Town Square

Post a New Topic

The Pleasanton's Pension Situation for Dummies

Original post made by Shoot_The_Messengers on Dec 9, 2010

I've been reading the PleasantonWeekly.com posts regarding the Pleasanton entitlement situation so I decided to research the problem more. Below is my assessment of the situation and my recommendation. Please do your own research and form your own conclusions....

In 1999, the stock market was booming, the California economy was booming and the pension funds managed by the California Public Employees Retirement System (CalPERS) were experiencing pension surpluses. So, in the last day of the 1999 CA legislative session SB400 was passed and Governor Gray Davis soon signed it into law. The effect of this bill was that it significantly increased the pension benefits to state workers. Most state workers could now retire at age 55 and receive 2.7% of their highest 1 year salary for every year work. (Previously they couldn't retire until age 60 at 2% per year at the average of their highest 3 year avg salary). Police and fire received an even more generous deal. They could now retire using a formula that ranged from 2.5% at age 55 to 3% at age 50. And all of these cost increases were to be covered by the "rosy" outlook of the CalPERS pension system continuing to perform at high levels. However, there was a dark side to this bill that no one talked about...IF CalPERS did not perform on managing the pension investments ran out of funds, the taxpayers would have to make up the shortfall.

This is exactly where we are today. As we all know, after 2000 the stock market plummeted, likewise investments by CalPERS sank and were no longer able to cover entitlement obligations. California tax payers have since been left holding the back to pay for this shortfall. Estimates are that California has around $500 Billion in unfunded pension promises to state works! CalPERS failed to perform, so California tax payers will now have to make up the difference.

Now the plot thickens. In addition to California tax payers having to make up the shortfall of benefits coming out of the CalPERS system, CalPERS has had to increase the contributions for working employees into the system. Currently, an example public employee contract may state that the employee is to contribute 7-9% of their salary into the CalPERS pension fund while the employee (the government) will contribute around 20% of their salary. These numbers keep going up as CalPERS fails to perform on meeting their benefit obligations.

Here's where Pleasanton enters the picture. In 2002 the city contracts with its employees were modified to reflect the generous benefit terms provided under SB400. Additionally, the city agreed to pay 100% of the "employee" portion of the CalPERS contribution. Over time, as the required CalPERS contributions have increased, the city's costs have likewise increased. One citizen has performed the research and discovered these costs to the tax payers of Pleasanton have increased from around 1% of the city's general fund budget in 2002 to approximately 18-20% in 2010. (see article here) That represents an 1800-2100% increase in cost and is obviously unsustainable!

Mayor Hosterman and the city council have acknowledge there is a problem here and claim they are taking steps to address this ticking financial timebomb. They claim to be setting up a citizens working group for the Spring time to look into the issue. However, the General Employee contract with city workers is being negotiated RIGHT NOW. The details of that contract negotiation will be made public on Dec 31st with the city council to vote to adopt later in January.

All concerned Pleasanton citizens need to urging the mayor and city council to be taking aggressive action now during this contract negotiation to ensure the outcome is fair to both employee and tax payer. They also need encouragement to be open with Pleasanton citizens on this issue NOW as to the true fiscal situation with entitlements in Pleasanton. Our elected officials have seen this problem growing over the years and have not had the courage to address the situation in a manner that is fair to both the tax payers and the unions. While we respect and value our city workers, they have enjoyed these "boom times" benefits for quite a while, and it is time for them to share in the sacrifices the rest of us have had to make in this challenging economy. It is the only solution that is fair for both sides.

Here's what you can do:
- Contact Mayor Hosterman (citycouncil@ci.pleasanton.ca.us) and the city council and let them know you are concerned and alarmed over the situation and urge them to stand up for Pleasanton's tax payers during the current contract negotiations. Urge them to be open and transparent on Pleasanton's fiscal situation regarding entitlements. Contact them at: citycouncil@ci.pleasanton.ca.us
- Contact your friends in Pleasanton and educate them on the situation and urge them to speak up.

The more the mayor and the council hear from citizens, the more courage they will find to do what is right for Pleasanton.

We citizens can't ignore the fiscal management of Pleasanton, or we may end up like Vallejo and the state of California in general. This is our community and we must speak up...or suffer the consequence!

It is your duty to contact those who represent you to voice your concern at: citycouncil@ci.pleasanton.ca.us

Comments (167)

Posted by Shoot_The_Messengers, a resident of Del Prado
on Dec 9, 2010 at 12:23 pm

Shoot_The_Messengers is a registered user.

Oops, the link to another PW article on this issue didn't show up above. Here it is: Web Link

Cheers!


Posted by William Fazakerly, a resident of Amador Valley High School
on Dec 9, 2010 at 12:38 pm

Many of us will not be able to retire - ever. Those of us who do not work for the government are on our own. Why should we be liable to pay the salaries of people who retire at 55? These entitlement contracts were foolish in 1990, and they are foolish today. The government is breaking its promise to me to return the payments that I made into Social Security, and I am now watching my Medicare benefits shrink after paying into that system for decades. Tell me again why I should be responsible for the foolish promises made by the Government to ex-Government employees? They can get a job - I have to work, so should they.
Bill


Posted by Marto, a resident of Another Pleasanton neighborhood
on Dec 9, 2010 at 1:36 pm

I agree with Bill. Government workers feel its our obligation to keep their benefits high while we sludge through the private sector without any sort of government subsidies. This is true with governments across the board. Margaret Thatcher once said that the problem with socialism (and socialist systems like government employees and benefits) is that you can't live off other people's money forever. Time to wake up and smell the roses. We have to work - you have to work. We pay through the nose - you at least pay for your keep.


Posted by Bart Hughes, a resident of Foothill High School
on Dec 9, 2010 at 1:39 pm

Shoot The Messengers - Thanks for joining the cause for creating a more equitable distribution of the cost of this pension mistake.

It is great you have done your own investigation of the facts to form you opinion. I urge everyone to do the same. I will continue to try to inform the public of the facts to the best I can.

We need to shed light on the upcoming contract renewal in January. Let's hold the Mayor/Council accountable to their commitment to us to be fiscally prudent and address this issue.


Posted by sourgrapefighter, a resident of Birdland
on Dec 9, 2010 at 1:52 pm

You hipocrites are just jealous because you are unable to get good deals for yourselves. If my union is able to negotiate a great deal for me, then more power to them. That's the way it works. Why should I leave money on the table when it is just sitting there being offered?


Posted by Me Too, a resident of Another Pleasanton neighborhood
on Dec 9, 2010 at 2:04 pm

"sludge through the private sector without any sort of government subsidies."

You might want to be careful about that statement. The government give outs hundred of billions of dollars to private companies in subsidies and that's just the federal government. It would be very hard to find a job in this country that does not at least indirectly take a benefit from government subsidies.

I'm not saying anything about the pensions, just saying the subsidies are everywhere.


Posted by Mike, a resident of Highland Oaks
on Dec 9, 2010 at 3:28 pm

If you can afford it, drive on.
If you can't, hit the brakes.

It's not as complicated as some people want you to think it is.


Posted by Pleasanton Parent, a resident of Pleasanton Meadows
on Dec 9, 2010 at 4:03 pm

sourgrapefighter,

Fair enough, get while the getting is good. As a taxpayer and voter don't get mad when I vote down every single parcel tax increase or piece of legislation asking for me to pay more without significant fiscally responsible changes to State Employee comnpensation. Or when I change my purchasing habits to favor less costly goods provided by low cost regions because you're not willing to contribute anything to your retirement. And finally, when I decide to retire and leave Ca taking my taxable income with me to a more tax friendly state.

You don't want to be part of the solution, fine, neither do I - the difference is I'm the one paying.


Posted by Jerry, a resident of Apperson Ridge
on Dec 9, 2010 at 4:19 pm

Public employees serve us well throughout the years so the least we can do is to offer them their well-earned and comfortable early retirement. The job you do in the private sector is not public service so please don't try and compare it with jobs in the public sector.


Posted by Rick, a resident of Vineyard Avenue
on Dec 9, 2010 at 4:34 pm

A recent analysis determined that PERS would need an annual return of 18% to cover the costs of its pension obligations. Since it won't even come close, we are on the hook.

Also, In the event a city goes bankrupt (Vallejo), guess who is first in line to get payed. Pension recipeints are first BEFORE bondholders of city debt. Pensoners would be paid befoe city services are provided as well. Un friggin beleivable.

Hosterman and that board are way behind the curve.
If you listen to them though, they sound like they are on it.
"We are in much better shape than other cities" one of them said.
That's like saying first class passengers of the Titanic have nothing to fear. Why do they insist on comparing Pleasanton with cities that are financially teetering on bankruptcy?

Bart Hughes for MAYOR


Posted by Concerned, a resident of Another Pleasanton neighborhood
on Dec 9, 2010 at 5:37 pm

Thanks to Shoot_The_Messenger for an excellent Email. I was sick for the past few days and am Emailing all the City councilmen. I assume everyone sees the action Governor-elect Brown is taking. Maybe it takes one from the enemy camp to tame the enemy like Nixon opening up to the Chinese.


Posted by Seriously?, a resident of Canyon Oaks
on Dec 9, 2010 at 5:41 pm

Its impossible for any entity to remain solvent when a significant percentage of our budget is going to pay for people that are not doing the job anymore. Pension obligations took GM into bankruptcy - and look how fast they rebounded once the ridiculous pension obligations were wiped out.

I suspect that we will be reducing the number of policeman, firefighters, teachers, etc that provide service TODAY so that we can pay for those that did the job for us 5, 10, 15 years ago.

The only way out of this is to public servants a fair wage, hire/fire like a real business would and contribute to their 401k's.


Posted by council will not answer, a resident of Downtown
on Dec 9, 2010 at 5:43 pm

I wrote to every council member and asked for the courtesy of a reply. I stated my concerns and gave them my name. With the exception of one council member, Ms. Cook-Kallio, not one of them even responded. This sort of arrogance is the reason that so many of us are going to have to take action ourselves on this matter.
A simple reply that they had received my email and would consider it would have satisfied me. Now, bring on the initiatives.


Posted by Bart Hughes, a resident of Foothill High School
on Dec 9, 2010 at 6:23 pm

Jerry - City employees deserve pensions but not ones that put city finances under significant stress and forces the city to cut back on services. We did just fine pre-2002 before this entitlement explosion. Keep in mind that every $50K increment of final year salary of a 55 year old retiree represents approximately $1.3M in retirement benefits (and not even including medical). It is clear that we can no longer afford this, so it is time to scale back or at a minimum start getting the employees to contribute.


Posted by two cents, a resident of Another Pleasanton neighborhood
on Dec 9, 2010 at 7:17 pm

Thank you for this summary, it's useful to have the big picture. I will be writing to the council.

I also will not vote for any tax increases until we've sorted this all out. I'm surprised news articles, politicians say they can't possibly think of what to cut when we're paying out pensions without employee contributions, accepting ridiculously low retirement ages and paying a lot more than other states for the labor for the services we get. Why aren't people shouting from the rooftops that this needs to be fixed before people are going to trust the government enough to vote for any taxes.


Posted by Minimum wage taxpayer, a resident of Another Pleasanton neighborhood
on Dec 9, 2010 at 9:22 pm

I agree - Bart Hughes for MAYOR. If you had run this year I'd have voted for you.

Thank you Shoot the Messager for supporting Bart and adding some history to the making of this fiasco.

Not only will I be writing the City Council - I will be writing my State Legislature's as well.

Maybe we should start a non-public employee march on Sacramento and scream from the rooftops.


Posted by Bill, a resident of Amberwood/Wood Meadows
on Dec 9, 2010 at 9:58 pm

Recent estimates put the number of people who directly depend on the government for wages at 58%. By 2018 this percentage is expected to rise to 67%. I don't think you have to be a math genius to realize this country is in big trouble with or without pensions.


Posted by Repulsed, a resident of Another Pleasanton neighborhood
on Dec 9, 2010 at 10:21 pm

I'm so repulsed by the arrogance and sense of entitlement, by those who think retiring at 55 on a retirement paid for by individuals who cannot afford to fund their own retirements, and also deprive neighbors of public services....knowing you are the cause.


Posted by Repulsed, a resident of Another Pleasanton neighborhood
on Dec 9, 2010 at 10:33 pm

Bill,you're right. Two months ago, the NUMBER of government workers surpassed private workers, nationwide.
Scary, when you think of all the welfare receipents, who take rather than provide, and all the government workers & their retirements, think how hopeless it is for all us suckers in the private sector.
The part that truly angers me about many welfare and illegals is they want to study law to make things ""more equitable" with more 'taking", and all the fields like 'social work', rather than learn a 'skill' and....none of which creates anything that can contribute to the GNP to keep our country "solvent".


