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Emotions ran high Tuesday night at a four-hour-long public workshop on city pension reforms hosted by the Pleasanton City Council.
In their packed council chambers in the Civic Center, council members weighed comments from 26 speakers who spoke following a one-hour presentation on city finances by Emily Wagner, the city’s Finance Director.
The public forum was triggered after Pleasanton businessman Bart Hughes, former City Councilwoman Kay Ayala and David Smith objected to a two-year contract that had been negotiated by the city and between the city and the Pleasanton City Employees Association (PCEA), a union that represents 227 members.
Some speakers, with tears in their eyes, talked about their years of dedicated service as city employees working at the library, City Hall and other non-management jobs.
Represented by Brenda Wood, the business agent for the union, they said they had agreed to pay freezes over the last two years, a freeze that would be continued in the new contract with 2% of their pay to now be taken out to pay their costs of health and pension benefits. Since 2002, those benefits have been paid entirely by the city.
Other speakers talked about their frustrations and even anger over contracts negotiated with both the employees union and unions representing firefighters and police that failed to address unfunded pension liabilities for those employees, which they said now total $290 million and are growing.
“Everyone agrees that Pleasanton is in financial difficulty,” Hughes said. “This is not about the employees. This is a wonderful city. But these days, private citizens are finding that their incomes are not going up. Expenses are going up and inflation is going to take off again. We need to fix this (pension) liability.”
Hughes and his coalition urged the council to scuttle the employee union contract that was negotiated last November with a 2% contribution toward pensions and negotiate a new one that would at least provide a 4% contribution, or even more.
Last month, City Manager Nelson Fialho voluntarily agreed in a new contract to contribute 8% toward his pension. He also won an agreement from department managers to start contributing 4%. A new contract recently signed with the firefighters’ union also has them contributing 2% towards pension benefits. A new contract with the police union is scheduled to be negotiated in a few months.
In her presentation, Wagner said the $290 million unfunded pension liability actually has been reduced by cost-cutting measures and other adjustments with the liability closer to $121 million. She agreed that’s still a big number but with unrestricted net assets of $171 million, the pension fund liability is manageable as the city continues working with employees groups to pick up more of the costs.
She pointed to a slight rise in sales tax revenue in 2010 and more growth expected this year, with Mayor Jennifer Hosterman pointing out that Pleasanton residents have the highest income level for any city itsd size in the country.
“Our current bond rating is AA+, the highest rating for cities in California,” Wagner said.
The City Council will review last night’s comments and plans to vote on the proposed city employee contract at its meeting Feb. 15.
This City Council is spineless, they will rubber stamp it after having given the appearance of listening to those who are stuck paying the bills. City employees have enjoyed over 40% in raises while the rest of us suffered pay cuts, pension losses and job losses. They have been spared any pain from the recession and now they “tearfully” plead with us to continue to finance their age 55 retirement and free medical benefits. Bull *&%$ ! Enough is enough, get some guts Council and renegotiate this obscene contract.
2% at age 65 with the full 8% contributed by the employees. They enjoyed the benefits of wage increases when they should have been taking cuts like everyone else.
if you had half a brain you’d realize how contracts work. in 2002 when that contract was signed, the economy was booming. their contract was based on that economy. the previous contract was based on a somewhat depressed economy so when it started to turn around in 2000 and you were getting your 5 figure bonuses, raises far above COLA, and 30-40% returns on your 401k’s the city employees were stuck with the contract they signed in the depressed economy.
there is a lag time built into the contract process with respect to economic performance. so the contract the city and PCEA have agreed to in this horrible economy will still be with the workers when the economy recovers and you get your stock options back…
“there is a lag time built into the contract process with respect to economic performance. so the contract the city and PCEA have agreed to in this horrible economy will still be with the workers when the economy recovers and you get your stock options back…”
And what if the economy doesn’t recover as you expect? What if we’re still drowning in debt? QE2 is putting us further in debt and is only working to inflate the stock market – what happens when it runs out in June? Are these contracts preparing us for that? CA isn’t looking too healthy right now, these contracts should reflect this reality, not one you hope for in the future.
I hear a lot of people talking about working “collectively” and “in collaboration” with city employees to address this issue. However, what that seems to mean to most of you is working together to see how much we just how much we can cut city salaries and benefits. I have not read or heard one single comment truthfully stating that we, as “tax-paying citizens” have actually seen TAX CUTS over the last three years as a result of reduced home values and property taxes. So, while WE are enjoying paying less, we expect city employees to take a 8% pay cut to address the issue??? That is not working collaboratively. Like most residents, I have a little extra money. UNLIKE most residents, I’d be happy to pay a little more to maintain our city services and quality of life. Anyone who talks about collaboration and isn’t willing to actually contribute a little bit is a complete and total hypocrite.
I see both sides of this issue. Employees negotiated these benefits over time, but some reasonable changes need to be made. The City did not make a mistake in 2001, they acted responsibly to remain competitive and take advantage of NO-COST enhancements to the pension system at that time. Calling this a mistake is false propaganda and Monday-morning quarterbacking in its purest form. I, for one, trust our City Manager, Finance Director, and City Council to take care of business the way they always have. Our City is in fantastic financial shape because of their competence, so to question their judgment today is simply an emotional reaction to some misstated and miscalculated information. Let our City employees do their job. The employees are willing to give something back and the City believes it is enough given the current situation, so who are we to judge differently?
“In her presentation, Wagner said the $290 million unfunded pension liability actually has been reduced by cost-cutting measures and other adjustments with the liability closer to $121 million.”
No, she didn’t say that. This statement reveals the lack of understanding of this complex issue on the author’s part. She said the liability is “somewhere between” $290MM and $183MM.
What she also said, and what is not in this article, is that the unfunded liability should be around 80% of total and we’re below 80% and that the warning signs are there, they have been for years, and that we will get further below 80% if there is no action taken.
I could not believe that the city did not do a comparative study of the other listed survey cities that are in the MOU and give that to the council. During negotiation, you always want to know what your comparative cities are doing. Not just in good times but in all times. As a speaker said, the comparative cities, which are listed in the current MOU and put there by the union, have reduced benefits and gone to 2-tier. How the council can do any bargaining with that info amazes me..
And did you hear the comment from the mayor at the end. She said she promised the union person that she would get a 5-0 vote on the tentative agreement! This workshop was intended for the residents to speak but the council already made up their mind and was not listening. It was an illusion of an open process. Shame on them!
Stacey, you are right on the liability. I hope the editor fixes this article, especially before putting it to printed copy.
