The first City Council session of the new fiscal year won’t be nearly as significant as expected. The council is planning to defer any action on declaring a fiscal emergency from Aug. 2 to Sept. 20. This is the second time the matter will be deferred.
Mayor Chuck Reed has been pushing for the city to declare an emergency so ballot measures to reform public employee pension plans can be put in front of voters. While no council vote is expected on Aug. 2, the session could still feature:
• Discussion regarding ballot measure polling results and direction on revenue measures.
• Discussion of state budget impacts.
• Update regarding status of discussions on ballot measure language and retirement reform negotiations with the City’s bargaining units.
Also, actions related to land use regulations for medical marijuana collectives will be deferred to Aug. 9.
Click Here to Read the City Council Agenda for August 2, 2011.
“Then later he will throw up his hands and say ” I tried but they just won’t work with me” and declare an impasse.”
telling the media that they spent 4 months trying to negotiate with THOSE unions, when in reality, those four months added up to only 12 hours at the table.
City employees have been beat up for a long time now. The time has come that they will make a stand and fight for what they have earned. You can only kick a dog for so long before it bites…
Or by September Reed will claim the budget got better and he’ll get out of it that way but still claim retirement needs fixing. In any case he needs to be recalled! All it takes is 44,000 signatures to get it on the ballot!
Since any ballot measures will be challenged in court on a variety of fronts, Reed has to at least act under the pretense of “trying to negotiate” with the unions. He has no intention of accepting anything the unions propose, but he has to act like he would. Then later he will throw up his hands and say ” I tried but they just won’t work with me” and declare an impasse. He believes this will strengthen his position when he goes to the voters. Sadly, the sheep will buy his rhetoric, vote for whatever he throws in front of them with no more research than listening to a couple of news sound bites, and then watch the money spending begin. Millions of dollars later, and long after Reed has left, the ballot measures will fail and Reed will simply shrug his shoulders and claim that he fought the good fight. And people will believe him despite nothing coming of it other than more of their tax dollars wasted.
Reed doesn’t have 6 votes or it wouldn’t be delayed. Again.
San Jose is the canary in the coal mine in that our independent pension system brings the systemic problems to a the forefront faster than elsewhere.
But, this is a statewise issue. Pensions went way out of control with the state setting the highest benefit level in the country in 1999 for CHP and Prison Guards (3% at 50) and created a huge pressure for every jurisdiction to follow. By 2005, most every public safety position of the state had received the same enhanced retirement benefit and most other bargaining units pointed to this to enhance their own non-public safety pension benefits.
How were these enhanced benefits paid for? They weren’t. Public officials gave themselves the right to hand out an enhanced benefit without paying as your go (they’d catch up, or the growing workforce could help keep the pension fund solvent like the Social securty ponzi scheme.)
The reality, there’s over 1 trillion in unfunded public sector pensions nationwide. Local and state governments are suddenly realizing that a growing workforce with more workers paying in doesn’t work when revenues are stagnant and down, and that folks are living longer.
Pensions are great, I want one too, but coming after the baby boomers looting of our public sector suggests I will have to work longers and expect much less than I pay for because I’ll be paying for other people’s pensions and not my own.
I suggest a max pension of 50 percent for all public sector workers, with supplemental retirement savings encouraged through a 401k type plan. Its also prudent to plan on a reduced income when you retire and make strategic moves like paying down your mortgage, perhaps even selling a large home and moving into a smaller one, etc.
Even the military has watered down their “do 20 years and get a pension” retirement, and the armed force members who put in 20 years can expect about a 50% retirement these days. You want more, you have to stay in longer.
As far as reforms and changes, it was clear awhile ago that second-tier pensions does too little for the immediate crisis. But that doesn’t mean its not important, in part to help set some new standards and expectations around a more reasonable return for a lifetime of service.
Forcing folks over to a new system also doesn’t seem fair as retirement is supposed to be something planned for over a lifetime (though most people wait until their 40’s or later to really start planning seriously). A compromise would be to give a timetable for leaving, retiring or converting to the new system. Ten years seems fair as it would allow folks time to weigh options, start making savings plans and other adjustments and so forth.