Posted by observation, a resident of Another Pleasanton neighborhood
on Dec 10, 2010 at 8:28 am

"Bill,you're right. Two months ago, the NUMBER of government workers surpassed private workers, nationwide."

That is complete baloney. There is no truth to that as all. Where on earth did you hear this? It is about 20% government, 80% private. You don't have to say things that aren't true to say that current state and local pensions are unsustainable.


Posted by stevep, a resident of Parkside
on Dec 10, 2010 at 8:57 am

The solution to the pension issue is already in the works, by way of the fact that the folks that got us in this mess (the Dems in the stat govt) were re-elected by the uneducated masses on the dole.
In just a matter of time before the state files for bankruptcy, voiding all the union contracts and unrealistic, unfunded pension handouts. The sooner the better, since no one has the will to make the necessary changes in the meantime.


Posted by Hmmmm, a resident of Pleasanton Heights
on Dec 10, 2010 at 9:03 am

I have a couple of questions:

- if it is accepted that you need 70-75% of your employment income to maintain your standard of living in retirement should pensions pay 90%?

- Should pensions pay more then what is required for retirement beginning at age 50, or 55? If someone can't be expected to perform as a police officer after age 55 does that mean he can't work in a second career while receiving a pension?

- should the pension be so generous that employees don't need to save a single penny of wages for their own retirement?

- why does management receive pensions at 55?

- were pensions designed to make public sector employees rich at the expense of private sector taxpayers?

- how did this system get so screwed up?

- can we really expect the politicians & management that created this unsustainable problem, or sat around watching it explode, to solve the problem? Of course we can expect it - but....


Posted by Pablo, a resident of Downtown
on Dec 10, 2010 at 9:03 am

I agree that the state will file for bankrupcy because the time to have corrected all of this has passed but I do have question. If the state files for bankrupcy and is relieved of all its pension liabilities does that also mean that cities such as Pleasanton are also relieved of it pension liabilities or is it seperate? I would think that if the state files it would force the counties and cities to become insolvent as well. Also my neighbor was and is a retired United Airlines mechanic. When United filed for bankrupcy his retirement was reduced by about 50% when the pension plan was sold to Guarity, would the same thing happen to state pensioners?


Posted by Pablo, a resident of Downtown
on Dec 10, 2010 at 9:05 am

Hmmmmmmmmmm


Gray Davis changed the retirement system to a 3 point system so that he could get the endorsement of the Police, Fire, CDC, and state workers unions when he ran for governor.


Posted by FedUp & Fuming, a resident of Jensen Tract
on Dec 10, 2010 at 9:22 am

I have no problem paying city/county/state/federal workers (and those in dangerous jobs should get a premium) WHEN THEY ARE WORKING. But when they retire, they should get the same level of benefits the rest of us are going to get....whatever we managed to put into our retirement and social security. And that doesn't mean collecting retirement at 50 or 55. They'll get it when they reach "official, government" retirement age like the rest of us.


Posted by Arnold, a resident of Another Pleasanton neighborhood
on Dec 10, 2010 at 9:22 am


Pablo

States can't file bankruptcy. They can only default on their debt. In California, I guess we can also write IOU's to retiree's once Calpers becomes insolvent. But as someone else has pointed out, I think the retirees get paid before the bondholders.


Posted by Pablo, a resident of Downtown
on Dec 10, 2010 at 9:36 am

Sure is a mess, I suspect if we do not have enough money to pay the bondholders we probably do not have enough money to pay the pensioners either. I bet no to many companies would accept an IOU from California for payment.


Posted by Shoot_The_Messengers, a resident of Del Prado
on Dec 10, 2010 at 10:42 am

Shoot_The_Messengers is a registered user.

Here's one persons account of Vallejo's demise.

Web Link

Don't think, "It can't happen to Pleasanton!".

Problems are like cancer. When detected while they are small, it is "easy" to fix, IF action is taken. However, if ignored it grows bigger and much more "difficult" and destructive to solve. If ignored further, it becomes an insurmountable problem that destroys it's host.

Where are we on this "problem" scale in Pleasanton? We'll find out when the current General Employee contract is "revealed" in Dec 31st. Did the Mayor and council "take action" or kick the can on this "difficult" problem down the road?

My understanding is that this issue was known to be a problem soon soon after enacted in 2002 and should have been "easy" to address. We're now in the "difficult" stage (18-20% of the budget on entitlements)...when does "insurmountable" begin? When do we head down the Vallejo path and say "how could this have happened?".

The economy may not get better any time soon. City revenues may decrease significantly, but entitlement obligations will remain. On December 31st, the Mayor/council's moment of truth on how serious they are taking this issue will be revealed.

Mayor Hosterman's pronouncements of establishing a commission to study this issue in the Spring is concerning. Sounds like she doesn't want to "rock the boat" and get the current contract through before the public takes notice. Hopefully, I am severely wrong...I hope so!

Brace for impact citizens....I'm worried!


Posted by Bill, a resident of Amberwood/Wood Meadows
on Dec 10, 2010 at 11:17 am

To Observation -

I should have qualified my statement that 58% of population depend on the government for "wages". This should have been "income". This includes all the private workforce who directly support and recieve income from the govenment. No matter it is still scary and getting scarier.

Just a thought. Items have to be marked with origin of manufacture. Does this mean the new Bay Bridge will have "Made in China" stamped on the central suspension column? Maybe this is a clue as to why the US is losing it.


Posted by Donna, a resident of Another Pleasanton neighborhood
on Dec 10, 2010 at 11:51 am

maybe someone should set up a community picketing in front of the "city hall" building. Maybe we should pick a date and show up to voice our opinions!
how does that get started?


Posted by Bart Hughes, a resident of Foothill High School
on Dec 10, 2010 at 12:08 pm

The time for more vocal/visible protest may come later. But the best thing you can do right now is contact the Mayor/City Council and express your concerns. In particular, let them know you will be watching the terms of the new January employee contract to see if they are serious about pension reform.

Let's not let them "talk the talk" without "walking the walk".

For those interested in getting more involved, please send your contact info to:

ptownreform@gmail.com


Posted by b, a resident of Another Pleasanton neighborhood
on Dec 10, 2010 at 1:13 pm

The City liability is not unlimited. They pay a fixed amount into the fund for every worker, a percentage of their salary. This is like a private employer matching your 401(k) contributions. The main difference is that public agencies pay a higher percentage into retirement, while paying lower salaries than the private sector (you can easily compare the salaries on the City of Pleasanton website with the equivalent private sector salary on Glassdoor).

Some would argue that this is a better model, as it forces employees to build retirement benefits/savings. Instead of contributing to your retirement plan, your employer put the money into your paycheck. And you spent it instead of putting it in your 401(k). Surprise! You didn't save enough to retire at 55.

This is way overblown.


Posted by two cents, a resident of Another Pleasanton neighborhood
on Dec 10, 2010 at 2:05 pm

I've just looked up salaries in Glassdoor. Public sector salaries in many areas don't look lower than private sector to me. Many public sector salaries are over 100k and these are not for top management positions.

I don't think anyone can save enough to retire at 55 unless they are extremely wealthy or in the public sector - that's a long time to pay for.

And anyhow, it's not the point. The point is that we can't afford it. Check out pension tsunami if you think this is way overblown. This is a real problem.

And do you really want the services we have to be taken away just so we can pay for people to retire at 50 or 55? This is a real possibility. Do you think the private sector is going to support this? I don't.


Posted by Arnold, a resident of Another Pleasanton neighborhood
on Dec 10, 2010 at 2:16 pm

b

What you describe as a "fixed percentage" isn't accurate. The amount changes every year and over the next 30 months the percentage of the "employer contribution" will increase by more than 50%. Here is what it will look like for someone in Public Safety:

In 2010, for an employee earning 100K in salary the employer contribution rate is 29%. Pleasanton also pays the "employee contribution rate of 9%, for a total of 38%. Therefore, the salary plus retirement contribution is 138K.

Fast forwarding to July 1, 2013, the probability is the "employer contribution" will increase from that 29% to 43-47%. When you add the 9% "employee contribution" that is paid by the city the total cost for that same 100K of payroll grows to 52-56%. So that means that the city/taxpayer contribution grows from 38K (a large number already) to 52-56 thousand dollars, for someone earning 100K.

Keep in mind that I haven't even increased the salary in this example. I was only demonstrating that the pension cost isn't fixed. The employees contribution, the 9%, is fixed. The employer contribution is a moving target. That's because while the employees receive the generous benefit the taxpayers assume all of the risk. If I were to factor in the increased wages the total compensation/cost would certainly grow much faster.

Here is something most people don't know:

Now assuming this person were to retire the 9% the city pays on behalf of the employee is considered "special compensation" that is added to the salary for the purposes of the pension calculation. In this case the 9% = 9K. So if this hypothetical 100K employee retired after 30 years his pension compensation would be based on 109K per year, multiplied by 90%, or 98,100 dollars in the first year. Keep that in mind when you here people say their 3@50 pension formula pays 90%. It is actually more when the city pays the employee contribution.


Posted by Ugh, a resident of Birdland
on Dec 10, 2010 at 2:31 pm

People can save up enough to retire at 55. If you are frugal, don't spend your money on frivilous items and diligently save a percentage of your paycheck EACH AND EVERY time. It is very possible to retire at 55.

My father retired at 57...not a public employee with what everyone is calling unfounded pension money. From a trucking company. He paid into his retirement through the company 401k...saved with CDs and any other way that he could. He wasn't in risky stuff in the stock market so he didn't lose a ton, but did suffer a loss. Even with that, my parents are enjoying their retirement by taking the trips that they had been planning for.

They raised 3 children...purchased a house that was modest...purchased modest cars and hung onto them for years instead of getting a new one every few years. Ate at home...didn't overindulge the kids every request.

It is possible...it is just that people these days just want to live in the now...have everything now....take the best trips...drive the best cars...have the best gadgets...instead of save their money for later.

I agree that the system needs to be fixed...but I also hear a lot of whiners out there.


Posted by Arnold, a resident of Another Pleasanton neighborhood
on Dec 10, 2010 at 2:32 pm

Two Cents

When you are comparing compensation between employees among different citiesrs, or against private sector compensation, you need to add back the 8 or 9% the city pays for the employees pension contribution. It is a standard practice. For example, a general pleasanton employee making 100K is actually earning the equivalent of 108K. Public sector employees obviously have the additional pension contributions, better healthcare, 13-15 paid holidays, education pay, etc. Looking at the salary schedule on the pleasanton website only tells part of the story. For the rest of the story one needs to look into the employee contact.


Posted by Me Too, a resident of Another Pleasanton neighborhood
on Dec 10, 2010 at 2:45 pm

I wish people would get off the "pensions are evil" statements. Pensions were not created by unions and union member were not the only people to receive pensions.In many companies pensions were offered at all levels as an enticement to stay. And as you know many people stayed at the same companies their entire career. As this model begin to change more as we entered the end of last century, many companies shifted from pension to other retirement benefits such as 401K matching. (local companies such as Clorox had pension plans until around 2000)

So pensions are not evil - management that agrees to unsustainable pension funding is evil. Union leaders who can't see that a contract will be detrimental to a company and in turn, their members future, are evil. (We also have to remember, that a lot of the union stuff comes from the leaders not the members.)

Yes, it appears that the city of Pleasanton entered into some very poor contracts and that needs to be fixed. But blaming somebody for accepting a good contract at a time when it seemed everyone around you was becoming a millionaire overnight is ridiculous. However, those same people have to realize that times have changed and the city (and other public entities) has to make the tough choices.

By the way, how does a company or public entity go about breaking or getting rid of unions? (if there are any good web pages or anything, please post a link)


Posted by b, a resident of Another Pleasanton neighborhood
on Dec 10, 2010 at 3:19 pm

Why do people keep throwing out $100k as some evil number? That's not an outsized salary in the Bay Area.

City of Pleasanton salaries schedules are posted here: Web Link

For positions in which an apples-apples comparison is possible, these salaries are consistently lower than private sector equivalents (based on my own hiring experiences and glassdoor reports).

So if public agencies have such great pay and benefits, why would anyone want to work elsewhere?