City employees engage in a contract with the CITY, not the citizen’s. Just as in the private sector, employees engage in contracts with their employer… not the employees of the company. Should we hold “workshops” for those in the private sector and discuss their pay and benefits. According to Bart Hughes, everyone else is suffering so why shouldn’t city employees? Mr. Hughes and his band of merry men are less than 1% of the city population! Why doesn’t he and his followers contribute to the city in a positive manner?
The city has been working on cost-cutting measures over the past few years. However, it is not good enough for some “citizens” who by the way are also tax paying citizen’s. In the past, if the city employees withheld pay raises with the agreement for the city to pay the full 8%, should we now ask the city to give pay raises in agreement for city employees to contribute? That would be fair right? Not according to Mr. Hughes… he wants a straight pay-cut!
Actually, that is not what I said. Feel free to reference the recording to confirm.
I’ve never asked for an 8% contribution rate this year as it would be too unreasonable and create too much hardship. I am not trying to make employees suffer because others are suffering in this economy. These are all words people have put in my mouth to try to undermine me as a messanger.
Like it or not, retirement costs are exploding and are putting significant strain on the city (and it is even worse at the county and state levels).
What I said is that every extra dollar that taxpayers are required to pay is coming out of a decreasing income stream. My taxes like so many others’ have actually gone up (property tax, state tax, sales tax …). Rather than assuming goverment can continually tap into a tax revenue stream, it is time to look at other options.
Please remember that most employees were hired before this pension bump. So the significant increase was not required to attract them. This group of employees will get a much richer retirement than their predecessors and those that come after them (the two-tier pension is inevitable), so why shouldn’t they contribute to fix the problem? If increasing their contribution rates would create too much hardship, let’s explore relaxing the pension formula either in terms of the retirement age or percentage.
Lastly, I’m not part of a small minority that is concerned about this issue. 9 out of 10 pension reform initiatives passed in bay area elections last year. Also, check out the Tri Valley Herald poll:
http://www.insidebayarea.com/opinion
Mr. Hughes,
Point well taken… it does make some sense. However, if I remember correctly, at the time of the contracts they were approved to stay current with other cities and attract new employees. If Pleasanton did not offer 3% at 50 or 2.7% at 55, then potential employees would look elsewhere for job opportunities that did offer these incentives.
Unfortunately, in the world of business, as you well know, there are many variables. One variable is that of hiring and retention of employees. Yes, the financial aspect is important also but cities offering a substantially lower pay and benefit will get what they pay for. I am pretty sure during the meeting it was stated several times that there was “No tax increase” for residents. Not to mention, city employees also pay taxes.
Here is a challenge – So far all we have seen is you ability to quote newspaper articles (And we all know the news is valid information), create unfounded statistics for the city, and speak on an emotional basis. As a “Business” yourself, provide some proof and facts of your own business and how you are contributing to the cost-savings in the economy. Do you in fact own a company? Do you have a company profile detailing your plan of action for a sustainable outcome? If so, how effective has your company grown in today’s economy?
I could sell hotdogs from a cart on the side of the road and call myself a businessman. However, it does not give me the expertise to manage a city budget.
“Should we hold “workshops” for those in the private sector and discuss their pay and benefits.”
Absolutely — if you paid my wages and benefits! We are paying the cost for these salaries and benefits and we have every right to demand that those costs be brought into line.
Most of us have never seen huge bonuses and the fact that my 401k has increased is my own business as that is my money, not money that YOU will be expected to pay me for life.
The employees need to give back the excessive amounts of pay and benefit increases they enjoyed for the past years. How about if we negotiate a contract with no increases and the full 8% contribution and make that contract last for 8 years. Won’t they start screaming if the economy takes off and they are stuck with no raises? Well, they sure were not in any hurry to give anything back when the economy went south and they had their 40% raises.
FactFinder makes an excellent point and proves that any reform must occur at the state level, not the local level. If we lower our benefits such that are not competitive with other communities, we will only screw ourselves. I ask that Bart focus his activity at the state level.
I guess conservatives in this community have nothing better to do than attack the pensions of middle class workers. Of course, Ayala will never pass up a chance at political opportunism or finding the latest hot button issue to divide this community. She still has sour grapes because she and her cronies can’t get elected to the city council, so they just throw a monkey-wrench into council decisions out of pure spite. People like Ayala and Hughes are motivated by resentment, not the best interests of our community.
Thank you Bart Hughes for standing up for us middle class taxpayers once again. Thank you to the city council for listening. I hope progress can be made on this difficult issue.
FactFinder – Why is it so difficult for some people to acknowledge an obvious and known issue without attacking the messenger? To say the least, this has been a very interesting process for me. I care deeply about this town and am concerned about a financial issue that left unchecked will continue to drain away services (and yes I do consider lower service levels a “tax”). Rather than sit there and complain, I decided to do something about it.
Why do I need to justify and prove myself to you? It is really going to change your opinion on what I am trying expose? While I have in the past run organization similar in size to the city of Pleasanton, I don’t claim to be an expert with city government.
But it doesn’t take much background to be able to see when a particular budget line item is growing at an unsustainable rate. Remember, every single elected representative and city manager acknowledged last night that we have an issue with retirement costs that must be adress. Every single one.
Let’s focus on solving the problem rather than trying to tear down messengers like me. In the long run, we will all be better off.
Bart,
Thanks for taking the time to comment on here, but aren’t you late for your Tea Party Express meeting?
Resident of another community!
Just as Mr. Hughes, you speak on emotion. In a way, society does pay your salary and benefits. You work for a company correct? Or maybe have your own business? Well, if society decides your company’s products and services are no longer needed or adequate… guess what? You lose a job! Business is business and in one way or another we all pay for the economy supporting each other.
The problem I see from so many commentors is that they honestly believe that “They” are the defining line in a city workers life. Acting as if city employees are slaves to their money they spend to live in a city. Bad news, that is not the case. Yes, we do pay taxes, which in turn “supports” our employees, but I do not see any of you cutting a monthly paycheck to the employees. Nor do I see you cutting a monthly paycheck to the city for their services they provide. More bad news, no matter where you live, you will pay taxes that will support your local employees.
Another point of information… the majority of companies offer benefits for employees. Some better than others. Furthermore, many companies also offer retirement plans. Beyond that, ANYONE can contribute to their own personal retirement fund outside of a company. It is sad that citizen’s would assume they are paying the full ride for city employees retirement. I happen to know for a fact, many city employees also pay into their own retirement plans that also flucuate with the economy.