Making it voluntary to opt into a new pension system doesn’t seem like it would work (except as political cover) because there has to be some real economic value to switching. Younger workers often cite take home pay, promotional opportunity, flexible schedules, challenge of the job, pleasure of serving the public and a host of other things ahead of “pension” benefits if you ask them what motivates them. I suggest working on some of the stuff you can offer folks to make it more attractive for some to “opt in” to the new pension system. And not just take home pay, think outside the box, like offering a menu of special perks and benefits to those in the new retirement system (flex time, training money, student loan repayment contracts, etc.)
Pensions greatest value to the city as an organization is in terms of recruitment and retention. So let’s look at how to enhance recruitment and retention outside of the very expensive pension benefit. I bet you can find 10 things that will appeal to high quality applicants that won’t cost what pensions do. Let’s put some of those on the table as enticements before you keep beating up on city employees and driving them out of the workforce.
Blair, thank you! I agree with most, but not all of what you say. I have 10 years with the City, I plan on staying for another 25, retiring at 68 (maybe even 70, who knows). I love my job. But, under the current pension formula (2% @ 30), my benefits stop accruing at 30 years. Where is my motivation for working the remaining 5? I would hope something is put in place to motivate employees to stay longer and even stay with the City, like some of the ideas in the latter half of your statement.
I don’t quite understand the concept of a deferred “emergency”.
Wait, postponed again… hmm what is wrong with this picture.Mayor Reed has known all along that a he can not declare a State of Emergency. This is again another way for him to get what he wants, using scare tatics! He has bullied his way through Union negotations,has lied to the public and is using illegal means to balance the cities budget.He has been scolded by the State Attorney General and many others for his actions. When is enough..enough,, These blogs keep talking about recalling Reed, when is that going yo happen?
When you file the papers!
Old Frank
Blair,
“Pensions are great, I want one too, but coming after the baby boomers looting of our public sector suggests I will have to work longers and expect much less than I pay for because I’ll be paying for other people’s pensions and not my own.”
It is both inaccurate and unfair to accuse ” the baby boomers looting of our public sector ” when only a small number of all government employees ( those $100,000 + public safety and government management employees working 25-30 years are receiving excessively large pensions while lower paid government employees and all non government employee baby boomers and younger taxpayers like you have to pay higher taxes and get fewer services for the few government employees receiving excessive pensions
Most baby boomers are having to work after 65 to pay for higher taxes and because their home equity has declined, savings, 401k, and IRA’s are not sufficient to pay for retirement until 70-75 or more
Blair most of the time you have your facts right but not this time – Most baby boomers and all other taxpayers are paying higher taxes and fees for few excessive government pensions for 25-30 year $100,000 + public safety and senior government managers
Financial Times Article from http://www.ft.com/cms/s/0/799ebd8e-24d2-11df-8be0-00144feab49a.html#ixzz1TCM9aRAb
Ageing baby-boomers lie at heart of current crisis
By Tony Jackson
Published: March 1 2010 02:00 | Last updated: March 1 2010 02:00
This is not the best of times, you might think, to start a career as a fund manager. Everything looks dodgy – bonds, equities, alternative investments, the lot.
The temptation is to see this as a mere run of bad luck: first the banking crisis, then Greece and so forth. Arguably, though, these are not causes but results. Behind them lie deeper problems, one of which is the ageing of the baby-boomers.
This issue was much discussed in the 1990s, but was then overwhelmed by more pressing concerns. It now seems to be creeping back.
The obvious point is that we do our saving in middle age, when we start earning enough to save for retirement. Barclays Capital has a chart showing that for the past half century, the earnings multiple on US equities has faithfully tracked the proportion of the population aged from the mid-thirties to mid-fifties.
That proportion started falling sharply in 2002, round about when the equity market cracked. In Japan, the same phenomenon – and the market collapse – came a decade earlier.
The demographics bear heavily on equities in another sense, which as a baby- boomer I can vouch for. I have a daughter still at school and another entering university. So the main calls on my savings are in the next 3-5 years.
I am therefore not interested in equities. However cheap they might look today, there is no guarantee they will not be twice as cheap when I need to sell them.
This partly accounts, I suspect, for the new-found popularity of corporate bonds with European savers (Americans latched on long ago). The trick is to buy a blue-chip 5-year bond on issue and hold it to maturity. That way you get the exact nominal sum when you need it and no damned volatility.
But ageing hits bonds hard in other ways. More old folks and fewer taxpayers mean more borrowing. So who are the lenders?
