benefits will kick in not at age 55 but at 67 and they will be a fraction of that of a comparable earner in the public sector.
          Like I said, public employees have got a sweet deal. Astonishingly, many of them don’t seem to realize it.

        • So let’s say you and I wind up working for the same number of years and earn about the same amount during the course of our working lives. Will you be willing to trade your City retirement benefit for my Social Security one?

          All I’m saying, Tom, is that it is fundamentally unfair to require some people to participate in a program while exempting others from it. Sounds like discrimination and it’s the private sector workers who are being discriminated against. Either we should ALL have the burden of Social Security or none of us should.

        • > Full benefits will kick in not at age 55 but at 67 and they will be a fraction of that of a comparable earner in the public sector.

          Oh, wow, Galtie.  There’s a huge difference in getting benefits at age 55 versus age 67.

          You’re really getting screwed!

          Oh, wait.  I’M GETTING SCREWED TOO!!!

          This is unfair!  The government should do something!!

        • You’re right Bronco, but the people in government don’t want to do anything that’s not in THEIR own interest, Bronco.
          We have government By the Government and For the Government.

  4. San Jose’s police and fire pension plan arose from the best of intentions, created by responsible civic leaders who understood that a rock solid pension plan would BENEFIT THE PUBLIC, providing the people with the stable and professional public safety that history had shown was otherwise unattainable. Transient police officers, well-endowed with self-interest but devoid of civic commitment, had proved themselves to be, at best, unreliable, at worst, indistinguishable from the criminal element, leaving civic leaders compelled to find a mechanism that would attract and retain good men. The pension plan was it, but understand that had the plan not served the public’s interest it would’ve never been offered (I offer as evidence the let-the-employees-be-damned attitude that, prior to collective bargaining, remained the status quo in salary issues).

    The plan arose in the best of economic circumstances; the fund had few obligations, a steadily growing number of contributers, and robust returns from a stock market that eventually elevated the plan to the summit of fiscal achievements, the fully-funded mountaintop. With returns coming in leaps and bounds, the members—who’d never missed a payment and constituted a meager draw on the growing fund, had no cause to ever suspect there was a crack in the infrastructure, no cause to ever doubt the reasonableness of a negotiated benefit, no cause to ever suspect that their fund would threaten the City treasury.

    Unlike other cities, where pension obligations went unfunded by city leaders gambling on the returns of redevelopment (San Diego spent pension contributions on a new baseball stadium), San Jose’s police and fire fund was maintained, and prior to the recession of the last few years the plan—the one that is today called unsustainable, was viewed by analysts and members alike as rock solid, a model of fiscal responsibility.

    Almost overnight arrived the outcry, the condemnation, and, alas, the “unsustainable” declaration. What had changed? Had the retirement board altered its practices? Had members stopped contributing? Had some disastrous new benefit undermined the fund? No, no, and, uh, no. What had changed occurred elsewhere, in the nation’s financial centers—where crooks steal by the billions, and the City of San Jose, caught with its secret liability laid bare, went into damage control mode and began deflecting blame.

    Suddenly the cops and firefighters found themselves on the skewer, accused of doing great damage to the city they served. At once, tens of thousands of frustrated, overtaxed, un-and-underemployed citizens screamed foul, eager to aim their wrath wherever their mayor pointed. It was all due to greed, was the message, along with that damned binding arbitration. Reform was demanded, turned into a moral cause, and put on the ballot.

    But true reform has not been offered. The mayor and others, instead of exposing the underlying rot, have chosen to stand before it, shield it from view, and point their fingers at our cops and firefighters. What’s going on is a power grab, plain and simple, one in which the City has chosen to foster and harness the resentment of voters so that it might permanently disable its employee groups at the bargaining table. Now, I understand how that might please some of you, but you shouldn’t fool yourselves into thinking that our politicians would ever disable a disfavored group without enabling a favored one. Mayor Reed has his own cronies, and don’t think he’ll hesitate to play ball and slip your tax millions to his personal favorites.

  5. P.O.,
    I wondered if you could address the rumor that you were caught illegally removing ‘No on V’ and ‘No on W’ signs from the area of Curtner and Almaden. Sounds like the desperate act of marginalized and unethical politician.

  6. David, it is true!  I just saw the video and I am saddened! Although I do not agree with Pier Luigi on various issues, that is the beauty of America! I think that it is not always important to agree with someone (Council person), or to like them, but to respect them is important!  I have lost respect for Pier Luigi!!!!

  7. Yes he did. What else has he stolen from the city. That is why binding arbitration is need the way it is. This is what the leaders do steal and hide thing from the public. Arbitration will keep the mayor and city council honest.

  8. I understand that one of the central issues to this incident is whether or not the signs were, in fact, placed in a public right of way. The answer to this question will establish whether or not a criminal act has occurred.

    However, there is another issue at stake – that of credibility.
    1. The ‘No on V/W’ signs were obviously hidden underneat the ‘Yes on V/W’ signs. According to the witnesses and reporting parties, they, apparently, followed PLO immediately after he removed oppisition signs which would lead one to believe that he had not pulled up the ‘Yes on V/W’ signs. This creates a cloud of moral turpitude.
    2. Even if the signs were placed in an area where it was unlawful to do so, the cloud of moral turpitude remains since PLO was, apparenly, only removing the opposition signs.
    3. No one on the city council should engage in any practice which can be percieved as illegal or unethical – particulary when an issues as contentious as this is at stake.
    4. Although PLO is clearly in favor of V and W, he has yet to articulate cogent arguments as to why he is in favor of these measures or why they are necessary. All he has managed to do so far is indulge in the equivalent of stamping his foot and saying, ‘Because they are! Because I say so!’ He has, thus far, failed to address any of the questions or issues raised by BS Monitor and others in any cogent, intellectually meaningful, logically supportable manner.

  9. So, now we know that besides getting a bguaranteed 8% annual rate of return, and besides getting $8.00 in city (read taxpayer) contributions for every $3.00 the employees pay into their pensions, they get a bonus if the investment returns exceed targets, but suffer no penalty when the investment returns don’t meet targets.

    Geez, what “brilliant” mayor(s) and council(s) negotiated this one way street on behalf of the taxpayers?

    Can someone investigate to find out exactly who gave away the store and when?  I’d like to see names so I know who not to vote for when they seek higher office.

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