Posted by Shoot_The_Messengers, a resident of Del Prado
on Dec 10, 2010 at 3:59 pm

b says "this is way overblown"

Hi b,
So if our alarm at the entitlements growing from 1% of budget in 2002 to 18-20% of budget in 2010 is "overblown", when IS the time to get this alarmed? Should we dampen our concern until entitlements it hit say... 30% of budget?

Were people also saying "this is way overblown" when this problem was "only" at 10% of budget? 15%? 20%? at what level is this NOT overblown? Thanks in advance for clarifying!

And yes "Me Too", I agree "pensions" are not in themselves "evil". The question is what is fair for both employer and employee, and in this case the tax payer who is financing the employer.

Lots of private companies still provide pensions. God bless them for taking care of their employees! Others provide 401Ks sometimes with matching contributions (I wish mine did). But those companies are financing their efforts on the merits of their products and the success/failure of their business. In the government's case, the financing is provided by reaching into our pockets (taxes) and taking. While we can debate the proper "acceptable" levels of taxation, should we not all expect the highest standards of fiscal responsibility and stewardship from those who tax us?

IMO, we have been conditioned by our government to think things are "way overblown" too often and to accept mediocrity and complacency as the new "normal". Is that the "normal" for Pleasanton?

So the debate is what is "fair" for both tax payers and city employees, especially in these challenging economic times.

We will find out how the Mayor and Council view "fair" on Dec31st when they disclose the results of the current contract negotiations.

If you don't speak up you won't be heard! At a minimum, email the Mayor/Council to let them know your concerns: citycouncil@ci.pleasanton.ca.us


Posted by Stu Bailey, a resident of Hart Middle School
on Dec 11, 2010 at 8:58 am

Most of private industry doesn't have a pension system that comes close to what city workers are no recieving. For the city budget line item to balloon by this amount in this timeframe shows poor judgement in hindsight. Fortunatly we have the opportunity now to correct the problem. Lets encourage the City counsil to do it!


Posted by Message Board, a resident of Another Pleasanton neighborhood
on Dec 11, 2010 at 12:03 pm

I always watch the postings on the "MESSAGE BOARD VIEW" rather than the Main View". The Main view is more for new postings, but the MESSAGE BOard is more for the topics peopled are most interested in and that have active comments in progress. Just click on main view and it will swith to message board... I check both.
Somtimes Editor takes the most interesting off Main, so you can find it on 'Message" and it's still quite active....it's more the 'people's board...it has ALL topics, including those removed from Main.


Posted by Lugnut, a resident of Charter Oaks
on Dec 13, 2010 at 9:09 am

What used to be called job benefits are now called "entitlements". When times were good all were prospering. Public sector did not make salaries that Private Sector were raking in. CEO's made/make millions of dollars. Are they really worth such obnoxious salaries?

We choose to pick on the sewer worker, the parks worker, the water guy, the police officer who does what you won't, the firefighter who is more haz mat and medical than firefighting. When your Mom is laying on the floor gasping for air or has been injured in a mugging you all don't care about pensions. I agree pensions need adjusting. But the disdain for public workers apalls me. It is the Managers who have "spiked" the system like the jerk Fire Chief in San Ramon. It isn't the guy or gal who runs the sewer treatment plant, or the office worker who moves mountains of paper---the real working person.

Solution: Form a community task force made of a makeup of the community to educate themselves on what really has caused the pension crisis and then make strong corrective recommendations to the decision makers and hold them accountable to act.


Posted by b, a resident of Another Pleasanton neighborhood
on Dec 13, 2010 at 9:23 am

So a public worker earning $100k would actually cost $138k. That's a reasonable calculation based on the numbers you've provided.

Based on the Pleasanton salary charts I've already posted, that $100k earner would be either a very experienced senior professional, or a lower-level manager.

An equivalent senior professional/manager position in a Bay Area tech-type company would have a base in the $125-150k range, a bonus component, and a 3% employer 401(k) match, costing far more than the City package.

Public jobs have better benefits but lower salaries. People stick with these jobs so they can retire sooner. You HAVE to earn more in a private company, because you're basically on your own with respect to retirement contributions.

That's what I've been saying about an apples-apples comparison the past few weeks. You're taking two different things and trying to make them the same thing.

No harm in trying to negotiate a better deal for the city--that's just good business. But having reviewed the City salaries and having seen your analysis of the total cost, I still don't see that Pleasanton is overpaying relative to other cities or Bay Area professional companies.


Posted by Suzy Q, a resident of Downtown
on Dec 13, 2010 at 11:09 am

regarding Arnold's example of:

Now assuming this person were to retire the 9% the city pays on behalf of the employee is considered "special compensation" that is added to the salary for the purposes of the pension calculation. In this case the 9% = 9K. So if this hypothetical 100K employee retired after 30 years his pension compensation would be based on 109K per year, multiplied by 90%, or 98,100 dollars in the first year.

This does NOT include spiking with overtime, vacation time, raises in the last year - which actually happened with the past city attorney. With these variables, a retiree could make more money retired than he/she did working, after his 30 years are done!

Second, I am told there are a 500 job applications for any opening in the fire department. Now I know why. Why waste your money on college, masters degrees and law school? When you turn 55 and you are not working in this high cost area, then move to where you can buy a house for $300K and live like a king at the taxpayer's expense.


Posted by Rick, a resident of Another Pleasanton neighborhood
on Dec 13, 2010 at 11:31 am

I keep getting removed. Starting to wonder if the Plesanton Weekly isn't in on this with the rotten politicians who gave away the bank and all that's in it. How are they not crooks?


Posted by Concerned Californian, a resident of Valley Trails
on Dec 13, 2010 at 11:31 am

Those dependent on entitlements in California - illegals who utilize more social services than their payroll taxes pay for, those on "da welfare" or free housing/childcare and those who "work" for the gub'mint outnumber those who produce in the private sector economy. Democrats have figured this out and do as much as they can to transfer the wealth and garner the votes. And when you look at the demographic shift, it's producers leaving the state - and those hooked on entitlements entering (or the indiginous entitlees having more children). At this point it's a numbers game - anyone who is a private sector producer is losing.


Posted by Tom Drumm, a resident of another community
on Dec 13, 2010 at 11:33 am

The writer has it wrong, at least regarding many PERS jurisdictions. My experience is that employee groups paid with foregone COLA's to amortize improvements to pensions. The real reason for our current problems is what the writer correctly cites: that employers were forgiven having to make contributions--and were even repaid contributions--due to a false assessment of super-fundedness. That super-fundedness proved to be just as real as the Tech and real estate bubbles.


Posted by Elsworth, a resident of Another Pleasanton neighborhood
on Dec 13, 2010 at 11:37 am

Some of the posts here by union members are despicable. I say fire the whole damn bunch of them and rehire those positions at half the pay. It's time for the firefighters, prison guards and other government employees to get a wake-up call and to put our fiscal house in order. A side benefit would be improving productivity.


Posted by Jim, a resident of Oak Hill
on Dec 13, 2010 at 11:49 am

Quite a discussion here and except for a few Yahoos who can't pass up name calling, a real problem exists of un-sustainability.
History commonly gets forgotten here. A few decades past, "civil service" jobs paid less than the private sector and had quite good benefit packages that are now causing an uproar. When the "high tide" drove our house and 401K values to the stratosphere, this issue never came up. As more middle class jobs are sent over seas and the ones that are left go through a deflation, the private sector has lost the superior wage edge and the once common pension plans, while the public jobs continued along with increased wages ( bringing them in parity or greater).
So, the world has changed, as must the compensation system for public employees. Lets focus on the un-sustainability of the current system without the name calling.


Posted by Hmmmm, a resident of Pleasanton Heights
on Dec 13, 2010 at 12:16 pm

Rick, that happened to me too. I posted some questions regarding an article in "The Independent" about the pension issue, and it has been removed. In the article there are several quotes from both Livermore and Pleasanton officials. The Pleasanton Finance Director states that the pension fund is 75-80 percent funded, which I guess means it is 20-25 underfunded. I'm not sure if the plan is funded at 75, 76, 77, 78, 79, 80%, or maybe even some other number entirely. Regardless, I think anything below 80% is considered unhealthy.

The article is titled, "Cities, Schools Dealing with Pension Costs"

Web Link


Posted by Concerned, a resident of Another Pleasanton neighborhood
on Dec 13, 2010 at 1:03 pm

There is a great article in today's WSJ by the Governor of Minnesota about the silent coup of the Public sector unions over the past decade and how his state is fighting back by taking strikes etc.. I couldn't figure out how to provide a link here as it is a paid web site. Pleasanton falls exactly in that situation. We need to be ready to take strikes and replace striking workers.


Posted by bart_hughes@yahoo.com, a resident of Foothill High School
on Dec 13, 2010 at 5:48 pm

- Pleasanton funding levels have dropped to a precarious levels this past year (MVA valuation):
- Miscellaneous - 52.2%
- Fire - 55.7%
- Police - 60.2%

- Yes the AVA valuation numbers are higher but the only way PERs will achieve these numbers is with above-average market returns. Please note that while PERs has targeted a 7.75% return these past 10 years, they have only achieved approximately 3.3% annual returns. PERs is playing a very dangerous game and assuming spectacular returns with no further significant market downturns over the next 15-30 years. Highly unlikely.

We have an increasingly unsustainable situation in Pleasanton.


Posted by b, a resident of Another Pleasanton neighborhood
on Dec 13, 2010 at 6:13 pm

Ah, there you go citing those 10 year return numbers like a good Tea Partier. I knew that 3.3% number would come out again sooner or later. Conveniently, that statistic runs from the market peak in 2000 to market trough in 2009. Really, not a bad return considering what happened to our country during that timeframe.

Any other 10-year timeframes that you think are worth examining?

Probability of those heavily written-down assets increasing in value in the next few years vs. the probability of more massive write-downs?

Any improvement in the commercial real estate market from here, and those numbers are going to soar.


Posted by Bart Hughes, a resident of Foothill High School
on Dec 13, 2010 at 6:40 pm

Tom Drumm - I urge you to look at the actual employee contracts (they are online). You will see that employees received raises every single year except 2010. Take Miscellaneous employees, their average income increased 41% between 2002 and 2009.

There was absolutely no salary raise sacrifices to fund the increase in pension benefits. Again, look it up online if you don't trust what I am saying here.


Posted by Phil, a resident of Another Pleasanton neighborhood
on Dec 13, 2010 at 6:45 pm

I for one believe that we should be doing what we can to help our public employees when they retire. We ask them to do jobs that they don't have any easy way to transfer to the private in many cases. I've heard stories about retired public employees losing their homes, and having difficulties paying health care bills. That is unbelievable to me. I can't stand it when people say that word "unsustainable". It always does seem to be these Tea Party types saying it. The fact is that if we don't have enough money to provide a retirement for public employees where they don't have to lose their homes, then we need to raise taxes to pay for it. It is as simple as that.


Posted by Bart Hughes, a resident of Foothill High School
on Dec 13, 2010 at 6:47 pm

b - I'll continue to stay focused on the facts and not on calling people names or categorizing them.

I would welcome the opportunity for you to disclose who you are and then have a face-to-face fact based discussion. Then I could explain to you with mathematical facts the impossibly high return rate CALPERS will need to achieve for the next 15-30 years to dig themselves out of the whole they are in. Or do you have a perspective on why 50-60% funding levels aren't disconcerting?

Fortunately, more and more people are waking up out there regarding the unsutainability of current public employee entitlement plans. I will stay focused on solving the Pleasanton issue.


Posted by Bart Hughes, a resident of Foothill High School
on Dec 13, 2010 at 6:51 pm

CalPERs 1999
"NO INCREASE OVER CURRENT EMPLOYER CONTRIBUTIONS IS NEEDED FOR THESE BENEFIT IMPROVEMENTS," says a line written in capital letters describing the impact on taxpayers.


Posted by Bart Hughes, a resident of Foothill High School
on Dec 13, 2010 at 6:52 pm

Gray Davis 2010
Davis said the financial assumptions that led to him signing massive increases in state worker pensions were wrong and should be undone. "The evidence seemed to suggest the state was wealthy enough to afford it," he said. "It was part ideology and part math, and the point is the math was wrong, big-time. "Pension reform is essential. You just can't afford the benefits that have been promised because all the actuarial studies turned out to be wildly optimistic," he said. "We have no choice now, and if I was governor, I would be doing exactly what Arnold is trying to do, which is require people to contribute more to their pensions."


