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Fiscal sanity spreads to Palo Alto

Original post made by Trending toward responsible on Jul 27, 2011

"Palo Alto's largest union agrees to pay freeze
City Council extends its contract with the SEIU; agreement includes salary freezes, two-tiered pension system (and more)

With fiscal deficits looming on Palo Alto's horizon, pay freezes have become the new normal for the city's largest workers union…

The council and the union clashed over the benefit reductions in 2009, at which time the union staged a one-day strike (members called it a "self-imposed furlough") and a protest at City Hall. In October 2009, after negotiations between management and the union had hit an impasse, the council imposed the new conditions on SEIU members."

"SEIU agreed on a contract last year and in May the union voted to ratify a one-year extension of the contract. The new agreement includes a pay freeze; an employee contribution of 5.75 percent toward pensions; a second tier for pension calculations that would be applied to new employees; elimination of two floating holidays; elimination of tuition reimbursement and a requirement for employees to pitch in for their medical costs…

Meanwhile, the city continues to square off with its main firefighters union. The two sides began their contract negotiations in May 2010 and could not reach an agreement. The dispute is scheduled to go to arbitration this fall. The council also agreed last week to place on the November ballot a measure that would eliminate binding-arbitration from the City Charter.

Palo Alto officials are expecting budget deficits of close to $7 million in each of the next two fiscal years, largely because of sharp increases in pension and health-care costs. The city's current budget, which the council approved last month, assumes $4.3 million in concessions from the police and firefighter unions."

Web Link

Comments (19)

Posted by Good for PA, a resident of Another Pleasanton neighborhood
on Jul 27, 2011 at 10:47 pm

Pleasant Hill imposes contract

"PLEASANT HILL -- An impasse at the bargaining table led the City Council on Monday to impose a one-year contract on police officers and dispatchers, freezing salaries, cutting current employees' benefits and setting up a two-tier system of less generous benefits for future workers.

Councilman Michael Harris cast the only no vote, saying he thought the action would hurt morale and might drive out veteran officers. He suggested negotiating a few weeks past the July 31 contract expiration.

The rest of the council said falling sales tax revenue and spiraling health care and retirement costs have made the existing benefits structure unsustainable."


Posted by GX, a resident of Another Pleasanton neighborhood
on Jul 28, 2011 at 7:03 am

Negotiations are currently underway with Pleasanton's police department and soon the discussion will start with our fire department. Personnel costs have swamped Pleasanton's budget these past eight years and take up a large majority of our general fund. This is one of the reasons why the city has been so slow to move on capital projects like the new library and sports parks.

If you care about the future of Pleasanton, get involved and let the City Council know how you feel. They need your support to stand up for what is right for Pleasanton residents.


Posted by Arvin, a resident of Bordeaux Estates
on Jul 28, 2011 at 7:54 am

Hey Honey! I've just had my fire fighter's salary frozen for the next three years, and they're talking about imposing unpaid furlough days as well. Let's go out and buy a new car!

Aw, Sugarplums, I just had my teacher's salary cut by ten percent, too. I thought maybe we could take the tax savings this will mean for us and we could take an expensive vacation that would help stimulate the economy. Facing all these cuts, I'm just motivated to go out and buy, buy, buy!


Posted by Dartmouth Attendee, a resident of Birdland
on Jul 28, 2011 at 8:28 am

Arvin is 100% right. Banks won't lend to start-up businesses because consumers aren't buying. Investors won't invest in existing businesses because consumers aren't buying. Solution? Cut salaries of public sector workers in order to make them buy more.

This will stimulate the economy, though we must be alert to inflashion. Its hippocritical for us to suffer inflashion and not make teachers suffer for our sins.


Posted by steve, a resident of Parkside
on Jul 28, 2011 at 9:13 am

In the words of the messiah obama, 'we all have to share the burden of the slowdown in our economy'.


Posted by P-number one, a resident of Another Pleasanton neighborhood
on Jul 28, 2011 at 11:23 am

Fremont faces high pension costs
The state pension system is charging Fremont among the highest rates in Alameda County for its public safety pensions -- a key factor in the city's budget shortfalls and continuing labor unrest… the city seeks up to $5.2 million in concessions this year".

"Fremont's fastest-growing expense this year was contributions to the state pension system, which added $3.5 million to the city's budget gap. Pension rates have soared during the past decade because of more generous retirement benefits and stock market losses by the pension system.

For every police officer and firefighter, the city must pay an additional 36.53 percent on top of their salaries to the state pension system to fully fund their pensions. The employees contribute a separate 9 percent share of their salaries.

The only jurisdiction in Alameda County that was charged more by the pension system for active public safety workers was Berkeley, which paid 40.37 percent of salaries to fund police pensions."

" Overall in Alameda County, jurisdictions are charged on average 26.13 percent of salaries to fund public safety pensions…

Some cities pay more
Although Fremont has among the highest pension contribution rates, several cities pay more to fund public safety pensions because, unlike Fremont, they also pay the 9 percent of salaries that the pension system assumes is being paid by employees.

Pleasanton is charged 33.35 percent of police salaries to fund officer pensions, but it also has agreed to pay the employees' 9 percent share, so it is actually paying more than 42 percent"

More here: Web Link


Posted by Bloom, a resident of Stoneridge Orchards
on Jul 28, 2011 at 11:33 am

What about the 51.34 overhead costs, and the remedial sustainability factor of 12.42%? Something is truly stinky here.


Posted by Mike, a resident of Highland Oaks
on Jul 28, 2011 at 3:23 pm

Police and fire services are very similar to the military, and the individuals who serve in these very important jobs should be paid accordingly; that is, what we can afford.