Sal, I hope this does go to a citizen vote. Then you will see how much bigger this whole thing is than a tea party issue.
Mr. Hughes,
Attacking the messenger? Here is the reality… when you put yourself on stage for the lights to shine on, expect to have feedback (positive and negative). If you stand up in front of an audience, you will be judged and questioned. That, Mr. Hughes, is fact! Ask any politician.
Now, you ask, why must you prove yourself to me? And would it change my opinion?
1. You are proving yourself to entire city… not just me. If you speak on topics as if you have the answer; be able to provide proof that your plan works.
2. Any good leader knows that to change to minds of people you must be able to influence them. Not to do what you want because you say so, but because you make valid sense.
Now, you state that “in the past you ran organizations.” To me, that says your organizations have failed. So, why would I trust someone who has failed at running organizations or businesses? The city has not failed. In fact, while acknowledging there is a potential problem, they also insist Pleasanton is doing well above other cities. So who do I believe and trust?
If you were Bill Gates or Donald Trump standing in front of me giving me a lecture on how to succeed and sustain in this economy, well then maybe I would listen.
“I could not believe that the city did not do a comparative study of the other listed survey cities that are in the MOU and give that to the council. During negotiation, you always want to know what your comparative cities are doing. Not just in good times but in all times. As a speaker said, the comparative cities, which are listed in the current MOU and put there by the union, have reduced benefits and gone to 2-tier. How the council can do any bargaining with that info amazes me..”
I was floored by that revelation and I do not accept the City Managers argument that it wasn’t necessary when asking for concessions. Considering it has been over eight years since the last survey and many cities have been seeking concessions over the past few years while Pleasanton employees have been receiving raises, it strikes me as very odd. To put things in context, Nelson is saving 20K-30K while recommending a contract worth 65 million plus over the next two years. I’d bet the unions conducted their own salary survey before negotiations started, and the information from their survey probably has much to do with the big push to get this contract approved.
It was nice to hear the comments from our elected officials that they set the perimeters for the negotiations. What wasn’t mentioned is what amount of input comes from the City Manager and Finance Director, if any. Does this mean city management should be immune from criticism because they are working at the direction of Council? Or does this just mean that city management’s role in setting the parameters for negotiations needs to be expanded. Either way, as one woman described it last night, maybe the taxpayers need their own negotiator to avoid the conflicts of interest that seem to be inherent in the relationship between elected officials that are also union members, elected officials whose campaigns are funded and endorsed by unions, and city management that are friends and lunch pals with the same people they are negotiating with.
Regarding Nelson’s comments that Pleasanton isn’t Vallejo, I agree with him that Vallejo’s unions took control of the city by negotiating contracts that tied the hands of city management. They were able to accomplish this in a couple different ways. First, they were able to greatly influence the city council by interviewing potential candidates and then selecting, endorsing, funding, and campaigning for those candidates that supported their agenda. Secondly, they were able to use their influence to assist “their” city council candidates in setting the parameters for contract negotiations, and ultimately get approval of those contracts that helped frame – even in the face of adamant objections from the taxpayers that said “this is a mistake – it is unsustainable“. If a city manager protested they were removed; Vallejo went through 9 City managers in a span of 11 years.
The control Nelson speaks of ultimately led to the unions planned outcome; rapidly increasing wages and increased and retroactive pension benefits. So, while Pleasanton may have maintained management rights with regard to staffing levels, and the fact that Vallejo couldn’t even reduce staffing with out approval from the unions is what ultimately drove them into bankruptcy, there isn’t all that much difference between Vallejo’s and Pleasanton’s management decisions.
The biggest difference between Pleasanton and Vallejo, in terms of management decisions, is that Pleasanton has more money to help cover up the mistakes made by management and council.
I am an independent and not a member of any political party including the Tea Party grass roots effort.
Here is an interesting perspective from someone who can truly say they sit in the middle. With all this talk about civility in public discourse, I have observed and experienced much more incivility and denegration from the left than the right. Food for thought …
Again, and I am trying to do is solve an obvious problem here. Nothing more and nothing less.
In other words, FactFinder claims to not be interested in making decisions on facts, but the person speaking them. When all leaders and experts across the country have been calling for pension reform, when CalPERS actuaries are saying the system is unsustainable, is FactFinder listening to them? It appears not.
No Stacey, you are incorrect. I am asking that if you are going to bring a problem to the table have factual information to prove why your solution works. Yes, experts have been calling for pension reform, but as a citizen who wants to jump on the bandwagon and agree… provide a sustainable plan of action or leave it to our experts within the city to determine the best route to go.
If you have experience in running organizations that have failed… you provide no “Facts” or “Proof” that your ideas or plans work. Therefore, you are not credible! Relying only on what you read in the newspaper or on television is not proving you have any facts.
Hence the reason I am not standing in Mr. Hughes corner nor am I suggesting any pension reforms because I lack the facts. However, I trust those who do run our city to make the best informed decision… maybe you should too.
How can the Council make the best informed decision with NO comparative survey?
As for bringing the problem to the table, it was clear from the workshop last night that Mr. Hughes did not bring this problem to the table. The City has known about this problem since roughly 2004.
FactFinder said:
“Point well taken… it does make some sense. However, if I remember correctly, at the time of the contracts they were approved to stay current with other cities and attract new employees. If Pleasanton did not offer 3% at 50 or 2.7% at 55, then potential employees would look elsewhere for job opportunities that did offer these incentives.”
Fact Finder, while I adamantly disagree with your contention that pension benefits needed to be increased to attract employees.
First, I’ll get this off my chest, if there are people leaving city employment that isn’t a reason to increase pension benefits – especially not retroactively. That does ZERO to retain employees and only provides incentives for more to leave because they can now afford to retire earlier; increasing pension & unfunded healthcare liability. A certain amount of turnover is considered healthy. I doubt the amount of employee turnover equaled that of the private sector, and I suspect the claim had more to do with justification for the ENORMOUS contract that was being considered in 2002.
There are others ways to retain employees besides increasing pensions: increased wages, sign-on bonuses, pizza on Thursdays. Maybe some employees weren’t happy with the union structure, or their boss. These things can be addressed to increase job satisfaction. You can also increase recruiting efforts. I think there are still a lot of people that don’t understand the true value of the employee contracts, including some employees, so if a recruiter were to accurately articulate the wages, benefits, and pension contributions I find it difficult to believe that recruiting would be an issue. Increasing pensions benefits is probably the worst way to increase retention, or compensation, because it puts taxpayers and the city finances at risk by placing them in the pension guarantee business, and that has led to the unfunded pension liability disaster that nobody, including the employees, wants to be stuck paying. And, as I have been told, as soon as you hire someone at these increased benefit levels you are tied to that deal for the duration of the public employee’s career – although I still don’t buy into that claim.