Posted by Bart Hughes, a resident of Foothill High School
on Dec 13, 2010 at 6:52 pm

Willie Brown 2010
"The deal used to be that civil servants were paid less than private-sector workers in exchange for an understanding that they had job security for life. But we politicians, pushed by our friends in labor, gradually expanded pay and benefits to private-sector levels while keeping the job protections and layering on incredibly generous retirement packages that pay ex-workers almost as much as current workers."


Posted by Stacey, a resident of Amberwood/Wood Meadows
on Dec 13, 2010 at 8:01 pm

Stacey is a registered user.

This one is for b. Capitals are my emphasis in the quoted text.

Web Link

"... if earnings during the decade averaged 4.4 percent, a repeat of the decade from 1966 to 1975, the state payment would be $3.954 billion. If earnings averaged 12.1 percent, a repeat of 1947 to 1956, the payment would be zero.

The big swings in the forecast of state costs, from zero in boom times to nearly $4 billion if the economy slowed, SHOWS HOW DEPENDENT PUBLIC PENSIONS HAVE BECOME ON UNPREDICTABLE INVESTMENT EARNINGS.

The transformation of the pension funds began with a little-known ballot measure, Proposition 21 in 1984, that shifted investments away from bonds. A cap limiting stocks to 25 percent of the portfolio was lifted, ALLOWING THE RISKIER PURSUIT OF HIGHER YIELDS.

Another chart in the agenda given the committee in 1999 shows how EMPLOYER-EMPLOYEE CONTRIBUTIONS, NOT INVESTMENTS, ONCE PROVIDED MOST OF THE REVENUE for the giant CalPERS state and local government Public Employees Retirement Fund."

"b" asks which decade should be looked at. Probably a better measurement would be to look at the average over a longer period of time and not pick a decade (CalPERS, since 2005, is doing rate smoothing over 15 years yet the costs are still rising). Picking a decade with 12.1% returns is just as distorted as picking a historic low. Yet this State has increased benefits to public workers by using just such an assumption of higher returns.

Bottom line: The risk has been socialized.


Posted by John, a resident of Another Pleasanton neighborhood
on Dec 13, 2010 at 8:44 pm

So Bart, when does your campaign to end social security begin? That seems very unsustainable to me. What about medicare? Did you not see this coming from the private sector with their unsustainable waste and inefficient practices? The market is up yet jobs are not. Most of these "gone forever" jobs have been replaced by greater productivity -- fewer workers using better technology -- or made obsolete by a new business process. I'm interested to hear what your ideas are for the industries that caused this financial collapse and placed our public servants as the scapegoats for the blame.


Posted by b, a resident of Another Pleasanton neighborhood
on Dec 13, 2010 at 8:51 pm

Bart, I'm not going to disclose my identity here, but would be happy to introduce myself face-to-face. I am exactly who I've said I am--a concerned resident of Pleasanton. I work in the technology industry and have no stake in this, other than a desire to ensure that the Management of our city retains reasonable latitude to make market-responsive personnel decisions, without more ridiculous initiatives binding their hands. I've already cited examples of why I believe this to be important.

I did not "call people names." I merely called out your "facts" as bogus. I stand by my claim--you can fabricate numbers to prove most anything, if you adjust the timeframes.

Stacey, thanks. I was being somewhat tongue-in-cheek. It is pointless to try to pick timeframes--the markets always ebb and flow.

I actually agree with you on many of these points. I'm not a big fan of pensions, and would like to see us move away from them in the public sector. My point all along has merely been that the adjustment needs to be made gradually, not crammed down the throats of city leaders. I've already stated the reasons many times.


Posted by Bart Hughes, a resident of Foothill High School
on Dec 13, 2010 at 9:01 pm

b - then send your contact info to ptownreform@gmail.com and clearly identify yourself as b. I look forward to the face-to-face.

It is interesting to see how you call numbers bogus either because you don't agree with them or the implications. There is absolutely nothing bogus about the Pleasanton's current funding levels and I will send/give you the Pleasanton/CALPERS source documents that confirm then.

It will be interesting then to hear your arguement for status quo.


Posted by Stacey, a resident of Amberwood/Wood Meadows
on Dec 13, 2010 at 9:08 pm

Stacey is a registered user.

b wrote: "I was being somewhat tongue-in-cheek"
That like of talk can tend to get one into some trouble around here. :)


Posted by Stacey, a resident of Amberwood/Wood Meadows
on Dec 13, 2010 at 9:09 pm

Stacey is a registered user.

Eek. Edit: like/kind


Posted by Bart Hughes, a resident of Foothill High School
on Dec 13, 2010 at 9:09 pm

John - Nice try at diversion. I'll continue to stay focused on solving issues I can influence. I certainly don't intend to make public employees scapegoats. It is just too bad that there is such reluctance, push-back, and false reasoning from those who have benefited the most from this pension mistake instead of a degree of reasonableness to solve the obvious problem.


Posted by Shoot_The_Messengers, a resident of Del Prado
on Dec 13, 2010 at 10:43 pm

Shoot_The_Messengers is a registered user.

b,

You claim that this situation is overblown. However, even Mayor Hosterman has even acknowledged "No one will disagree with Mr. Hughes' general assessment that the current system, much like every other City in California, is unsustainable" in comments here: Web Link

You never addressed my question of what % of the city budget going to entitlements IS no longer overblown.

You argue for a gradual adjustments to address the situation. However, the mayor talks as if the city has been taking steps (gradual) to address this concern. However, these gradual steps (if they really exist have not been effective. By-the-way, when the deal was made in 2002, my understanding is that the city went from paying 0% of the employee's contribution to 100% of the employee's contribution. Were you arguing for a "gradual" adjustment back then?

One thing is certain, CalPERs rates are going up again. The city can take one of three actions:
1) take token action that still results in entitlement spending growing unsustainably.
2) take a bit more action that will offset the coming increases so the entitlement spending stays flat.
3) Take serious action so the entitlement trend line reverses direction.

Which option are you advocating?

In my mind we should be debating how aggressive action in option #3 should be. You seem to be in favor of option #1 or #2.

You also claim Mr. Hughes' data is "fabricated". My understanding is that his numbers are from the city itself. He is challenging you to prove it and meet with him to discuss. So if you claim to have more accurate data, then meet with him and discuss. You no longer have any grounds to doubt his numbers until you have reviewed with him face-to-face.

"b" it's time to put up or shut up, otherwise, your posting are just obfuscations. The folks here aren't buying what you're selling!


Posted by Arnold, a resident of Another Pleasanton neighborhood
on Dec 13, 2010 at 10:46 pm

b

Are you really just concerned about Pleasanton management's ability to make decisions? Maybe you should concern yourself with Pleasanton's ability to cover their rapidly rising costs within the constraints of a budget. Bogus claims, b? Really?

Maybe you should spend some time researching how a city with flat revenue, rising employee costs - including but not limited to rapidly inflating pension costs, and shrinking reserves can continue down this path without either raising taxes or reducing services? If you think the numbers are bogus what is your plan? Is it to raise taxes, reduce services, or start the campaign to get rid of Prop 13?

Bart

Are the numbers you mentioned accurate?

"- Pleasanton funding levels have dropped to a precarious levels this past year (MVA valuation):

- Miscellaneous - 52.2%
- Fire - 55.7%
- Police - 60.2%

If these numbers are true they are extremely troubling. This is life support in pension terms and it will cost taxpayers a fortune. A good start would be for city management to at least acknowledge the problem. Hopefully "b" isn't a part of the city management team.


Posted by b, a resident of Another Pleasanton neighborhood
on Dec 14, 2010 at 6:20 am

My position on this issue comes from my own hands-on management experience, as well as observations of what has happened to other cities that have tried to be heroic forerunners.

If Pleasanton's pay/benefits become 30% lower than what other similar employers in the local market are willing to pay, we'll simply lose the best employees and not be able to recruit new ones. You can't expect workers to be charitable, when you're being neither charitable, nor market-competitive.

So if we truly can't afford it, we can still negotiate gradually better terms over time. The private sector did this by gradually reducing benefits for existing workers while eliminating them for new workers. If that's still not enough, we'll start having to cut city services and staff.

But please don't tie the hands of city leaders with ridiculous rules that prevent them from competing in a historically competitive labor market, or we're doomed to be unable to recruit and retain quality employees. Continue to provide your feedback, and let them figure out the best way to balance the budget--they have a much bigger picture to look at than just your pet project. If they fail, the next election is less than two years away.


Posted by Bart Hughes, a resident of Foothill High School
on Dec 14, 2010 at 6:24 am

I believe the funding level numbers are accurate as I got them directly from Pleasanton's October 2010 CalPERS actuarial report. BTW, the valuation date is 6/30/2009 (the latest available).

I was stunned by the significant drops in valuation. Very troubling.


Posted by b, a resident of Another Pleasanton neighborhood
on Dec 14, 2010 at 6:24 am

...and on the topic of namecalling, I did take insult at the title of this post. I do take issue with the implication that you are a "dummy" if you don't agree with the Bart Hughes slash-and-burn style of organizational management.


Posted by b, a resident of Another Pleasanton neighborhood
on Dec 14, 2010 at 6:30 am

Those numbers probably are accurate for the stated timeframe. I thought I was clear with my point. You can prove most anything if you adjust the timeframes.

I'm periodically shocked at the balances of some of my investments, too. I've learned that it is best to not overreact emotionally, as the point of most pain is usually the point at which it starts to turn to get better.


Posted by b, a resident of Another Pleasanton neighborhood
on Dec 14, 2010 at 6:37 am

6/30/09 was the point at which the markets started to trend up. If you count back ten years, that was the peak of the dot com boom. So your horrible figures, while accurate, nearly exactly trace the dot com peak to 08-09 crash bottom.

Considering that 00-01 was a big down period and 09-10 was a big up period, the next set of 10-year figures should show a MUCH better picture.

And that's precisely my point. Picking timeframes is useless, and easily manipulated for political gain by both sides.


Posted by Bart Hughes, a resident of Foothill High School
on Dec 14, 2010 at 7:03 am

I believe you are misinterpreting the title of this blog. I believe the author was just following the approach of the very popular series of books "____ for Dummies", e.g. Windows for Dummies, History for Dummies, etc. It just connotates a starting point for getting smarter on a topic.

I'm still waiting for you to identify yourself for our 1:1.


Posted by Bart Hughes, a resident of Foothill High School
on Dec 14, 2010 at 7:15 am

b - Do you realize that CalPERS is about ready to lower its investment return target from 7.75%/year. Do you realize that most of the major money managers out there are setting expectations of 4-5% for reasonable annual returns for the next few years? Do you realize that with the current low funding levels, CalPERS will need to achieve 12.15%/year for the next 15 years? And this assumes there will be no down years. A highly implausible scenario.

If we don't deal with the pension situation now, it is guaranteed that it will continue to eat increasingly larger percentages of our annual budget and further starve city services.

It is interesting that you potentially support future layoffs to deal with the issue rather than have the current employees, who have benefited the most from this pension mistake, contribute more.


Posted by Phil, a resident of Another Pleasanton neighborhood
on Dec 14, 2010 at 8:07 am

Bart,

"Then I could explain to you with mathematical facts the impossibly high return rate CALPERS will need to achieve for the next 15-30 years to dig themselves out of the whole they are in. "

Keep repeating a falsehood and hope that people will believe it so that you can advance your Tea Party agenda. I've said already, but you seem afraid to address reality. There is nothing "unsustainable" about Pleasanton pensions or California. What we need to do is raise taxes. The numbers work just fine if you include tax increases. This is California. We don't hate government here. We need government to protect the environment, keep our food and water safe, prevent employers from exploiting workers, and provide adequate retirement. Public workers have it hard enough as it is. I personally know of people who have lost their homes. Quit with the 50% this and 60% that. Bottom line is that we need to provide these workers with a reasonable retirement. If we need to raise taxes to do that, then let's get it done.


Posted by Bart Hughes, a resident of Foothill High School
on Dec 14, 2010 at 9:37 am

Phil - I'll admit that I have a hard time interfacing with people who won't deal with facts and instead attempt to undermine the messenger when facts are consistent with their views.

So I'll move on and leave you with two points:

9/10 Bay Area pension reform initiatives passed in this past election. It is very clear that people don't want to raise their taxes to support an unsustainble public pension system.

Every $50K salary increment of a 55 year old retiring Pleasanton public employee represents at least $1.3 Million in retirement benefits.


Posted by West Side Observer, a resident of Oak Hill
on Dec 14, 2010 at 9:59 am

Phil,

It's the next century not the 1960's.


Posted by Phil, a resident of Another Pleasanton neighborhood
on Dec 14, 2010 at 10:02 am

"It is very clear that people don't want to raise their taxes to support an unsustainble public pension system."