The glib answer is the big developing nations. But as BarCap also helpfully points out, China, Brazil and Russia have the same ageing problem we do. That leaves it to India, Africa and the Middle East to pick up the tab, which seems a stretch.
There being no obvious way out of this, it is worth consulting history for clues on what happens next. In particular, if governments cannot sustain their debt burdens they have two basic options – to default or to inflate. So which is it to be?
The case for the former was laid out by two US academics, Carmen Reinhart and Kenneth Rogoff, in their 2008 paper This Time is Different . Over the past two centuries, they say, there have been five distinct periods when a high proportion of countries worldwide have been in default.
One characteristic of these waves is that they have often been preceded by financial crises, which were themselves preceded by periods of high international capital mobility. Spot the resemblance.
If that sounds unlikely – if Greece, say, is viewed as an isolated case – we should note the authors’ insistence that serial waves of default are the historic norm. But they are separated by long periods of calm, in each of which people tend to believe the problem has been overcome.
Alternatively, what about inflation? No doubt policymakers would prefer that option, as witnessed by a recent paper under the auspices of the International Monetary Fund suggesting central banks should raise their inflation targets from 2 per cent to 4 per cent.
But inflation only works if it is unexpected: that is, if governments can persuade lenders to accept interest rates lower than inflation subsequently turns out. That worked in the years after the second world war, and spectacularly in the 1970s. But now, surely, investors are wise to it.
In all this, let us not get too despondent. BarCap argues that while equities are not a terrific prospect, they are not disastrous. Its demographic model suggests that in the US market, two thirds of the necessary de-rating has happened already. So over the decade, returns from equities might still be mildly positive. For US and UK Treasuries, they suggest yields over the decade should double to about 10 per cent. That would be disastrous – but there could be a way round it.
As Morgan Stanley observes, if governments cannot inflate their way out of trouble, the logical alternative is to keep Treasury yields artificially low. And the way to do that is to stuff the banks with them, under cover of regulatory prudence.
So that might help those fledgling fund managers with their problem. Provided, of course, they steer clear of bank shares.
These blogs keep talking about recalling Reed, when is that going yo happen? – NEVER – he is too popular with voters and unions have done a very poor job of presenting their side to voters while whining, making threats, trying to win with scare tactics while defending their excessive pensions that no non union voter has or believes city employees should have
If you want a successful recall – Recall City Manager Figone – not very popular with voters, neighborhoods or city employees and has upset many residents with her poor attitude and comments
Reed and Council will not spend political capital, time, money or stand up to defeat City Manager Figone recall but her freiends at Mercury will defend her and whine about she is not responsible past and current Council and economy not her
Figone makes Darth Vader look like reasonable and nice person
She will retire with her large pensions before recall vote and without her – Reed’s budget and layoff scare tactics and demands will die or be laughed at by voters and everyone
The City Manager is not an elected official. Therefore, she cannot be recalled.
You are correct she is not elected. I’m not sure you are correct that she can’t be recalled. I believe the charter has some mechanism for this but further research is required.
Wrong again johnmichael o’connor: read the City Charter.
SECTION 703. Removal by People.
The City Manager may be removed from office by the People of the City pursuant and subject to the provisions of Section 1604 of this Charter.
SECTION 1604. Removal of City Manager.
The electors of the City do hereby reserve the power to remove from his or her office the person holding the position of City Manager. The provisions of the Elections Code of the State of California governing the recall of holders of elective offices of cities, as they now exist or may hereafter be amended, shall be applicable, insofar as the same are not in conflict with this Charter, to the removal from his or her office of the person holding the position of City Manager, the same as if the position of City Manager were an elective office; provided, however, that:
(a) To initiate proceedings for the exercise of said power, the petition shall be signed by duly qualified electors of the City equal in number to at least the same percentage of the number of persons eligible to vote according to the last report of registration filed by the County Registrar of Voters with the Secretary of State, which is in effect at the time the notice of intent to circulate the petition is published, as is required for recall petitions under the provisions of sub-section (c) of Section 1603 of this Charter.
(b) If a vacancy occurs in the office of City Manager after a removal petition has been filed, no election need be held;
(c) There shall be no nomination of candidates to succeed the incumbent in the event the incumbent is removed from office. If the incumbent is removed from his or her office pursuant to the provisions of this Section, a successor shall be appointed by the Council.