What people need to stop arguing about is the differences between “city employees” and the “private sector.” Listen, I apologize that while some decided to make a career in the private sector hoping to make millions of dollars whereas others chose a career path that provided a stable source of income and retirement. Yes, while you private sector folks who live in multi-million dollar homes overlooking the peasants or “peons” of Pleasanton’s city workers now are feeling the full effect of the economy. Sorry! If you really think about it, even if city employees take a pay reduction and pay into their retirement funds, the citizen’s will still be paying the same amount of money to the city and the employees will still retire at the same age and with the same amount of money.
Basically what you citizens are asking is that city employees should have salaries that fluctuate with the economy. Well, city employees do not work on commission…
Yes, let us hold a public auction and determine the fate of city employees.
It is clear that Bart is looking after the best interest of the city in the long term and that the people that are responding to him on this thread with insults are personally vested in the process. It is clear that they don’t see that this liability is not sustainable and will lead to reduced services which means less tenured people getting let go to pay for the pension obligations of those that have retired.
That is clear. If all of the Pleasanton City Workers really cared about the city and other city employees they would see that making smaller concessions would be best for the city as a whole and all of the city workers. But they only see things from their own myopic perspective and lash out at others personally to try and have the discussion focused on other topics.
There is a problem and the answers to the problem are not personal attacks on the messenger or stating there is a problem but burring your head in the sand. The answer is what Bart is doing by trying to shed light on the topic to find a suitable answer. A 4% contribution is a great step for year 1.
THANK YOU BART!
And John,
A 4% contribution to the city you call home and love is also a great start.
Since one cannot recreate the past, what future plans are being made with new hires? What is proposed in regard to retirement benefits for the future employees? Should employees be given defined benefit or defined contribution retirement plans?
What we all have learned though, when something cannot be sustained you do something else. Is bankruptcy at the city level an answer to unsustainable payouts or do you saddle future citizens with retirement payments at the expense of everyday city services?
First, shame on Jeb. In paragraphs 2 and 7 the error of 2 year “contract negotiated” was made. My copy from the clerk has printed ” TENATIVE contract”. My old copy of Webster defines tenative…adj. experimental, noun trial. So, it can be called a trail or experimental, but it is not yet a contract.
We were led to believe that the workshop was the transparent participation for Pleasantonians….NOT a meeting after the fact. If it was not particicpation in ‘process’, then it was all a farce, which council will have to address.
“Yes, while you private sector folks who live in multi-million dollar homes overlooking the peasants”
You know what Randy, there are plenty of private sector workers who are no where close to this kind of income or lifestyle. Who make less in salary than many public sector workers, and obviously not the benefits. Get real.
The very first comment above, by resident, tells the whole story…. better than anything above or below his/her comment. Courage and objectivity is desperately needed…It is tragic that so little objectivity was displayed and the most transparent part of the workshop was the mayor’s devotion to all union participants. Clearly no interest, concern, or responsibility to the 70 residents of Pleasanton….whom she does OWE a responsibilitiy to. She kept repeating that her responsibility was to the unions.
The union plants thruout the audience and all the drama of the tearful females speakers who totally lacked an understanding of financial reality around them. And, have you ever seen so many assorted union association group leaders. It is plain to see how so much is lost in translation thru all the levels….full of scare tactics….such theatrics. Sadly, so many believe the distortions they’re told.
Back to resident’s opening comment. It is disingenuous of members attempting ‘personal stories’…they still have their jobs ! They still have pensions…and largely not paid by themselves! They still have medical. Did we ever hear them say how grateful they were for be given a decade of excessess, which they have enjoyed, spent, or still have, and they do not have to live off those excessess in any current “unemployed’ period. They should consider themselves lucky. Now back getting closer to the reality of the world around them… None of that really matters anyway. ALL that matters are the numbers in Emily’s great report and how to cover the gaps.
US standards today are, employees contribute to savings or 401Ks IF employer has one. Sadly, most of us are not allowed to opt out of the mandatory theft called social secutity (no pensions to will to our loved ones). I used to pay in 1,000s a month, but I now get $960.mo….from which I have to pay my property taxes.
Obviously, P-town is 70,000 residents !
I don’t know why these same union people keep posting to attack Bart and saying he makes up data. The data he is using came from the City. It is part of the annual reports and the pension liability comes from a presentation the city management made to the chamber of commerce a few weeks ago. I guess these union people are saying that the City Manager is lying.
Same old story, if you have nothing constructive to say about the message, shoot the messenger.
Randy, we have many city employees retiring from our city making multi-millions of dollars.
Our last city attorney. He retired at age 55 and has a retirement pay of $161340/year and full medical insurance which right now is around $13000/year. If he lives to be age 80, he will collect over $4,000,000 in retirement pay and $330,000 in health insurance plus cost of living adjustments and health insurance no matter what the cost to the city is.
Our last director of engineering retired at age 55 and has a retirement pay of $152,348/year and full medical insurance. If he lives to be age 80 he will collect over $3,800,000 in retirement pay and $330,00 in heal insurance plus cost of living adjustments and health insurance no matter what the cost to the city is.
Our last director of planning retired at age 55 and has a retirement pay of $131,388/year and full medical insurance. If he lives to be age 80 he will collect over $3,200,000 in retirement pay and $330,00 in heal insurance plus cost of living adjustments and health insurance no matter what the cost to the city is.
The list goes on. There are 33 recent retirees from Pleasanton making at least $3,000,000 in retiree pay and benefits. They have retired at age 50 or 55 and have a lot of years ahead of them. They can also work and retirement and medical insurance does not get reduced.
These numbers are at: http://www.californiapensionreform.com/database.asp?vtsearchname=&vtsearchemploy=pleasanton&vtquery=1&vttable=calpers
As Jackie Gleason used to say “How sweet it is!”
One thing I would like to point out, since yes, I work for the city, yes, this is frustrating, but only because we feel attacked on a personal level (sorry… but saying “every person in Pleasanton is lovely” after saying “you ungrateful people who work for ME” doesn’t quite shout let’s work together) and in that, we feel there’s no room to express ourselves to you all…
So, I want to point out that we aren’t arguing there isn’t a problem, we aren’t arguing that a 2 tier system will come… what we are saying is that all sides agreed to THIS contract, and to redact it now is not right under current bargaining guidelines, in fact, it may be illegal (that’s for a court to decide, I’m just saying). There have been many comments that we refuse to acknowledge the problem or refuse to give, but that isn’t true. I am sorry that we disagree on how fast, but in this world nobody ever completely agrees on every detail.