I'll not resort to such obvious games as saying "...to support an unsustainable public pension system." It is only "unsustainable" if taxes are too low, which they are. All this Tea Party non-sense of "taxes are always to high" has to end. You can twist election results any way you want. I'll stick to the facts. People weren't given reasonable choices with these right-wing, Tea Party based initiatives. I'm not calling names, just stating facts. If the public is properly educated about the situation, I think they would support a reasonable, sustainable tax increase to support a modest retirement for those who have sacrificed so much for all of us. Did I mentioned that I know of some people who have lost their homes! If they had just a little more support, they may have been able to keep that home. We all lose when a home goes into foreclosure.

We should be looking at ways to increase benefits, if anything. A reasonable tax increase will get us where we need to be. I would recommend you spend your time advocating for that. Stop the witch hunt!


Posted by Perplexed, a resident of Pleasanton Meadows
on Dec 14, 2010 at 10:06 am

Bart - can you please show your math work on your $50K+55=1.3M calc? What actuary tables are you consulting - just how long are you assuming these retirees will live - to 105? And who in the heck is getting $50K/yr rasies? Only early-retired silcon valley execs are in that boat.

My point: Pleasanton's investment into a worker's pension is only while the person is actively working for the city. Once a city worker quits or retires - Pleasanton is not responsible for one dime of the retiree's future pension. So if they live to 72 or 105, CalPERS pays the pension -- not Pleasanton.


Posted by Pablo, a resident of Downtown
on Dec 14, 2010 at 10:06 am

Bart Hughes,

Let's move back to reality and forget the Phil's of the world. How long do you believe Pleasanton has to invoke some time of sweeping change before we are in to deep to recover? Any impact on current retirees or do they continue to keep the big pensions? What type of impact would California defaulting on their loans have on Pleasanton? I, as well as most people are very concerned with the direction California takes in the next few months.


Posted by Stacey, a resident of Amberwood/Wood Meadows
on Dec 14, 2010 at 10:10 am

Stacey is a registered user.

I think Phil is just being facetious.


Posted by b, a resident of Another Pleasanton neighborhood
on Dec 14, 2010 at 10:14 am

Yes, Bart, I believe that. If you make a massive all-at-once cut to pay and benefits, the best employees are going to leave. Wouldn't you?

If the city really has a budget problem, it is better to balance it with strategic service cuts, strategic layoffs and hiring freezes. You get to the same point, but have better control over the fallout. At least that's my own experience.

Which is not to say the city shouldn't negotiate better terms with workers. I absolutely do agree that the workers should be contributing more. Our disagreement is over the degree and speed of the transition.

The CalPERS projections are just as useless as all the other statistics. The market is going to do what it is going to do.

But since we're going to continue to throw around numbers, I do find it interesting that CalPERS actually did hit that 7.x% projection on the 20-year timeframe ended at your 6/30/09 date. Presumably it'll be even better at 6/30/10, considering the market rebound between 09 and 10. But we're done throwing around useless statistics, so I won't mention that.


Posted by Bart Hughes, a resident of Foothill High School
on Dec 14, 2010 at 10:24 am

Perplexed - CalPERS actuarial figures show that a 55 year old is expected to live to 82 (look it up if you don't believe me). This means that there will be potentially 27 years of benefit payments. For simplicity sake, assume a 3%/year COLA increase and a 3% discount rate. Given this the NPV (net present value) of a $50K income stream is $1.35 Million.


Posted by Bart Hughes, a resident of Foothill High School
on Dec 14, 2010 at 10:35 am

Pablo - Unfortunately, I can't answer your question. Pleasanton is in relatively decent financial shape to we are a ways off from a Vallejo situation. What is and will continue to happen as entitlement cost increase are:

- Decreased service levels
- Decreased accrual rates for reserves
- Increased city fees, e.g. business license fees
- Increased pressure for raising taxes in other areas

The longer we wait on this, the more Pleasanton citizens will sacrifice and the less the people benefiting the most will need to contribute.

Remember this pension expansion is viewed by the majority of people (including those who approved it) as a mistake. Pleasanton citizens have been paying significantly for eight years for this mistake. Pleasanton employees should have been contributing a long time ago but they didn't and still are pushing back on a reasonable cost-sharing approach. We are well past the stage of requiring employees to take baby steps with their contributions. If they continue to want the generous retirement benefits, it is time for them to contribute.

And they can afford it. Miscellaneous Employee income went up by 41% these past eight years.


Posted by Shoot_The_Messengers, a resident of Del Prado
on Dec 14, 2010 at 10:43 am

Shoot_The_Messengers is a registered user.

b et alia,

The title "Plesanton's Pension Situation for Dummies" was meant to be self depricating. When I read Hugh's post with all it's terms CalPERS, SB400 and such Web Link , I felt like a "dummy" and decided to research it for myself. My essay is intended to be a primer to get "dummy" folks like myself up to speed on the situation in a digestible manner.

I can understand how pension apologists might interprest this title as ad hominem and I apologize accordingly if that is the case.

- Cheers, STM


Posted by Messsage Board, a resident of Another Pleasanton neighborhood
on Dec 14, 2010 at 10:56 am

b, you refuse to face reality. It's not about how the market might get better for awhile ! ! ! Is IS about the FACT that Pleasanton pension program, as it currently exists, it UNSUSTAINABLE ! The state of CA is much worse, but that doesn't mean we shouldn't fix Pleasanton in a responsible way...for our own future. Adjustments must be made NOW...for current employees too ! !
NOW ! It would be irresponsible to take our eyes of this in January. Stop with the excuses and rationalization....face up.


Posted by Yet Another Teacher, a resident of Hart Middle School
on Dec 14, 2010 at 11:02 am

Bart Hughes has trouble "interfacing" with certain people?

Computers "interface", Mr. Hughes. People discuss and debate.

You revealed a lot more about yourself than you realize.

I have a hard time discussing an issue with people who "interface" with other biological units of cognition, Mr. Hughes.

Good luck with your anti-union jihad, though.


Posted by Rick, a resident of Foxborough Estates
on Dec 14, 2010 at 11:28 am

The system is bankrupt, but the politicians will continue to use smoke and mirrors until it implodes. Not sure how long it will take. Another 10 years. Hard to say. UC Berkeley Economist


Posted by Shoot_The_Messengers, a resident of Del Prado
on Dec 14, 2010 at 12:16 pm

Phil,

wrt - "witch hunt"

The city is heading for a fiscal cliff. I'm just advocating we put the brakes on before we all plummet.

Your position seems to be we have a revenue problem. I think we have a spending problem.

What is happening in Pleasanton is just a local version of what has happened to California. Our legislature has been unable to put the brakes on California's spending, but maybe we citizens can do the right thing here in Pleasanton. The big X factor is whether our mayor/council have the fortitude to lead on this issue.

To bring everyone back to point, entitlement spending in Pleasanton has grown from 1% of budget in 2002 to 18-20% in 2010 and project to increase more unless action is taken.

So we can keep our heads in the sand and take no action (that seems to be Phil's position), or turn the boat slowly (b's position) or get serious and take decisive action (my postion).

The city is paying the employee retirement contribution in the range of 7-9% of employee's salary. CalPERS employeer rates are going up as well. With all these facts, what is fair for both sides?

Phil/b's position is city keeps paying 100% of employee contribution or perhaps employee now pays 1-2% of the 7-9%. I think that is not enough. I pay 100% of my employee contribution in my work, so that could be argued as "fair market" practices. So when the contract details emerge, we'll know where our leaders have sided by the new % contribution for employees.

And one more thing, the contract that is being negotiated NOW is the 8 year contract that was put in place in 2002. Is the city going to lock us into another 8 years with some nominal 1-2% concession and THEN start holding public forum on this issue.

The mayor is clearly stalling and hoping to get this contract "slipped" by and done so she can then go play lip service to the problem.

Whether we let our leaders get away with this strategy is up to us!

Regardless of which side you are on, email the mayor/council and let them know this is an important problem that they need to address NOW!

citycouncil@ci.pleasanton.ca.us


Posted by Phil, a resident of Another Pleasanton neighborhood
on Dec 14, 2010 at 12:19 pm

Bart,

I'll have to throw some cold water on your crusade to undermine the retirement benefits for some of the people who have sacrificed so much.

1. You seem to be saying that government workers have more in retirement benefits than some of those in the private sector. Instead of trying to improve matters to those in the private sector who have lost or never had pensions, and now have inadequate savings, you are trying to take things out on public employees, whose retirement benefits are sometimes better. You need to re-focus your attention here on increasing government oversight of local businesses and penalizing businesses overseas who do not adequately provide for their workers. Wouldn't you be happier building things up rather than tearing them down?

2. You say we can't afford to provide the retirement benefits our public employees have. When the answer is staring you in the face that we need to increase taxes by a modest, reasonable amount, you respond with the typical Tea Party answer that we can never ever increase taxes -- even when it is prudent and necessary. Just saying over and over again that it is "unsustainable" doesn't make it so. Readers of this blog know better and can see through such nonsense. Any shortfall can be adequately addressed with increased taxes and tariffs. Alarmist talk of bankruptcy is counter-productive and irresponsible.

I have stuck to the facts and avoided fear and emotionalism. I hope that you will do the same. I await your reply.


Posted by Bart Hughes, a resident of Another Pleasanton neighborhood
on Dec 14, 2010 at 12:26 pm

Perplexed - One more thought on your post. We as citizens do need to care about employees post retirement as Pleasanton taxpayers are responsible for making those retirement benefits. Yes, CalPERS does the investing but taxpayers have to pick up and shortfall. This is why Pleasanton annual entitlement costs have grown from <$1M in 2002 to $15M this year.


Posted by Phil, a resident of Another Pleasanton neighborhood
on Dec 14, 2010 at 12:29 pm

"So we can keep our heads in the sand and take no action (that seems to be Phil's position)"

I strenuously object to having my position characterized in this way. I proposed several actions. Among them were finding ways to increase taxes and putting more pressure on businesses to provide better for their workers.

Yes, I think to continue to pay 100% is OK, and I don't think we should even be considering "fair market" practices, because it doesn't apply. I think your employer should be doing more if they don't provide any matching contributions for you. Let's get a provision on the ballot mandating that.


Posted by Pablo, a resident of Downtown
on Dec 14, 2010 at 1:07 pm

Bart Hughes,

Possibly one thing to consider would be a VEBA or at least that is what the government, GM, and the UAW call it. GM/Government transferred what funds they had to the UAW (union) and from that point forward the employees were responsible for funding their own pension plans through their own contributions (401K) with the company matching up to a maximum of 10% of their contributions dollar for dollars. It could be considered by the Pleasanton Council to do the same thing here in town.


Posted by two cents, a resident of Another Pleasanton neighborhood
on Dec 14, 2010 at 1:22 pm

b, you say "the best employees are going to leave". Well there are 12% unemployed out there desperate for a job and many are taking a lower paying job to work. Many of these people are very well qualified. Don't worry about finding good people for the jobs. I doubt very much people would leave jobs to test the waters in the private sector right now. I wouldn't.

Phil - you say "raise taxes". Remind me again where CA is on the pecking order of state taxation. I believe it's one of the highest already. Bart is right, we have a spending problem, not a revenue problem. And people aren't going to vote for more taxes until they are sure that it will be used properly - you saw the election results right?


Posted by Phil, a resident of Another Pleasanton neighborhood
on Dec 14, 2010 at 1:42 pm

" And people aren't going to vote for more taxes until they are sure that it will be used properly - you saw the election results right?"

What election results?

Governor -- Brown
Senator -- Boxer
Representative -- McNerney
State assembly -- Democrat

People in California have higher taxes than Texas or Alabama because that is what we want. That is the way we choose to live. It is our choice to live here. We have just as much a right to want a more involved, fairer government as you have a right not to want that. I recommend that you talk to some people outside your immediate group of friends and see what your community is like before you start speaking for everyone.


Posted by Pablo, a resident of Downtown
on Dec 14, 2010 at 2:13 pm

Two Cents,

Here is part of your answer. I guess we need to do something quickly because very soon we flat out run out of money.


Web Link


Posted by two cents, a resident of Another Pleasanton neighborhood
on Dec 14, 2010 at 2:17 pm

My take on the election is that Democrats won, but most things involving higher taxes or playing games with revenue was voted down in this state.

Jerry Brown said no new taxes unless we vote for it, so I guess we'll have to wait to see the result of this.