No person who has been removed from the office of City Manager pursuant to the provisions of this Section shall be reappointed thereto within a period of four (4) years from and after date of such removal.
Amended at election June 7, 1994
Look at who was promoted into the Deputy City Manager’s spot. They sure keep it in the circle, don’t they?
Yup, I was wrong on this one, but not “wrong again”.
An unusual provision—recalling a non-elected official.
You should take credit for your knowledge of the charter by posting under your real name.
CalPERS…. Just do it! If it’s such a burden then the mayor should be thrilled to get this monkey off his back. Oh wait the city uses this hefty little pot of gold to increase their spending power and bond ratings. It would be comical if they could make the jump…..
You can’t vote on it if it doesn’t exist! No Brainer Chucky, beside anyone who has ever sat in a city council meeting knows the votes are all taken behind closed doors even before any formal vote or wasted public discussion.
You don’t have the votes Chucky and everyone knows it.
JMOC,
” The City Manager is not an elected official. Therefore, she cannot be recalled. “
Please read San Jose City Charter – Voters can recall City Manager – http://www.sanjoseca.gov/clerk/charter.asp
SECTION 703. Removal by People.
The City Manager may be removed from office by the People of the City pursuant and subject to the provisions of Section 1604 of this Charter.
SECTION 1604. Removal of City Manager.
The electors of the City do hereby reserve the power to remove from his or her office the person holding the position of City Manager. The provisions of the Elections Code of the State of California governing the recall of holders of elective offices of cities, as they now exist or may hereafter be amended, shall be applicable, insofar as the same are not in conflict with this Charter, to the removal from his or her office of the person holding the position of City Manager, the same as if the position of City Manager were an elective office; provided, however, that:
(a) To initiate proceedings for the exercise of said power, the petition shall be signed by duly qualified electors of the City equal in number to at least the same percentage of the number of persons eligible to vote according to the last report of registration filed by the County Registrar of Voters with the Secretary of State, which is in effect at the time the notice of intent to circulate the petition is published, as is required for recall petitions under the provisions of sub-section (c) of Section 1603 of this Charter.
(b) If a vacancy occurs in the office of City Manager after a removal petition has been filed, no election need be held;
(c) There shall be no nomination of candidates to succeed the incumbent in the event the incumbent is removed from office. If the incumbent is removed from his or her office pursuant to the provisions of this Section, a successor shall be appointed by the Council.
No person who has been removed from the office of City Manager pursuant to the provisions of this Section shall be reappointed thereto within a period of four (4) years from and after date of such removal.
Amended at election June 7, 1994
Yup, see my response above.
John Michael –
No you are mistaken, Please read San Jose City Charter ( City Manager (Section 1603) and Mayor / Council (1604 ) voter recalls
http://www.sanjoseca.gov/clerk/charter.asp
SECTION 1604. Removal of City Manager.
The electors of the City do hereby reserve the power to remove from his or her office the person holding the position of City Manager. The provisions of the Elections Code of the State of California governing the recall of holders of elective offices of cities, as they now exist or may hereafter be amended, shall be applicable, insofar as the same are not in conflict with this Charter, to the removal from his or her office of the person holding the position of City Manager, the same as if the position of City Manager were an elective office; provided, however, that:
(a) To initiate proceedings for the exercise of said power, the petition shall be signed by duly qualified electors of the City equal in number to at least the same percentage of the number of persons eligible to vote according to the last report of registration filed by the County Registrar of Voters with the Secretary of State, which is in effect at the time the notice of intent to circulate the petition is published, as is required for recall petitions under the provisions of sub-section (c) of Section 1603 of this Charter.
(b) If a vacancy occurs in the office of City Manager after a removal petition has been filed, no election need be held;
(c) There shall be no nomination of candidates to succeed the incumbent in the event the incumbent is removed from office. If the incumbent is removed from his or her office pursuant to the provisions of this Section, a successor shall be appointed by the Council.
No person who has been removed from the office of City Manager pursuant to the provisions of this Section shall be reappointed thereto within a period of four (4) years from and after date of such removal.
Amended at election June 7, 1994
I guess I ought to read the city charter some time when I can’t get to sleep. I’m getting pummeled from all sides on this one.