The only other comment I would like to make (and I think this is very fair to say) is that residents in Pleasanton hold their workers to a higher standard. That’s a fact. I can recall time after time where I have been told things like “that doesn’t happen in Pleasanton” or “but this is Pleasanton” or “that’s why I pay to live in Pleasanton”.
When residents ask the police department for crime stats, and you want perspective on them, they offer to compare it to the cities around us. NO! you cry… we aren’t like those other cities, we aren’t copmarable to those other cities. But when the comparison works out in your favor here you are… compare us to Antioch! Compare us to Tracy!
Well here’s the rub… if you want to be more like Tracy/Antioch/Union City/Hayward/Fremont… take a look at their stats. What are their crime rates? When you call the police department after business hours, do you get a live person or a recording? In some of these cities they won’t even come out to take an auto burglary report, you must fill out a form online… that’s all you get.
While I agree that the issue needs to be addressed, we are taking the steps… and we haven’t complained about the extra work, and have been giving stellar service (crime rates are some of our lowest ever!) And we know that in our future is more contribution. But keep in mind that the attitude of “we pay your salary, you work for ME, do what I say” doesn’t provide for the type of relationship I want to have with the residents I work with… and I am in the business of working with residents.
So can we stop the rude behavior (on all sides) and agree that while both sides disagree on how fast, the PCEA is not the only bargaining group who is at the table to contribute, and that all of us will be at the table again to asses what’s appropriate to give back then too. And as residents, while frustrated at the potential of a doom and gloom outcome, can agree that there’s a chace things won’t be doom and gloom… and both sides will meet on this path, and communicate as we go.. and know that we can still give great service because we know that there’s mutual respect, no matter our opinions. I think we can all agree that’s not how it is right now.
Respectfully yours in a city I love, a PCEA worker. (sorry for the book!)
“Our last city attorney. He retired at age 55 and has a retirement pay of $161340/year and full medical insurance which right now is around $13000/year. If he lives to be age 80, he will collect over $4,000,000 in retirement pay and $330,000 in health insurance plus cost of living adjustments and health insurance no matter what the cost to the city is.”
Was he the same attorney of record when the retirement age was reduced from 2@60 to 2@55, in 1996? And was he the same city attorney of record, in 2002, that endorsed the increase in pension benefits from the reduced 2@55 to 2.7@55, and also allowed these benefits to become retroactive? If Michael Roush was involved in all these efforts to reduce his retirement age and increase his retirement benefit (going forward and backward) should we be concerned about the efforts of our city government? Conflicts of interest? How do people get away with what should be considered white collar crime? Going forward, given the past history of management decisions and excessive wage and benefits increases, should we be concerned about the accountability of our employees to make decisions that are in our best interests? Should we, as Mayor Hosterman likes to say – just let us do our jobs that you elected us to do and don’t micro manage?
If there is a lesson here it is that we can’t just allow our elected officials or managenment employees to go unchecked. Just because they are elected doesn’t mean they are at the top of the ORG chart. They aren’t. The cities ORG chart places the Pleasanton citizens at the top, and rightfully so. While city employees provide the citizens with quality services it is the citizens of Pleasanton that pay for these services. Somewhere along the line we have lost site of who is working for whom, and I think council has lost site of that as well.
It would be nice if during the next council meeting the mayor would share with both the attendees, the council, and the TV audience the city’s organizational chart, and explain the hierarchy to everyone that is listening. I thought I understood the ORG chart at one time, it seemed straight forward in a top-down kind of way, but now I’m not so sure. Seems like we’ve become a bit disoriented in this fine town and we need to find our compass.
“So, I want to point out that we aren’t arguing there isn’t a problem, we aren’t arguing that a 2 tier system will come… what we are saying is that all sides agreed to THIS contract”
“what we are saying is that all sides agreed to THIS contract”
I’m sorry but I can’t get past this statement, and I haven’t read anything past this statement. So I have to ask you, and I assume you attended last nights meeting – or at least watched it, who is “all sides”? I think that your statement is indicative of the problem.
Arnold,
What I feel you’re saying Arnold is that “all sides” represents the residents. While I feel that they/you/us are an important piece, that role in the negotiation process is another workshop (IMO) because at this particular impass, the agreement has been made, it is called tentative, but there is case law concerning the negotiation process once it has been tentatively agreed.
I’m not saying or insinuating that the public had participated in negotiating this contract. What I am trying to convey is that we are at a point where we need to examine the process, but not at the cost of undoing a good working relationship between the city, the management and the employees.
I’m all for a workshop on negotiations, process, resident involement, etc. I hope I clarified for you. I’m not trying to exlude or dismiss your stance.
Back to the first comment re the spineless council… with zero objectivity or fairness to the residents of Pleasanton, which has created the current mess. Can’t really blame the union rep for grabbing everything she can get. But, we must stop the pretense from the council that they attempt to be fair. There has been no ‘negotiating’ on behalf of Pleasanton taxpayers, up til now. But, that has to end. If we’re forced to form our own taxpayers’ union, so be it. So many officials get stuck in their own ‘peter principle’, when job description calls for tasks beyond their skills…it goes all the way thru the legislature too. Some find it difficult to separate personal feelings from objective and fiduciary requirements of their position. There are two sides to the bargaining table, some find themselves on the wrong side. It appears the union gets dual representation, while the taxpayers get none. I guess we must provide our own. No, actually, the council frequently does studies and hires consultants, I think they have a duty to provide an independent private negotiator for the townspeople they have pledged to serve.
“Posted by here for you, a resident of another community, 15 minutes ago
“Arnold,
What I feel you’re saying Arnold is that “all sides” represents the residents. While I feel that they/you/us are an important piece, that role in the negotiation process is another workshop (IMO) because at this particular impass, the agreement has been made, it is called tentative, but there is case law concerning the negotiation process once it has been tentatively agreed.”
If the agreement is tentative then it isn’t a contract. It hasn’t been placed on the city agenda, as far as I know the contract hasn’t been signed, there hasn’t been a vote, so there is nothing more than a proposed contract at this point. I don’t think your case law argument carries any weight.