I know for sure that if CA needs a bailout, the other states are not going to be as generous to us and our government workers as you'd like them to be so we'd be better off sorting this out ourselves.

Which starts with living sustainably within our means.

Plenty of my group of friends are as democrat as can be, I was until the last election. They are also a diverse group from many different nationalities and most are very generous, helping out a lot in the community etc. All but one agree that the pension situation is a real problem that we can't kick the can down the road any longer. Many have kids though, so perhaps that's why it comes across this way, because we feel bad for what we're doing to them and their future by not controlling costs and living within our means now.


Posted by b, a resident of Another Pleasanton neighborhood
on Dec 14, 2010 at 3:31 pm

I take issue with your assertion that I am not facing reality. In fact, I seem to be the only one looking at this issue holistically. This is a city of with tens of thousands of citizens and hundreds of employees. You can't simply massively cut pay and benefits, without consequences.

Yes, unemployment is high right now. But the job market really isn't that bad for good professionals. The BEST people will always have options. They need to take care of their families, and there are plenty of employers that will be more than happy to hire them. We'll be stuck with anyone who is willing to work for our below-market wages and benefits.

Is this an important issue? Yes. Is there an opportunity to correct some problems with the old plan? Yes. Is the city going to end up in bankruptcy because of this? Stop being so dramatic.


Posted by two cents, a resident of Another Pleasanton neighborhood
on Dec 14, 2010 at 4:31 pm

to b: "I take issue with your assertion that I am not facing reality"

I didn't say this, but maybe someone else did.

"You can't simply massively cut pay and benefits, without consequences."

We're talking about pensions, not massive pay cuts, don't put words in my mouth. We're suggesting that things go back to the way they were 8 years ago when there were still good people working here.

"But the job market really isn't that bad for good professionals."

Yes it is for the private sector. There are some very good people who need jobs now. There have been many articles about extremely well qualified people not able to regain employment this time.

"We'll be stuck with anyone who is willing to work for our below-market wages and benefits."

You could actually get some very well qualified private sector people applying.

"Is the city going to end up in bankruptcy because of this?"

If you make us drain the reserve to pay for pensions and then this is a possibility. If we reduce services no one will want to live here.


Posted by Stacey, a resident of Amberwood/Wood Meadows
on Dec 14, 2010 at 4:32 pm

Stacey is a registered user.

Phil,

Here's Jerry Brown's campaign platform on pension reform: Web Link

I'm just not seeing "raise taxes" there... Brown is on record elsewhere commenting on how the recent election showed that while voters want to make it easier for the Legislature to pass a budget, they don't want new taxes.


Posted by Stacey, a resident of Amberwood/Wood Meadows
on Dec 14, 2010 at 4:38 pm

Stacey is a registered user.

"A cottager and his wife had a Hen that laid a golden egg every day. They supposed that the Hen must contain a great lump of gold in its inside, and in order to get the gold they killed it. Having done so, they found to their surprise that the Hen differed in no respect from their other hens. The foolish pair, thus hoping to become rich all at once, deprived themselves of the gain of which they were assured day by day."


Posted by b, a resident of Another Pleasanton neighborhood
on Dec 14, 2010 at 4:47 pm

Maybe they're just looking in the wrong places. I can't find good people for the openings I'm trying to fill. On the other side of the coin, I'm getting more recruiter calls than at any point in the past 10 years. VERY different than 1-2 years ago.

This is just the Tea Party drama of the moment. It'll be a distant memory next year.


Posted by t-time, a resident of Another Pleasanton neighborhood
on Dec 14, 2010 at 5:17 pm

"This is just the Tea Party drama of the moment."

- Be careful of what you wish, b.


Posted by to b, a resident of Another Pleasanton neighborhood
on Dec 14, 2010 at 5:19 pm

I'm actually really glad to hear that there are openings and recruiters are active. I hope this is a sign that things are picking up and that unemployed people will be employed soon.

Perhaps you need to get the word out better - there are a lot of unemployed out there, who if they aren't working and if there are good jobs out there, people should be applying and working rather than getting unemployment. Why don't you let us know where you post your jobs - I think there have been over 2,000 views of this topic, so you might help out someone who really needs a job before Christmas.

Still doesn't fix the pension mistake that was made and needs to be corrected.


Posted by Bart Hughes, a resident of Another Pleasanton neighborhood
on Dec 14, 2010 at 7:45 pm

Stacey - Thanks for posting the Brown pension reform link. Very interesting.

It seems as though pension reform is common sense to many on both sides of the isle.

Let's hope we can achieve what is fair and equitable to both Pleasanton employees and residents in a reasonable manner.


Posted by b, a resident of Another Pleasanton neighborhood
on Dec 14, 2010 at 8:10 pm

Pension reform is common sense. It just needs to be done in a well-managed and humane way, not the slash-and-burn approach that seems to be favored by this crowd.


Posted by Phil, a resident of Another Pleasanton neighborhood
on Dec 14, 2010 at 8:43 pm

"Brown is on record elsewhere commenting on how the recent election showed that while voters want to make it easier for the Legislature to pass a budget, they don't want new taxes."

Show me where he says he won't raise taxes. I never saw that. He said he won't raise taxes without asking the voters. There is a big difference. We will need someone like Governor Brown to properly present the case to the voters without all the hyperbole we are seeing on these forums.


Posted by Bart Hughes, a resident of Another Pleasanton neighborhood
on Dec 14, 2010 at 8:58 pm

b - Now who is being over-dramatic here? You'd think that those that like to accuse others of grievances would at least operate in a consistent manner. BTW, I'm still waiting for your contact info at ptownreform@gmail.com ...

No one is talking slash and burn here. We just have issues with employees being asked to contribute only 1-2% of their 7-9% contribution rates, especially given taxpayers have picked up 100% of the cost overruns these past eight years.

Given the CalPERS rate for Misc. employees is going up 3.8% next year, it seems reasonable to me that they could pick up this portion. Slash and burn would be to have them pick up 100% of their contributions (as many other cities are doing) plus pick up a portion of the employers contribution (as some cities are doing).


Posted by Stacey, a resident of Amberwood/Wood Meadows
on Dec 14, 2010 at 9:12 pm

Stacey is a registered user.

Where did I write that Brown said he won't raise taxes?

Brown knows well that any new taxes need wide voter support since voters raised the bar to 2/3rds. Brown knows that to achieve 2/3rds, it isn't just a matter of presenting the case to voters without hyperbole, but of presenting the case with something in hand to show voters that he's done the hard work. In other words, it would be really silly of Brown to come to voters asking for new taxes without having implemented a major amount of his pension reform platform. We saw how far Schwarzenegger got with going to voters.


Posted by Stacey, a resident of Amberwood/Wood Meadows
on Dec 14, 2010 at 9:40 pm

Stacey is a registered user.

An interesting and well-written opinion on this subject: Web Link

"_Employees should pay half._ First, the optimal public policy is a 50-50 match of employer and employee contributions to retirement plans. When employees bear half the cost of a retirement benefit, they have equal skin in the game. There is no free lunch. Experience has shown that employees are far more responsible about retirement benefits when they pay half the cost of those benefits. From a labor-market perspective, there are very few employers outside of government that match employee contributions with equal shares. The "attract and retain" argument for healthy retirement benefits that we often hear is just a smokescreen when employees pay less than half the costs. In today's competitive labor markets, they really should be paying two-thirds of the costs of all retirement benefits to achieve parity with the private sector which more typically matches only 50 percent of employee contributions. However, that takes the argument to unnecessary extremes."


Posted by Not So Sure, a resident of Another Pleasanton neighborhood
on Dec 14, 2010 at 11:56 pm

I'm sorry. I'm not paying another dime in taxes. We are maxed out.

We do not have any pensions. We expect to be able support ourselves in our old age because of our savings...and so should you if you are a city employee.

Enough already!!!!!!!

Oh - and if a bunch of city employees want to quit their jobs for greener pastures...my husband and I will take those jobs. We are experienced professionals with supporting resumes and we would love to work in our own city. We can contribute substantially for another 15 years ...without asking for a pension.


Posted by Phil, a resident of Another Pleasanton neighborhood
on Dec 15, 2010 at 8:48 am

"We do not have any pensions. We expect to be able support ourselves in our old age because of our savings..."

It is small consolation, but you have social security and Medicare. We need our government to do more regulation of private companies to force them to provide better retirement benefits for employees.


Posted by Bobby, a resident of Del Prado
on Dec 15, 2010 at 10:37 am

Phil,

Have you noticed that no one responds to your blogs? I think it might be because you are trying to play the fool or being a troll. What do you think you can do to be taken seriously or is that not your intent?


Posted by Phil, a resident of Another Pleasanton neighborhood
on Dec 15, 2010 at 10:55 am

Looking above, I see a number of responses to me including Stacey, Bart, "two cents", and now you. In fact, it is you who appear to be making a rude blog post. Since when is it foolish to advocate for bigger government and higher taxes? I'm saying that what Bart is saying just isn't true. He throws around the word "unsustainable" like it is a fact, when in reality it is not.

People who complain that their employers do not provide pension benefits are directing their anger at the wrong place. Proper government regulation of businesses to require them to provide adequate retirement benefits for workers is what we need to be looking at. We need to expand government services and government protections so that we can all benefit.

I thank you for taking time to read my posts and make a response. I hope you will give more thought to what I'm saying in the future. Government is not the problem, it is the solution.


Posted by Jonna Silver, a resident of Another Pleasanton neighborhood
on Dec 15, 2010 at 11:52 am

Phil,

Your blogs are so very insightful. Could you give us your outlook on global warming, UFO's, Santa Claus, big foot etc.

I would also be interesting in your viewpoint on working in general and if it is truly necessary or whether the government should just pay everyone the exact same amount of money regardless of work. I work in daycare and would love to be able to get the same salary and benefits as our city workers. I wonder if they people who come in for daycare for their children would appreciate rates going up 10 times to cover my new pay and benefits???


Posted by Phil, a resident of Another Pleasanton neighborhood
on Dec 15, 2010 at 12:49 pm

To Jonna,

I was going to thank you for your kind words, but I can see that you are being sarcastic. Your post seems to be symptomatic of what is wrong with these Pleasanton Weekly Town Forum blogs. It seems that a small fringe group of Tea Party wants to use this as there place to vent. They see anyone who doesn't buy in to their small government backward looking world view as crazy. I'm here to tell you that these forums are not your little club. Read the rules. They are for conservatives and liberals alike. Instead of just ridiculing everyone who disagrees with you, ask yourself why Boxer, McNerney, and Brown won the elections. Look around. There are plenty of liberals like me who look to the government for solutions, rather than always tearing it down. Many of us prefer FRR to Ronald Reagan.

California has been instrumental in so many ways in leading the country in liberal causes. California was first to insist on smog controls for cars. Now it is national law, and thousands of lives have been saved. There are many examples.

My point here is that this discussion is not framed properly. We need to put all possible solutions on the table. Pension shortfalls can be addressed with taxes. Iniquities can be addressed through regulations and tariffs. The is no crisis in Pleasanton. Rather than pulling one group of people down, let's lift them all up!


Posted by Phil, a resident of Another Pleasanton neighborhood
on Dec 15, 2010 at 12:50 pm

Correction to above: I meant "FDR", not "FRR"


Posted by Bart Hughes, a resident of Another Pleasanton neighborhood
on Dec 15, 2010 at 1:01 pm

Phil - If you are calling my figures/statements untrue then you are essentially suggesting Pleasanton City/CalPERS publishes false information because that is where I am getting my information.

It amazes me that you can make all these claims without once providing a sourced fact that counters my statements. At least I have made the effort to understand the facts before forming an opinion. Why don't you do your homework, contact the city and then debate us with information instead of your highly biased opinions?

Then maybe we'd take you more seriously.


Posted by Phil, a resident of Another Pleasanton neighborhood
on Dec 15, 2010 at 1:29 pm

Bart,

I'm not disputing your figures. I'm disputing the claim that it is "unsustainable". Higher taxes are one way to get us to where we are able to maintain long term financial stability.


Posted by Bart Hughes, a resident of Another Pleasanton neighborhood
on Dec 15, 2010 at 1:40 pm

There you have it folks. People like Phil would take more money away from you (reducing your savings and pushing out your own retirement) so that government employees can continue to retire at ages between 50 and 55.

He would ignore common wisdom these days by people on both sides of the isle that the current public pension system is unsustainable.

Thank goodness people like Phil are in the minority as evidenced by 9 of 10 Bay Area public employee pension reform initiatives passing by LARGE margins.