How many votes does Reed have for Fiscal Emergency Vote? – Not Enough Votes
4 For ( Chamber hardcore ) – Reed, Liccardo, Constant, Nguyen,
5 – Undecided but will vote No – – Chu, Herrera. Oliverio, Pyle, Rocha
because concerns
a) Fiscal Emergency is illegal,
b) will cost millions court costs and settlements,
c) thinks city and labor unions should work out solution
d) worried vote will affect their reelection
2 Against ( Labor Union hardcore ) – Kalra, Campos,
What are Comments or Different vote count?
Liccardo will never vote for fiscal emergency. Simply because he knows that not only is it factually not true (and when the truth comes out he would look foolish to support what he knew was a very bad idea), but he knows it will damage the city’s ability to attract new businesses. He is still sore the city blew the Tesla deal.
Liccardo sees himself as the next mayor. He knows too well that if he is elected he will still be in office when the tide of Reed’s mistakes comes rolling in. You can already see him slowly distancing himself from Reed on many issues. Reed has just about outlived his political usefullness. He has already swung too far to the extremes. The wise politicians who want to be mayor are slowly inching away. The only fool still allowing Reed to think for her is that Madison Nguyen knucklehead. Her own community has already disavowed her existence.
She hitched her horse to the wrong wagon. Reed is barely relevant anymore. Termed out with nowhere to go. Next years council elections looming, then right after that the mayoral race starts. Reed has about 12 months give or take. He’s become the old guy in the rocker who ‘used to be somebody.’ his extremist positions will marginalized him quicker than the fact that he’s over the hill is already doing.
Liccardo co-authored the May 13 memo calling for a vote on a declaration of a fiscal emergency, why would you say he now would vote against his own recommendation?
Is it because of what you say in your post or simply put, he is a flip-flopper that can not be trusted?
Sam is educated and shrewd. Like any successful politician he has the ability to switch positions deftly once the situation dictates the need. Remember, he too is an attorney by trade ( as is Reed). Anybody else see history trying to repeat itself?
The Who were dead wrong when they exclaimed, “We won’t be fooled again! No no. “
Seems we may already be sliding that way. I hope the rest of my neighbors demand of the next mayoral candidates some answers of substance. But more than that, I hope we all use the wisdom of hard lessons learned. We fell for Reed’s BS when his past record on issues were already 12 years made. We fell for his ‘sunshine’ and honesty lines yet there has been neither.
When Liccardo, Nguyen and whoever else runs, let’s look at past behaviors because they are The only predictors of future actions. See Councilman Reeds career. I rest my case.
This ad in the 2004 presidential race is a precursor to the campaign against Liccardo when he runs for Mayor…
http://www.youtube.com/watch?v=pbdzMLk9wHQ
He is a flip-flopper who does nothing but protect his buddy Mcenery and Wolf. Found plenty of money for these two but could not find money for cops and libraries. Look at the vacancies downtown, Santa Clara Street and 1st/2nd Street are a wasteland re-taken over by drug dealers on Liccardo and Reed’s watch, that is a fact. He ought to spend some time fixing that problem instead of riding his bike with Guardino or chasing his tail on other issues. “Whichever way the wind blows”
Liccardo for Mayor 2014!
“Liccardo sees himself as the next mayor. He knows too well that if he is elected he will still be in office when the tide of Reed’s mistakes comes rolling in.” That didn’t stop Chuck, who surely knew what havoc the Gonzales-Chavez team had wrought.But you have Chuck all wrong. Can you imagine the bigger mess we’d be in now if Chavez had won? The npensions would be even higher.
Chuck inherited far more shit from Gonzo than Obama did from Dubya, but Chuck hasn’t finger pointed like Barack Hussein has done. He’s taken a horrible situation head on, pissed off a lot of folks, but got us going in the right direction, and has been on the side of those who pay the bills—the taxpayers. That’s a tack that pisses off the unionistas, who got used to having it their way, but are now whining and sniveling since the tide has turned. Get over it. There’s a new reality out there caused by the massive deficits brought on by union greed and overreaching.
Chuck Reed is like that grandpa who has dementia but is still driving every day. The problem though is Reed is driving a huge school bus and we are the passengers…
Does anyone know if the City’s actual 2010-2011 numbers have been tallied yet? Other cities, like Walnut Creek, have found that their revenue far exceeded their expectations and so the crisis is not as deep as expected. Just curious if this is the same trend for San Jose, which obviously would dictate against declaring an “emergency.”