To your first point, what I am trying to convey is that your comment that all sides have agreed to this contract excludes the very people that pay for the service. I’m saying that your definition of “all sides” only includes your collective union selves and those council members that put 229 employees, that have been treated MORE than exceptionally well, before 70,000 residents.
You should at least think in terms of a triangle when you’re talking about “all sides”. It’s like a triangular bargaing table but the most important member of the group hasn’t been invited to participate. In Hollywood they consider the money guy/source very important. In Pleasanton they try to hide everything from the source. Everything is a secret. I don’t get that.
here for you – I appreciate your post. Thanks for expressing it. The more civil dialogue like this we have, the more constructive our problem solving will be.
You are right that the key point of disagreement is the proposed rate of change that the PCEA contract represents. My personal frustration is that the public was not included in the discussion until after the tentative agreement was struck. Who knows, we may have ended up at the same place or maybe we could have considered other options, e.g. relaxing the retirement formula instead of significant contribution rate increases (which I realize are essentially pay cuts). In this day and age, it is not untypical to include citizens in these early discussions and there are many examples out there.
I am concerned though that the proposed contract means increased annual costs to the city and our unfunded liability for the next two years. This is not sustainable and hoping that the market will turn around substantially for many years in a row is not a prudent strategy. I am sure you appreciate that while the recent market declines have something to do with this erosion, we can’t ignore the impact that all the early retirements at elevated salaries are having on the situation.
The longer this continues, the greater the erosion will be to our city services. Your team has done a great job to date to minimize the slippage. But if we are honest, we both know this can’t continue. I personally have been told by a member of the city workforce that while that particular department had the people, they didn’t have the budget to purchase the material for the necessary maintenance fix. You can’t have a situation where retirement costs have grown from $3M/year to $15M/year with an overall declining budget and not have it impact service levels.
Hopefully your particular cohort class recognizes the retirement gift it has been given. You will have a substantially higher retirement package than your predecessors and people that come after you. Hopefully you also recognize the substantial burden this is placing on socieity. Yes, it is way worse for other cities, counties and the state, but the impact is still being felt in Pleasanton. I do hope you keep this in mind as the discussions continue.
Thank you all for your continued professionalism during this difficult discussion/negotiation. It speaks highly to your character as a workforce.
Well said Randy. To the others who are assuming that the retired mentioned will live to 80…that is assumption! These people did not get stock options, commissions or the other perks that the private sector brings. When times were good these people had contracts, when the private sector took advantage of stock options, raises and other perks. It is true something needs to be done about pensions; however if benefits are taken away from these public employees now, will you all give them back when the boom comes back around and the private sector is once receiving large bonuses, commissions and perks?
CalPERS has the numbers on the length of retirements. They need to know those numbers for actuarial purposes. No need for assumptions.
“These people did not get stock options, commissions or the other perks that the private sector brings”
You are totally overgeneralising again. Most of the private sector don’t now and never have received stock options or commissions either unles they are in a specialized line of work. The “other perks”?, sorry public sector wins hands down.
I wish everyone would stop talking about the annual contribution being paid by the union members. Their pension is not a defined contribution plan. It is a defined benefit plan based on too few years of service and payable over far to many years. The only solution to the problem is to have a normal retirement age of 65 like the rest of the country which will allow enough time to fund their pensions. It should allow for early retirement but with a discounted present value computation to reduce the end benefit paid for each year of early retirement.
All government pensions are unsustainable in their present form. The worst pension of all the the congressional plan that calls for 100% of compension after 1 term in office.
We need to stop letting goverment employees negotiate government pensions. Talk about the fox in the henhouse!
This morning’s Valley Times says “City Manager Nelson Fialho said the goal is to have all workers by 2013 pay the full employEE share toward their retirement, known as CslPERS- 8 percent for the majority of workers, 9 percent for fire and police “”. . . . So, it seems Pleasanton taxpayers are suppose to believe that since these negotiations, for just this ONE group out of three, tentatively agreed to 2%, that in 2 years we’ll get negotiations of the 6 percent employee self contributions remaining.? Sadly, I fear that is a stall. Are we to believe if we can’t get anything over 2% now, that we’ll get 6% in two years ? ? ? I don’t THINK so ! ! ! After the 2 year stall, the taxpayers will be left again paying not only all the employER’s share, but some of the remaining 6 percent as well. We can’t be that gullible, that they would accept a 6 percent jump, when they won’t ever SPLIT THEIR share at 4% this year.?
“These people did not get stock options, commissions or the other perks that the private sector brings”
Yes, I am one who received stock options. I worked 80 hours per week minimally. I received stock options for my extra work. Then the company eventually had problems before they went public and my stock options were worthless. Never received a dime from the stock options. The good thing was I was so busy working for the company, I did not have time to spend money and was able to save money so I could live until I found my next job.
“and we haven’t complained about the extra work,”
I have also worked for companies that had to do layoffs. I survived in the company but many others lost their jobs. We still had the same amount of work to do so I had to work a lot harder and do the jobs of several people. I did not receive more money, benefits or anything. My reward was “continued employment”. In the case of the city and you having to do extra work, the reason you have to do extra work is we cannot afford to hire as many people because the cost to pay for existing employee benefits and retirements are so high. The employees have made a decision to have higher pay and higher benefits for each of you and work much harder. We are at the point where your costs keep going up and you the existing employees cannot get more done in the same amount of time, and like stated above, we cannot afford the materials.
A big problem we have today is the negotiation process. It is done by the City Manager staff, who all receive the same benefits. There is a conflict of interest there. In 2002 when the last contract was negotiated, it was negotiated by a city manager who knew she was retiring in a few years so an increase in pension would benefit her directly. And the City Manager, as Arnold talked about previously, after he announced retirement he got his friends on the city council to approve a retroactive pay increase so that his retirement pay would go up.
I think there might be an obvious change that needs to be made. All management, including the city manager and city attorney, should not be part of the retirement system and retiree medical. They cannot negotiate on behalf of the residents if they have vested interests in what they are trying to negotiate. A matching 401(k) type plan is a better thing.
It actually amazes me this this is allowed to go on. We have the FPPC which is in charge of government ethics. They have a rule that somebody who has a conflict of interest, or even a perception of a conflict of interest, should recuse themselves in those discussions.
Is it time for “Tales of Horror and Suspense from the Private Sector”? 🙂
“Well here’s the rub… if you want to be more like Tracy/Antioch/Union City/Hayward/Fremont… take a look at their stats. What are their crime rates? When you call the police department after business hours, do you get a live person or a recording? In some of these cities they won’t even come out to take an auto burglary report, you must fill out a form online… that’s all you get. ”
In Fremont, they won’t even answer a burglar alarm at a residence. No kidding.