If we bankrupt the system, no one gets paid.

Here is a thought: why not discuss the advantages and disadvantages of establishing a voluntary fire department?


Posted by Interesting, a resident of Another Pleasanton neighborhood
on Jul 28, 2011 at 3:27 pm

Isn't it interesting when some people run out of defensible logic for their position, resort to name calling or gibberish like the post just above this one? LOL


Posted by Interesting, a resident of Another Pleasanton neighborhood
on Jul 28, 2011 at 3:28 pm

Was referring to Bloom post


Posted by Interesting, a resident of Another Pleasanton neighborhood
on Jul 28, 2011 at 3:39 pm

Serving in the active military these days is far more dangerous than being either a policeman or fireman in Pleasanton. So why is that police/fire make so much more and have far superior pensions?


Posted by taxpayer, a resident of Downtown
on Jul 28, 2011 at 7:19 pm

Everyone seems to think that most of us want to drastically cut police and firefighter pay. I, for one, do not. However, I do want to s**tcan the outrageous 3% at 50 retirement system. They should be paid for their WORK, not paid even more when they retire at age 50.
They should all contribute at least half of the annual cost to fund their pensions. Better yet, make all of the pensions defined contribution. You want money when you retire, YOU put money into the fund.
These people retire at age 50 making as much, or more, than when they worked. The taxpayers pay that pension. The retirees take other often full time jobs and continue to get 100% of their pensions. Any salaries earned after retirement need to offset, dollar for dollar, the pension money.
Sure, pay them a fair wage for what they do. But stop the bloodletting with those unjustified pensions.


Posted by Jerry Brown and the dems, a resident of Another Pleasanton neighborhood
on Jul 28, 2011 at 7:35 pm

It is amazing to watch this happening in our state, counties, and cities. We are close to absolutely collapsing and imploding and no one in Sacramento wants to take action. Maybe the plan is to let it collapse and all of those on pensions already retired lose it all or a major portion of it and those still working get their plans reworked big time. Sad but reality. Another company, Toyota, is shutting down its sales and marketing operation in southern california and moving it to Erlanger, Kentucky. Reason cited? Unfriendly environment in California towards business.


Posted by Big Pensions in CA, a resident of Another Pleasanton neighborhood
on Jul 29, 2011 at 7:23 pm

Manhattan Moment: Public-sector pensions are anything but modest


"Recent polls show that public opinion is turning against government workers because of their rich pay and benefits -- especially pension benefits.

A spring poll conducted by the Los Angeles Times and the University of Southern California, to take one example, found that 70 percent of Californians favored a cap on public employees' pensions because of the widespread perception that pension costs have become a crushing burden to state and local governments.

Unions have counterattacked by claiming that government pensions are actually quite modest. They argue, for instance, that the average annual pension of a state worker is under $30,000 in California and even less in New Jersey and New York. But their figures are misleading to say the least.

Consider California. Earlier this year, state Treasurer Bill Lockyer, a Democrat who has received union backing in his political campaigns, claimed that the average retired state worker in California was getting just $2,500 a month in benefits.

When Contra Costa Times columnist Daniel Borenstein investigated, he found that Lockyer's average included people who had worked for the state for as little as five years and were collecting partial benefits, as well as those who had retired years before the state significantly enhanced pension benefits in 1999.

But if you limit the average to currently retiring workers who have spent more time working for California and thus can retire with full benefits, a different picture emerges, Borenstein found. The average state worker retiring in 2009 with full benefits received a pension of nearly $67,000 a year.

Local government workers in California did even better. Looking at his own town, Contra Costa, Borenstein found an average pension for new retirees of $85,500 annually.

There's more:…."


Read more at the Washington Examiner: Web Link


Posted by Tea Party Vixen, a resident of Deer Oaks/Twelve Oaks
on Jul 29, 2011 at 11:55 pm

I guess folks are expected to see pensions as something other than deferred salary. You see, salary is salary and pensions are pensions. They're both "gained" from someone doing their job, but salaries are salaries and pensions are pensions for gosh sakes. How can I be allowed to criticize pensions when stupid fools want to claim their just extended salaries. Morans!


Posted by JUSTIFY THIS, a resident of Another Pleasanton neighborhood
on Aug 1, 2011 at 4:47 pm

"Pleasanton is charged 33.35 percent of police salaries to fund officer pensions, but it also has agreed to pay the employees' 9 percent share, so it is actually paying more than 42 percent""

How does that compare to a 401K with a 3% employer match? I'm sorry but that is ridiculous. The standard 3@50 plan requires the city to pay 16% of payroll and the employee to contribute 9%, for a total of 25% of payroll.

How is that the tax payers are now being asked to contribute 42% of payroll toward these pensions when the initial cost was 16%?, and the 16% sounds like an incredible deal to begin with.


Posted by curious, a resident of Amador Estates
on Aug 1, 2011 at 8:46 pm

If it only costs 16% then how do you come up with this 42% pension number?


Posted by Independent, a resident of Another Pleasanton neighborhood
on Aug 2, 2011 at 6:54 am

16% was the original plan (meant to match the private sector). 42% is the actual number today after the dramatic increase in pension benefits. And BTW, this doesn't include the addition funds the city had to put away for a side-loan that benefits the police department.


Posted by Public Worker, a resident of another community
on Aug 2, 2011 at 7:56 am

So, when you say my pension is too big, you're saying I make too much at my job? I wonder what YOU do? Yeah? Pour another one. What a laugh.


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