The City spent $40-50,000 to poll 1200 citizens regarding, in part, whether the citizens would prefer the City: 1) reduce benefits and compensation; 2)reduce services or 3)raise taxes. Of course the questions were developed by the City with the assistance of business organizations and without input from labor of course.
What a waste of money. Hope you listened to the good mayor today on a sports radio channel how every thing is in place to bring the A’s to San Jose. Really, did he not mention it will need to go to a vote. AND he sounded like he could care less about the budget.
“IT WIL BRING 3 MILLION A YEAR TO SAN JOSE!!!”
Get your head out of your our behind mayor, we don’t want it and cannot afford
it, How about returning basic services to us. Parks, libraries, quality of life issues? We need to defend ourselves since you have eliminated over 170 police officer positions in just the last year.
God help us all!
Where did he get his $3M/year? The Cato Institute analyzed decades of the impact of various ballparks on local economies and found that ballparks are actually a drain on economies and do produce any net revenue. In light of that, 3M seems high and is likely the gross benefit he paid someone to come up with.
Why not move Police and Fire to CAL-Pers? The City contributes only 15% and no more unfunded liability? Seems to me everyonewants out from the City and it’s a win win for all?
The city is still responsible for all payments and liabilities. CalPERS simply manages the money and administers the fund just like the SJ retirement funds do now.
If the city was wise enough to join Calpers, they would transfer the entire retirement program over to Calpers. Calpers would then set the contribution rates (much lower than SJ), manage the retirement fund, disperse payments, set the rate of return, etc.
The City would not be responsible for all payments and liabilities, the State would. The city would be responsible for paying into the fund a contribution amount based upon a percentage of payroll that is and would be much lower than what it is now AND be able to close the Department of Retirement Services. That would save substantial amounts of on-going money on staff and consultants.
Calpers is the right move!
Just because agencies participate in CalPERS, the city is still responsible for the ultimate retirement obligation. You are correct that the City would eliminate its costs associated with managing the retirement fund but you are simply wrong about the ultimate liability for the retirement benefits.
CalPERS actually rebounded from the financial crisis better than any other pension system I looked at. CalPERS is likely to survive while other pensions fail, so if we want to offer a defined benefit pension, its probably a great way to go…
…but, I’m not sure if there’s precedent for liquidatings and moving a local pension system into CalPERS. I think your going to need some legislation enabling this passed in Sacramento by the Assembly and State Senate and signed by the Governor.
…and CalPERS is not run by stupid folks, so they probably won’t sign off on absorbing unfunded liabilities carte blanche, there’d have to be a fiscally sound plan for how to fund the existing and pending pensions promised already to current and former employees.
…definitely worth putting some real work and political capital into making happen if it proves doable.
…and finally be aware that there has been a special economic benefit to the city in terms of recruitment and retention because folks tend to stay longer with the city of San Jose to max their pension versus other jurisdiction that see more lateral movement from city to city over a career as folks move for promotions or new opportunity amongst public agencies all in the CalPERS system. In SJ, employees have behaved differently which translates into great retention numbers compared to other organizations. That’d be lost in the switch, but when we’re laying folks off only far sighted folks think about stuff like retention and recruitment 10 and 20 years down the road. Worth at least making a footnote in the discussion about pension reform.
With regard to your last point, I don’t think the City (Reed, City Manager, Council) is very concerned right now with recruitment and retention. Employees are usually not collectively demonized and scapegoated when recruitment and retention of employees are high priorities. So I think that moving the retirement programs over to CalPERS will not affect recruitment and retention. (The job market might, but not this.) Plus, doing so will remove the stupidity and politics that have found their way into City of San Jose management of employee pension plans over the years. Wouldn’t a “fiscal emergency” be a good time for the move to the more stable CalPERS?