You certainly make some good points. Avoiding reduced services and layoffing off employees is not what anyone wants, and that is all the more reason for containing costs and reforming the pension plan. If we can’t get those goals accomplished we’ll eventually end up like Antioch, and the build out of the Bernal park will be delayed for decades.
The City decided not to pay into Social Security (as most employers do), but selected to pay into CALPERS for its employees. This is part of each employee’s contract. The City has obviously failed to react promptly on the gap between cost & income which was known for the last 3-4 years. I don’t think it’s fair to ask the employees to step up and take the slap in the face asking to take an 8% paycut to help fund the retirement plan. IMO the initially proposed 2% cut is more fair. After all it’s the City’s services provided with the same good quality everyone living in Pleasanton still wants to draw from. Don’t we as Pleasanton’s citizens have some responsibility in making our City’s budget sustainable in the future? I believe we do. At least I would not mind paying a few dollars extra to help mitigate the shortcomings. After all we elected the City’s officials who failed to realize the effect of the growing gap – why should the City’s employees be the ones solely held responsible for that? The fact that the City decided to cover the retirement plan costs tells me that this decision was evaluated well and certainly affects the salary tied to every position.
So let’s not apply carrot & stick tactics just because City management messed up long time ago. After all the City’s financial situation is nowhere near critical, so let’s not overreact the same way we underreacted a couple years ago. We all need to step in and take some charge and come up with a well thought out plan to mitigate the drifting apart of costs and income. Just my $0.02 and no, I don’t work for the City – I work in the private sector.
We taxpayers ARE paying our employeR portion, and we stupidly have been paying all 8% of the employee contribution for them. 2% is too low. 4% seems about right for this contract…and in 2 years they can pick up the remaining 4% of their employeE portion. They should be grateful for all the extra money we have allowed them to enjoy in recent years, while we have been picking up THEIR EMPLOYEE portion FOR them….let’s call all that a BONUS ! So, this year they can pay 4% of their responsibility, and we’ll continue allowing them a 4% BONUS for these next 2 yrs. 4% this year seems reasonable for them … Most of their neighbors have been living with 10% cuts for 2 years….if they have jobs at all.
That alarming NEW INFO from the state definitely calls for upping the 2% to at lease 4 for this contract.
“Don’t we as Pleasanton’s citizens have some responsibility in making our City’s budget sustainable in the future?”
All council members and city staff repeatedly agreed that the present pension system is UNSUSTAINABLE. So, what do you propose to make something that everyone agree is unsustainable sustainable?
The root of this problem is the pension system itself. Why don’t we scrap it and switch to a defined-contribution type of plan? Seriously.
Arnold,
Thank you for the presepctive, and I can see how cuting the benefit seems to equal more employees, but the city made it very clear that we have too many employees as it is. They are looking to cut the percentage of employees we have, no matter how much we put into our retirement system. Respectfully, we will be doing the extra work for good. This was covered in the slide show/power point which I believe is posted on this (I think the city’s actually) site.
All,
Unfortunately, things get very hostile when the attitude is “thank us for paying you and allowing you to work for us”. It is equal to saying “I’m better than you because I chose a different profession”. If the job is so fantastic to you, and it comes with so much, how come you aren’t here? There have had openings in the last year for PCEA positions, how come you haven’t applied? Again, I don’t mean that to be rude, and I apologize if it comes off that way, but I don’t think it’s been expressed before.
While I realize these aren’t the attitudes some (I’ll site Arnold here, there are others) put forward, it’s sad to feel like an employee’s reaction (a simple respectful posting made by myself) gets this attitude in return – and it’s completely acceptable to this group?
I have very strong feelings as well, but really want to strive to be as positive and respectful as possible. Having said that, I must say that I can’t stand hearing about how everyone is suffering. I know many of us have spouses that are out of work/ill/etc. THAT isnt the problem we are trying to solve. If you want to start comparing things like that, we can start with salary, our average (as stated in the presentation) is 85,000. The average salary of a Pleasanton resident (as stated in the presentation) is $119,000. I have no complaints about that. Nothing contrusctive is coming of the complaining of hard times – on either side.
I’ve been reading these blogs all along, and this is the first time I’ve seen so many contructive possible solutions to the problem. Not just yelling and screaming about how horrible everyone is for this contract. I don’t know if new people decided to speak up, or if some have vented enough to get to the bottom of things, but I wish the council meeting looked more like this. And thank you to the few who have engaged me with respectful conversation 🙂
The thing that gets me is the assumption that everyone in Pleasanton is an investment banker or the founder of Google. And these are the people that the public sector poster here seem to be comparing yourselves and your benefits with.
What about the accountant in a small business, the gardener working for a landscaping company, the receptionist, the book store owner? These are all taxpayers too. These people don’t and haven’t enjoyed inflated benefits. They will not retire at 50 or 55.
two cents,
I am sharing the figures used in the presentation. They are fact. Just as what you are saying, in my group some people get paid a lot more, some a lot less than that average. I know very well that a lot of people in this city don’t make that average. And while some positions in this group may be able to withstand 60 or 65, not every position can, because the sheer nature of the position is such that many would medically retire out. If you think the system is expensive now, research what a medical retirement would cost. Ouch. Again, very possible for some positions though.
here for you wrote: “The average salary of a Pleasanton resident (as stated in the presentation) is $119,000.”
I’d like to clarify that for you. That number is not the average salary of a single Pleasanton resident. It’s the median household income. That means two parents working $60,000/year jobs would make median. It means that 50% of Pleasanton households make less than that and 50% make more than that.
Stacey,
Thank you very much for clarifying, you’re correct. I do know that the number posted for the employes was the average, not the median. I’m not a math person, but wouldn’t that have to mean that more people in the employee group make less than that average?
And Stacey I read that back, didn’t mean it to be snitty, seriously I’m not a math person, and I don’t know the mediam for the group. Just saying.
To get a better idea of the typical PCEA employee salary, you’d need to look at several different numbers: mean (average), median, and mode. Range would be useful too. http://www.purplemath.com/modules/meanmode.htm
I wish I knew the percentage of households in Pleasanton with two income earners. Nationally it is something like 42%. It would inform the median Pleasanton income discussion better. If one income earner in a household got laid off, that household could find itself well below median and I think we see that kind of thing reflected in the foreclosures, which affects property tax revenue, and cuts in sales tax revenue.