Posted by Phil, a resident of Another Pleasanton neighborhood
on Dec 15, 2010 at 2:36 pm

"People like Phil would take more money away from you (reducing your savings and pushing out your own retirement) so that government employees can continue to retire at ages between 50 and 55."

That is an obvious distortion of what I said. I said that in addition to tax increases, I would favor more regulation on businesses, requiring them to provide adequate retirement benefits for their workers. There is far more work to do on this front before we even think about modifying the benefits for our government workers.


Posted by Bobby, a resident of Del Prado
on Dec 15, 2010 at 3:39 pm

Phil,

Ha ha ha, good luck to you.


Posted by two cents, a resident of Another Pleasanton neighborhood
on Dec 15, 2010 at 6:22 pm

Keep going Phil! Bart and Shoot a Messenger's well researched, well presented and neutrally toned message is fading for me . . . ! You are just joking though, right?

Council members, please come on, get this right. Even J. Brown has said the pension situation is bad and gov't will not be able to ask voters to increase taxes until trust is restored.


Posted by Pablo, a resident of Downtown
on Dec 15, 2010 at 7:57 pm

Well I guess the clock is ticking on our Mayor and the Council to get something done. I do not believe for a moment that a citizens group should make recommendations to the very group we elected to resolve issues like the one they created themselves. Seems foolish and a stalling tactic to me. Tick tock Cinderilla!!!


Posted by John, a resident of Another Pleasanton neighborhood
on Dec 15, 2010 at 9:26 pm

You try to come across as well researched and logical Bart, I hear you as a bully to anyone with an opposing viewpoint. Makes me really not trust your motives at all. Personally, I think Phil makes sense. Your "minority" is just not posting to your reactionary stance- the sky is not falling- the economy is back- the private sector jobs aren't because they were more productive and less wasteful when forced to cut back. Private sector greed and waste is to blame for the mess we have been in, and now you want to make everyone believe otherwise?


Posted by two cents, a resident of Another Pleasanton neighborhood
on Dec 15, 2010 at 9:48 pm

Sure John, everything in CA is just fine, see below . . .

Have you heard about the municipal bond rates going up despite QE2? I wonder if it has anything to do with people losing confidence in the potential payback of certain states? You know that this means we have to pay more in interest to pay back debt.

And didn't you notice even Jerry Brown is basically saying -the sky is falling!

Web Link

"California's huge deficit does not include over $200 billion in loans and unfunded liabilities, including projected pension expenses it has little chance of paying. At some point, the deficit spending has to stop. If not voluntarily, events will force the issue. The probability of California defaulting on debt, sooner rather than later, increases evermore on a daily basis."




Posted by Bart Hughes, a resident of Another Pleasanton neighborhood
on Dec 16, 2010 at 6:25 am

I am sorry I come across as a bully as that is not my intent. I will continue to stay focused on presenting the facts and situation as I learn them.

My intent is quite simple. I'm trying to create a more equitable distribution between employees and taxpayers of financial burden from this pension expansion mistake.


Posted by Pablo, a resident of Downtown
on Dec 16, 2010 at 8:50 am

Bart Hughes,

You are not a bully and Phil/John are just trying to deflect off onto the liberal tax and spend mentality. Just stick to the facts and the truth and everything always works out fine.


Posted by MoolaTalks, a resident of Another Pleasanton neighborhood
on Dec 16, 2010 at 8:58 am

Anyone following the money....?

Mayor Hosterman - 10/28/2010 contribution of $2000 from Electrical Workers Local 595 PAC 1273532, Dublin CA Web Link
Here's where the unions made their move… Web Link


Council member Cook-Kallio - 10/28/2010 contribution of $2000 from Electrical Workers Local 595 PAC 1273532, Dublin CA
Web Link

Here's where the unions made their move… Web Link


Posted by Phil, a resident of Another Pleasanton neighborhood
on Dec 16, 2010 at 8:59 am

What is wrong with having a liberal tax and spend mentality? Isn't it better to tax and spend than borrow and spend?


Posted by Phil, a resident of Another Pleasanton neighborhood
on Dec 16, 2010 at 9:07 am

I'm glad our elected officials support Unions in the private sector. You people have been complaining all over the place in this blog about what a raw deal people in the private sector are getting for their retirement benefits. Did you know that union membership in the private sector is at a 100 year low? We need to focus our efforts on turning that around. I'll say it again, why not pull everyone back up instead of tearing one group down. Greedy capitalists got us in to this mess. Socially responsible liberals can get us out!


Posted by MoolaTalks, a resident of Another Pleasanton neighborhood
on Dec 16, 2010 at 9:07 am

Sorry the links are broken, you'll have to click through yourselves:
go here Web Link
search hosterman, look at her last filing....$2000 from the union the last week of election. Her biggest contribution. Same thing happened for Cook-Kallio.


Posted by disgusted, a resident of Another Pleasanton neighborhood
on Dec 16, 2010 at 9:57 am

That's pretty telling that the union would contribute that kind of money at the last minute to those two liberal democrats. Guess what the union wants with all the land that needs to be rezoned for housing. . .


Posted by Shoot_The_Messengerss, a resident of Del Prado
on Dec 16, 2010 at 12:47 pm

The money aspect is interesting. I haven't followed previous city elections very closely, so I don't know what is to be expected here.

Anyone know why Sullivan hasn't disclosed his campaign finances since 6/20/2010? Shouldn't he have filed by now. Is he part of the Hosterman/Cook-Kallio union payoff scandal too?

McGovern hasn't filed since 9/30...is there smoke here too?

I checked Thorne's statements and he looks clean. No mysterious last minute contributions.

But who knows what these people may have stashed in their freezers.


Posted by Bill, a resident of Amberwood/Wood Meadows
on Dec 16, 2010 at 12:50 pm

A 2010 study by the Santa Clara County Civil Grand Jury, "Cities Must Rein In Unsustainable Employee Costs," finds that today's public sector wages and benefits have grown "dramatically" over the last decade, and total municipal compensation "is out of sync with private industry and…unsustainable."

The Grand Jury surveyed 15 South Bay cities and found consistently increasing compensation, even though revenues and services are declining across the board. Although the economy has plummeted, compensation – wages, health care benefits, vacation, holiday and sick leave are all growing at substantially faster rates than the local economy and municipal general fund revenues, according to the report.

Communities cannot sustain these costs, the report says, and local elected governments need to bite the politically unpalatable bullet of containing them. The Grand Jury's recommendations include:

1. Reduce costs by contracting with private businesses, and partnering or consolidating with other cities, special districts or the County for services.
2. End the practice of approving contracts with public employee bargaining units – unions – by a single motion and vote as part of the consent calendar.
3. Subject negotiations with employee bargaining units to public scrutiny and approval by conducting well-advertised public hearings both before and after negotiations, specifically reporting the terms of each contract.
4. Cities that have binding arbitration agreements should open those negotiations to the public and their Councils should ask voters to repeal binding arbitration measures.

The US census reports that the average salary of a government employee is now $6,000 dollars more then for a private sector employee doing the same type of work.

Once upon a time, public sector workers earned far less than employees in private businesses. In return, civil service employees received generous benefits. This obviously does not hold true anymore, and neither should the practice of funding pensions of workers who could afford, and then some, their own retirement.






Posted by AQrnold, a resident of Another Pleasanton neighborhood
on Dec 16, 2010 at 3:35 pm

California's "Fantasy Land" budget finally comes to light of day. Jerry Brown said "I'm shocked. The mess is much worse than I thought."

In turn, educators and unions were shocked by Jerry Brown's and state treasurer Bill Lockyer's statements "cuts are coming". Brown promised more cuts but no tax increases without voter approval.

The LA Times reports Brown wants to fast-track budget agreement within 60 days.

Gov.-elect Jerry Brown said Tuesday that he wants to complete a budget agreement within two months of unveiling his budget, an accelerated timeline that would allow a late-spring special election for potential tax increases or other revenue generation.

"We'll present a budget on Jan. 10. It will be a very tough budget, but it will be transparent," he said. "We'll lay it out as best I can. We've been living in fantasy land. It is much worse than I thought. I'm shocked."

A spokesman later sought to play down the timeline, calling it "an ambitious goal."

Brown has refused to publicly discuss his budget plans, but he has met privately with lawmakers and interest groups. People involved in the meetings expect him to enact an austerity budget in the spring, then hold a special election in which voters can decide whether to raise taxes or other revenues in order to restore services. He pledged during the campaign not to increase taxes without voter approval.

"This is really a huge challenge, unprecedented in my lifetime," Brown told hundreds of educators, union representatives and parents who had gathered at UCLA. "I can't promise you there won't be more cuts, because there will be."

"The day of reckoning is upon us and I'm determined to bite the bullet, get it done in whatever way the consensus of California can be built," he said. "Fair, transparent and enduring — that's my goal."

The rest of the story (article) here: Web Link

P-Weekly: please do not remove this post


Posted by Arnold, a resident of Another Pleasanton neighborhood
on Dec 16, 2010 at 3:44 pm

Phil

I'm a supporter of private sector unions. Many people, especially in the building trades, need some sort of wage protection, during economic downturn especially, because they don't have guaranteed hours. Public sector unions have guaranteed hours, 14 paid holidays per year, they can be paid guaranteed overtime rates even if they don't work more than 40 hours in a week or more than 8 hours in a day (during the same week), their pensions are much more substantial, and their healthcare benefits are so extreme that they cost the city about 1,800 dollars per month. That is about half the story.


Posted by t-time, a resident of Another Pleasanton neighborhood
on Dec 16, 2010 at 4:20 pm

I agree with Arnold and have no problem with private sector unions...as long as the rights of an individual person to work outside the union is honored.

People have the right to organize, just like we are now for a June ballot initiative to address this problem IF the mayor/council's current contract negotiation does not result in a "fair" outcome for us taxpayers.

And have no doubt about it, the budget situation for the state WILL be the top story in June and Pleasanton citizens will understand the connection and react accordingly.

b WILL get what she has wished for. b seems to be characterizing "fair" as "slash and burn". We'll see what the voters think...I do not hope for this path, but many are preparing for it.

I hope the mayor/council (and unions) are listening.


Posted by two cents, a resident of Another Pleasanton neighborhood
on Dec 16, 2010 at 5:28 pm

My brother works for a company with union employees (not in CA). They are voting this week on whether they will accept a new contract with reduced health and pension benefits and significantly reduced pay (and they have no way close to public sector benefits).

The alternative is that they will have to shut down the entire operation in the state they are in as it will not be profitable, particularly compared to where they operate overseas. This is the reality for the private sector. It's fine to organize of course, but companies also need to be profible, it's the way of the world and oversized benefits are not competitive in this global marketplace.

Oversized benefits and early retirements that are not comparable to the private sector are also not appropriate in the public sector, particularly if they are paid for by a larger and larger % of tax dollars every year that really are needed to keep services going properly.


Posted by Arnold, a resident of Another Pleasanton neighborhood
on Dec 16, 2010 at 7:48 pm

Good Info, Two Cents

That seems to be the reality of the private sector in general, regardless of whether or not it is private sector union employees or the rest of us that make up the private sector category.

The public employee unions, at least in Pleasanton, have been receiving raises during the entire recession. For some reason, unbeknownst to me, they seem to have some special protection that doesn't extend to the people in the private sector that pay their wage-pension benefit-retiree healthcare-and the absurd level of healthcare/dental/counseling benefits/life insurance benefits.

For the most part this group has been padding compensation and benefits for over a decade. I often here the comment that we, the taxpayers, should have done something about this long before it became an issue. Taxpayers are just complaining because they didn't make the right job choice. Hogwash, the problem with that logic is that the taxpayers have been kept in the dark for at least a decade. When you read about public employee wages they only reference salary schedule numbers. Thanks to the power of the internet, and the fact that cities have just recently begun providing some on-line information about salaries, People are finally beginning to clue in. We now know that the salary schedule pay rates only represent 55-60 percent of total compensation.

Thanks to the efforts of the "California Foundation for Fiscal Responsibility", and all the legal action they have taken on behalf of the taxpayers, pension compensation has just recently become available on-line. The pension data has now gone mainstream, the dirty secret is out, and now we can all see just how ridiculous these pensions really are.

Both Alameda County and especially the state of California have unbelievable financial issues they are facing, and those issues will affect Pleasanton. Pleasanton itself has some very serious pension issues of its own and any lack of corrective action by the city will only exacerbate the problem and increase the probability of the city pushing for tax increases in the near future.

If you agree with me please email our city council members and voice your concerns.