Cuncil will never move retirement plans to CalPers since
1) requires city pay CalPers hundreds millions in unfunded retirement liabilities which city does not have
2) More importantly removes Council politics and political contributions from city labor unions
3) City is in retirement mess because:
– Council gave employees tax money city did not have which is dumb but Council does dumb spending all the time – which is why we have 10 years budget deficits and San Jose politicians have been known for “Pay to Play politics for years
– Taxpayers should Blame City Managers and senior staff who had a legal obligation to tell public and Council retirements were not sustainable when recommended approval an d used inflated revenue projections and no downside forecasts because they would also receive very high city pensions paid by taxpayers
City Managers and senior staff had – Conflict of Interest and behaved unethically
The big changes came from a strong union bought Mayor who gave away the store, not the City Manager. That mayor lost his union support and power with a few misteps toawards the end of tenure, but the damage was done, 24% raises over three years for police and fire. The very costly Fire retirement schedule, 3% at 20 years was given by an arbitrator. I believe the City Managers acted responsibly and did inform the Council of the issues, but in the end they work for the City Council who makes the final decisions, except for those imposed by arbitrators. Thank God for measure V.
It is 3 at 50 and by the way when the retirment benefits were put in place employees took that in lieu of a raise. Moreover, the arbitrators had nothing to do with this. The arbitrator had to choose between the most reasonable proposal—city or union—on each issue. The arbitrator had no ability to make a new proposal. Because the unions prevailed on some of the issues reflects how unreasonable the city was being if the unions had the more reasoned and reasonable position. Measure V does not assist as you think. Maybe do some research next time before espousing erroneous information
I did check, Fire received 3% at 20 years in 2007, (it is in the arbitration ruling on the City web page) something you will not find anywhere else, and much more costly than 3% at 50 or the current police plan. Measure V will assist in keeping arbitrators from giving unfunded liabilities as was the case with the 3% at 20 years. This is one of the reasons the Police and Fire fund is out of wack. There are many others. As for arbitrators, it is not as simple as looking at reasonable or unreasoanble proposals, if they want to work again they need to split the baby, no matter how unreasonable either side may be. In this case, the union proposed an unreasonalbe retirement benefit and it was awarded while the reasonable proposals from the City were also awarded. You can read all the decisions on the web page and decide for yourself. Measure V does limit arbitrators from awarding unfunded laibilities as was this case. I hope you will do your research.
Ok, by that logic, CalPERS gives 3% at 1 year!
The fact is, fire receives 2.5% until year 20, then it all converts to 3%. They are then in the same boat as other 3% at 50 systems like CalPERS public safety plans. The City pushed for this backloading to save costs.
By comparison, CalPERS public safety plans are a flat 3% per year starting from year one.
It is called “3% at 50” because you earn 3% per year to the full qualifying age of 50. The backloading of San Jose’s plan saves money versus a straight plan.
You said this is “much more costly”. It is not, because anyone who leaves with less than 20 years will get a smaller benefit. After 20 years, then plan has the same costs and are essentially identical on that factor. In fact, CalPERS has many added benefits that can cost more.
I realize there are a lot of facts to research and I personally appreciate your efforts. But your findings in this matter are completely incorrect.
At 20 years of service, the retirement payout goes from 50% (2.5% a year) to 60% (converts to 3% a year), an immediate 10% spike and every year after that is at 3%. 3% at 50 only goes to 3% when you turn 50 years old which is usually more than 20 years on the job. That 10% spike at the 20 year mark usually kicks in sooner than the 3% at 50, is more costly and encourages earlier retirements, another burden to the system with a 3% COLA. The City did not push for this model, the wanted 4% a year for the last 10 years (which is what PD has and is less coslty than 3% at 50), spreading the spike over time and encouraging employees to stay longer which is less costly than 3% at 50. In fact that is what the City proposed to the arbitrator, but the more coslty version, 3% at 20 years put forward by the union was awarded. You will not find 3% at 20 years anywhere else because it is more costly than 3% at 50. Both are unsustainable.
Did you even read what you wrote?
“3% at 50 only goes to 3% when you turn 50”. Uh, no.
Actually, 3% at 50 is 3% from the minute you vest… at 10 years. You can quit with 10 years and start collecting a 30% pension when you eventually turn 50. The San Jose plan would only pay 25% when you eventually turned 50. Cheaper. Period.
Much less, cops and firefighters pay in like they get 3% per year from day one. After laying hundreds of them off, who came out ahead.
I guess what would be REALLY expensive, by your logic, is a plan that converts from 2.5% per year to 3% per year when you hit 10 years. My God, that would cost a fortune more than someone who gets 3% per year, every year, from day one. Or what about a plan that pays 3% per year from day one, that would cost billions more than a plan that pays 3% from day one. Oh wait, hmmm…
I’m done here. There are only a few people who read this site … 90% are city employees hoping someone is listening to their case, and 10% are political extremists set in they minds trying to convince people who aren’t reading these posts. The real discussion is happening elsewhere.