Posted by Stacey, a resident of Amberwood/Wood Meadows
on Dec 16, 2010 at 8:13 pm

Stacey is a registered user.

I think some readers are having difficulty understanding what "unsustainable" means. When more money is going out than is coming in and that trend is expected to continue, that's unsustainable.


Posted by Stacey, a resident of Amberwood/Wood Meadows
on Dec 16, 2010 at 8:28 pm

Stacey is a registered user.

Here's another example: When someone is expected to make more in retirement than they made in all their years working, that's unsustainable.


Posted by Pablo, a resident of Downtown
on Dec 16, 2010 at 9:13 pm

Tax increases? We already have the highest taxes in the nation. come on people we need to cut costs and bigtime right now. Major cuts and as our governor elect said today possibly 25% across the board.


Posted by Phil, a resident of Another Pleasanton neighborhood
on Dec 16, 2010 at 9:45 pm

"The alternative is that they will have to shut down the entire operation in the state they are in as it will not be profitable, particularly compared to where they operate overseas. "

This is truly bad. If the government can bailout Goldman Sachs, why can't it bail out this company?

One way to slam the brakes on shipping this stuff overseas is match them tariff for tariff. You don't think China puts higher tariffs on our stuff than we do on theirs? Think again. Where is Ross Perot when we need him?


Posted by Phil, a resident of Another Pleasanton neighborhood
on Dec 16, 2010 at 9:48 pm

"Here's another example: When someone is expected to make more in retirement than they made in all their years working, that's unsustainable."

Well, I would say that if you investment that money well and it leads to a high level of wealth creation, the return on the dollars could be much greater than was ever put in. New efficiencies and new business models would result in greater wealth for everyone. That could be sustainable.


Posted by IF only, a resident of Another Pleasanton neighborhood
on Dec 16, 2010 at 10:48 pm

Phil, that's a really big IF. ..but it's not facing REALITY !
We'd all love investments that lead to wealth creation...you know some secrets we don't ? ...... the rest of the country would love to know those guarantees ! IF onlys won't feed the public accounts


Posted by Stacey, a resident of Amberwood/Wood Meadows
on Dec 16, 2010 at 10:53 pm

Stacey is a registered user.

And there's the rub. The long term returns are not greater (go look this one up), which is why private pension funds usually assume around 6% returns. Expecting the returns to be greater is called gambling.


Posted by Stacey, a resident of Amberwood/Wood Meadows
on Dec 16, 2010 at 11:03 pm

Stacey is a registered user.

Here's a reminder article for those who have forgotten: Web Link

"CRAIG BOWEN'S SALARY during his final year as chief of the San Ramon Valley Fire Protection District was about $221,000 a year. So how did he end up retiring in December with a tax-advantaged annual pension of $284,000?"

Most public employees do not fall into this egregious example. It is examples like this though that ruin it for the rest. It's more money out the door than was put in so it comes out of everyone else's future, both taxpayers and other public employees. Because when the public sees this kind of thing, they clamor for reducing or replacing current public employee pensions.


Posted by Bart Hughes, a resident of Another Pleasanton neighborhood
on Dec 17, 2010 at 6:54 am

Phil here is another statistic for you. Do you know that the CA budget even after all the cuts that have occured the past couple of years is 78% larger than it should be when compared to an index of inflatin/population growth? I'd be happy to send you the analysis with government sources identified so you could confirm it yourself.

The big myth out there is that prop 13 destroyed the revenue base. This is absolutely not true. Do you know that property tax revenue has grown much faster than baseline and is know 5-6x larger than when prop 13 was passed?

We have a spending problem, not a revenue problem. There is waste and inefficiency in many places. You may complain about the same thing in areas of private industry but please remember that inefficient companies either fix themselves or they are driven out of business.


Posted by Johnny, a resident of Del Prado
on Dec 17, 2010 at 8:49 am

My buddy works for the California dept of agriculture and he applied for and was transferred to the Dunsmuir office. He said he now works at the Oregon border asking people if they are bringing fruits or vegetables into the state. Here is the kicker, he makes $80,000 bucks per year and 7 others work with him during his shift, they have 4 shifts total because they have to cover 24/7, so that is 32 people not counting the supervisors nor the highway parole. That is $2,560,000 dollars per year just at the one crossing!!!


Posted by Phil, a resident of Another Pleasanton neighborhood
on Dec 17, 2010 at 11:46 am

"We have a spending problem, not a revenue problem. "

That is an opinion, not a fact. You are free to have that opinion just as I am free to have the opinion that we have a revenue problem, not a spending problem.

All the business about proposition 13 is irrelevant. I could send you all sort of links rebutting that stuff, but that is not my point (I've seen those articles too, but I don't get all my information from right-wing sources). The point is that the public wants more in services. Those services require revenue. One way to get that is higher taxes. Simple stuff.


Posted by Bart Hughes, a resident of Another Pleasanton neighborhood
on Dec 17, 2010 at 12:23 pm

Then I guess you are assuming the government is right-winged as the sources below come from the government or related reporting agencies themselves. It might be worth your while to construct the analysis on your own and then form your opinion on facts as I have. Or find me and I'd be happy to forward my analysis to you. I would welcome your scrutiny as I am open to changing my opinion if information says something different.

Web Link

Web Link

Web Link


Posted by Bart Hughes, a resident of Another Pleasanton neighborhood
on Dec 17, 2010 at 12:24 pm

Rest of the URLs:

Web Link

Web Link

Web Link


Posted by two cents, a resident of Another Pleasanton neighborhood
on Dec 17, 2010 at 1:09 pm

Phil, the public wants the same services.

What they do not want is an increasing proportion of their tax money diverted away from services and into guaranteed public sector pensions that the public sector employee contributes nothing or very little to. The 1% we contributed in 2002 is fine.

If you can research and make a good business case for your position like Bart has, please feel free to present it.


Posted by Phil, a resident of Another Pleasanton neighborhood
on Dec 17, 2010 at 1:11 pm

You've only given links to raw data. Getting from there to "...occured the past couple of years is 78% larger than it should be when compared to an index of inflatin/population growth" requires some explaining. What do you mean "where it should be"?

What does "grown much faster than baseline " mean? What is the "baseline"? Personal income and net worth als You aren't saying that revenue is higher now _because_ of proposition 13 than it would be without are you? You could spin those numbers any way you want. We could go around and around on this forever, but this isn't a thread about proposition 13 anyway.

I like to say "if ifs and buts were candy and nuts, oh what a party we'd have!".


Posted by Phil, a resident of Another Pleasanton neighborhood
on Dec 17, 2010 at 1:19 pm

"Phil, the public wants the same services. "

There are all kinds of new and better services than in the past. There are so many examples. Fifteen years ago could have renewed your vehicle registration on the Internet? I think not.

And you, many of us do want our tax money paying for pensions for public sector workers. We would also like to see a lot of workers in the private sector get pensions.

"If you can research and ..."

What research? I just see a lot of regurgitation of statistics and right-wing spin.


Posted by Arnold, a resident of Another Pleasanton neighborhood
on Dec 17, 2010 at 2:23 pm

The Wall Street Jornal intervies David Crane on the California Pension Crisis (video interview). This is an excellent presentation of the problem:

Web Link


Posted by Stacey, a resident of Amberwood/Wood Meadows
on Dec 17, 2010 at 3:07 pm

Stacey is a registered user.

More money out the door than comes in. Cut spending. Simple stuff.


Posted by Bart Hughes, a resident of Another Pleasanton neighborhood
on Dec 17, 2010 at 11:04 pm

Phil - I continue to smile when I continue to receive the right-wing digs from you as I likely have voted for many of the same candidates as you over the years. All I can say is that I'm an Independent who is very concerned about the fiscal path our country is taking and the impact it will have on the lives of future generations. I can say with certainty that we are not leaving the world a better place for our kids, and that saddens me.

You continue to look for spin and distortion in what I post. All I can say is that I continue to seek for the truth and try to help others to see it. If we can't look honestly at the problems, we have no hope of fixing them. I am more than happy to share what I have discovered if you are open to it. You know how to find me if you care.


Posted by Phil, a resident of Another Pleasanton neighborhood
on Dec 18, 2010 at 10:18 am

More money out the door than comes in. Raise taxes. Simple stuff.


Posted by Irene, a resident of Bonde Ranch
on Dec 18, 2010 at 11:43 am

Phil,

In your opinion what percent should a person pay in income taxes who makes $500,000 per year? 25%, 35%, 45%, 55%, 65%, 75%, 90%???


Posted by Bart Hughes, a resident of Another Pleasanton neighborhood
on Dec 18, 2010 at 2:09 pm

I guess this is where we fundamentally disagree. Why give more money to a system that is fundamentally inefficient? Why not hold government to the same standard of private industry to learn to do things "better, faster and cheaper".

The more efficient government is, the stronger economic environment we have and the greater the benefit there is to all citizens. I'll take a New Zealand, Singapore, US any day over more socialist states like Venezuela.

Now I agree with have a huge wealth disparity issue in this country, but bigger inefficient government is not the answer for this.


Posted by IF only, a resident of Another Pleasanton neighborhood
on Dec 19, 2010 at 7:55 pm

So, Pleasanton received a giant federal "stimulus" to stimulate the economy. BUT, our politicians didn't use it for our schools negating the need for a parcel tax, or anything else for the city. No, they used it to pay into our public employees retirement fund, which they should be paying themselves ! But, here is fat city, we pay it FOR them !! The kicker is, that means the 'stimulus' never got to Main street America !. That's why public unions have fat retirements GIVEN to them, and average joe is UNemployed. Let's see, CA is still 12.5% AFTER stimulus is blown. (that's cause it was misdirected). it's just hit after hit to us...........


Posted by t-time, a resident of Another Pleasanton neighborhood
on Dec 20, 2010 at 1:58 pm

Heard enough talk? I have. If the city will not restore fiscal sanity, WE must!

We must be preparing for the worst now. Mr. Hughes has clearly laid out the facts. The city will reveal their hand on December 31st when the new contract is revealed. Will they take serious action, or play in the margins?

We're organizing NOW in preparation.

To keep getting the facts, please sent Mr. Hughes your contact info ptownreform@gmail.com.

He's the messenger, but who's ready for action?

If you want to organize and make sure the city hears OUR concern that this is a serious issue that must be addressed, come join us here: Web Link


Posted by two cents, a resident of Another Pleasanton neighborhood
on Dec 27, 2010 at 12:49 pm

For anyone still following this one. Earlier I posted what was happening at my brother's company:

"My brother works for a company with union employees (not in CA). They are voting this week on whether they will accept a new contract with reduced health and pension benefits and significantly reduced pay (and they have no way close to public sector benefits).

The alternative is that they will have to shut down the entire operation in the state they are in as it will not be profitable, particularly compared to where they operate overseas. This is the reality for the private sector."

Anyhow, spoke to my brother over Christmas and they have voted. The conclusion is that the union (this is a private sector company) voted for lower pension and health benefits and a two tier systems where new employees start on a 35% lower wage. This will enable the company to stay open in the town where they work rather than relocate abroad and everyone lose their job here. This is the real world everyone, like it or not.

How do you think these employees are going to feel about bailing out CA's public sector pensions because we can't deal with our spending problem? Or how do you think people like them here would feel about a tax rise to make sure that we can pay out millionaire public sector pensions, pay rises and benefits at early retirement ages?


Posted by Bill F, a resident of Downtown
on Jan 14, 2011 at 5:10 pm

The solution is simple. Vote NO on any bond issues, parcel taxes, etc., no matter what the proponents say about the need, the impact, etc. Vote FOR people like Bart Hughes and vote OUT the liberals like Jennifer and Cheryl. It may be too late, but the solution is simple.

Bill


If you were a member and logged in you could track comments from this story.

Post a comment

Posting an item on Town Square is simple and requires no registration. Just complete this form and hit "submit" and your topic will appear online. Please be respectful and truthful in your postings so Town Square will continue to be a thoughtful gathering place for sharing community information and opinion. All postings are subject to our TERMS OF USE, and may be deleted if deemed inappropriate by our staff.

We prefer that you use your real name, but you may use any "member" name you wish.

Name: *

Select your neighborhood or school community: *

Comment: *

Verification code: *
Enter the verification code exactly as shown, using capital and lowercase letters, in the multi-colored box.

*Required Fields

Jim Kohnen Post Office Signed into Law
By Roz Rogoff | 5 comments | 797 views

CPRA: Balancing privacy, public's right to know
By Gina Channell-Allen | 3 comments | 427 views