Measure V is illegal. Binding arbitration cannot have stipulations. One day soon, it will be found illegal. Why do you think they put that poison pill at the end.
The council giving their own selves a 20% raise in 2007???
CalPers contributors can take their retirement to other CalPers agencies if they choose. This is a huge benefit that SJPD and SJFD does not enjoy. Not being locked into staying in a city that does not value its public safety employees would be fantastic for those that want to stay in the profession but go to a place that appreciates them and who pays more, or who has better benefits. Of course those that already want one year shift changes and officers who “are invested in the community” would lose out. Public safety employees could hopscotch across the organizational landscape just like private sector people do with their 401K programs. Loyalty to a city or county would become non-existent and public safety employees can just chase the dollars like the private sector. I like it.
Of course we could go the other way and just have a 401K like the private sector. The major down side to that is that public entities would then compete for the same applicant pool and given the tradition of generally lagging behind in overall pay, the cities and counties would be filled with the ranks of table scraps and those rejected by the private sector. Right now it may appear that public sector employees are doing better off than the private sector. Studies have shown that currently it is about even but when the private sector booms again, history has proven that the public employees will be left far behind. But, if they convert to a 401K system, they can just flee the city or county and go work in the private sector taking their 401K with them. I like that too.
Public safety in SJ have full reciprocity with PERS. If you go to a PERS agency the systems tie in together. I know. I have it in writing. I came from PERS to SJ. I can bail and not lose one inch. And by the way, PERS 3%at50 blows away the SJ retirement system. so I am already in process to take my decade with SJ and go back to my last city employer which pays more too. You guys are gonna end up getting what you pay for. LAPD quality cops. Think about that. Rodney King, Rampart….may day 2007. All of those and countless more due to two factors: hiring poor candidates (because their pay n retirement is a joke) and poor supervision because the unappreciated employees are cynical so they don’t care.
You can’t leave soon enough, along with your negative attitude. You should have been a firefighter, 3% at 20 years (more costly than 3% at 50) if your greed is that big. Good luck on where you go when they cut back on their retirement plans, you can cry then too. 90% is unsustainable. I hope the bargainning groups come forward with some real change, I would rather not see the ballot measure go forward but if it does it has my support.
The full reciprocity with CalPERS is in place and used, but what I’ve observed is that the “sweet spot” for SJ employees is to work a full career in SJ to retirement and then start a new job post retirement at a calPERs agency where they can work and draw a paycheck while concurrently receiving the SJ pension. On top of that, I think they can vest in a second pension with calPERs after 5 years.
A good example would be a lot of the neighboring jurisdictions that have police chiefs and other senior staff who are retired from SJ.
I think the pension system works like an “earned entitlement” but the entitlement mentality is definitely present. I believe in social security and other efforts to see that older americans live with some dignity and don’t have to work until they die. But I think post baby boomers, retirement will have changed for most and we will be expected to work or provide for ourselves. Ce la vie. The only constant in life is change.
I find it ironic that the mayor who ran on a platform of transparency would resort to hiding documents that may not be favorable to his position, or to at least making them difficult to obtain.
On July 12 the POA sent a letter to the city requesting that, per the Public Records Act, they be provided with all documentation that the city provided to Moody’s, to Fitch, and to Standard and Poor’s wherein they document their financial condition. The city has posted this letter on their labor relations website.
The city has also posted their response letter to the POA wherein they state that they have provided them with the requested documents to the same website.
The city posted both letters to the web. However, rather than being transparent and posting the documents provided, the city posted to their website that the documents are “available upon request”. Tranlation – if you or I want to see them we’ll have to go to extra lengths to do so. Somehow I’m sure that staffing reductions or some other excuse will only prolong the process.
See for yourself. The links are at the bottom of the page under the “information requests” header.
http://www.sanjoseca.gov/employeeRelations/labor.asp
Police and Fire union have been pigs at the trough during their last few contracts. Anyone with any sense knew that 3% @ 50 was a budget buster but the public safety guys pushed arbitration to the limit and San Jose over the brink.
The dummies forgot that you don’t kill the golden goose if you want to continue getting it’s eggs. Too bad the rest of the employees are going to pay for their greed.