I didn’t think it was snitty 🙂
WOW! What a great response from the people of Pleasanton. I live in San Ramon. We are all in the same spot. When are we going to stop giving away the farm. When we are all broke (like Vallejo)
Al P
I’m wondering if Mr. Hughes might be a door to door salesman? If so, I wish him well… I hear it’s a very dangerous job.
Bart Hughes: “Here is an interesting perspective from someone who can truly say they sit in the middle. With all this talk about civility in public discourse, I have observed and experienced much more incivility and denegration from the left than the right. Food for thought …”
Maybe because you’re representing an extreme-right position on this issue, and outright dismissing anyone who dares express an opposing viewpoint? I thought you said you were done playing the victim.
Food for thought…
…in fact, *I* have been attacked QUITE viciously by “the right” on this forum for my opposing viewpoint on this issue–described in some pretty nasty terms, accused of incorrect affiliations, etc.
There are some rabid tea-partiers on this forum, and they leave you alone merely because you represent their viewpoint alone.
Food for thought…
This article: “Everyone agrees that Pleasanton is in financial difficulty,” Hughes said.
Posted by Bart Hughes, a resident of the Another Pleasanton neighborhood neighborhood, on Jan 22, 2011 at 10:47 am
“Anonymous – Pleasanton is not going bankrupt and is not close to that. But this is not the issue.”
So which is it?
The fact of the matter is that Pleasanton has weathered this horrible recession just fine, and is now seeing increased tax revenues and improved investment returns–two trends that are JUST GETTING STARTED, and are going to skyrocket as this economy recovers.
Let’s stop trying to harm the people who work hard for us, and instead focus on blocking these ridiculous citizen initiatives that cost us millions in legal fees, studies, public forums, staff time and more.
We have an opportunity to be a premium employer–to pay OUR employees FAIR market compensation(which is exactly what they’re paid) in order to continue to attract the BEST employees, not just those who will accept the lowest wage. As they say, you get what you pay for.
This crisis has been fabricated by your local Tea Party ™ to further their agenda of eliminating all the things that make our city so great (premium schools, abundant parks, extended library hours, downtown events, and so much more).
Think twice about what you’re REALLY supporting here.
“Financial difficulty” is a weasel phrase that Hughes and the other Tea Partiers use. It means what they want it to mean, no more and no less.
Perhaps the most gifted writer in the genre of “literary nonsense” can explain this better than I:
“When I use a word,” Humpty Dumpty said, in a rather scornful tone, “it means just what I choose it to mean – neither more nor less.”
“The question is,” said Alice, “whether you can make words mean so many different things.”
“The question is,” said Humpty Dumpty, “which is to be master – that’s all.”–thanks to Lewis Carroll (that’s from Through the Looking Glass, aka Alice’s Adventures in Wonderland)
I keep hearing from the union that the worst is over and we are overreacting. However, we heard from the City Manager that the rates will be going up in future years plus CalPERS will likely lower it’s required return on investment which will raise the rates more. Then you add on that we are underfunding the system already and paying a discount rate because it is actually a much worse problem but the cities would all go bankrupt if they were required to pay the full amount. The system has also lost so much that they are “smoothing” out the rates for 30 years. That means that 20 years from now we will still be paying for what has happened this last decade.
For the union people here, will you admit that the statements that the city was given on increasing our pension plan would not cost us anything has turned out not to be true? Or are you still saying that the increased pensions are not costing the city any more than the old pensions?
I am not a member of any union, nor an employee of any govt agency. I am a citizen who sees his city’s fabulous services threatened by a bunch of government-haters, who cost our city millions with “citizens initiatives” that do more harm than good.
I’m also an experienced manager who has seen the negative results of cutting compensation to the lowest possible denominator, as well as the amazing results that come from paying people at/above the market rate–and showing that you appreciate their loyalty and efforts on your behalf.
I have a simple solution to the problem that I’d honestly like to get the reaction from the workforce on. What if the current workforce went back to the previous pension formula for the remainder of your careers? While I don’t have the actuary information, I suspect that this would clear up much of the problem without resorting to subtstantial employee contribution rate increases and the resulting paycuts.
Please keep the following in mind as you consider this:
– Many cities have already reduced their pension formulas so Pleasanton wouldn’t be disadvantaged
– Many of you joined the Pleasanton workforce prior to this bump so you join with a very different contract
– People prior to you didn’t get this
– People after you won’t get this – unfortunately it is a matter of time before the formula reverts – you heard from staff and council the other night that the current system is unsustainable
Was this option considered? And is it feasible from your perspective?
Bart,
I know what you’re asking but I think it isn’t clear. You are not saying that employees will go back to the old formula. You are saying that employees will get 2.7% @ 55 for all the years they’ve worked _so far_ for Pleasanton and 2% @ 55 for years not yet worked.
b,
Who is saying to cut compensation to the lowest common denominator? You and I still agree that we would not like to see an initiative. I think it is still possible that we will see that.
Yes – Stacey – thanks for the clarification.
Bart, that proposal seems more fair to me. With the 8-year contract most employees are being paid at or above the market rate and your proposal does not cut their pay at all.
See b – I can be reasonable 😉 For me, this has never been about taking people down to the lowest common denominator. It has been about managing retirement costs so that they don’t continue to undermine city services or force increased taxes. (I understand and agree to my civic duty to pay taxes but take issue with my taxes being raised to enable early retirement of others.)
I really wish there had been the opportunity to hold a public forum prior to the tentative agreement. Then all the facts would have been presented and checked, go-forward assumptions presented and evaluated, and various options considered. I suspect we collectively (employees and citizens) would have ended up with a better solution.
Bart and b,
The City appears to be following a long-term pension reform plan that the other California League of Cities cities are doing. There is no clear reason for why other than for this idea of remaining “competitive” amongst each other. I wonder if the other ideas for pension reform, such as going back to the old formula for future unearned years, would have been put on the table if the City had held a public meeting prior to starting negotiations.
s, you are so right and explained it correctly. I would ask everybody to scroll back up about 6-7 comments briefly and read or reread ‘s’ comments….key points.
The process is not open and transparent, unless tentative means tentative. If council is just ‘presenting’ after-the-fact, then it is NO different than after signing. IF that’s the case, and we really don’t have any input, then obviously we will have to have a new negotiator that is responsible to all Pleasanton residents.
I understood the workshop was to be ‘part of the process’.
I want to thank Bart for bringing this up to the Pleasanton City Council. I think he has done a service to us all for putting a spotlight on an issue that could effect the fiscal health of our community. Personally I am in favor of re-doing the contract and having the city employees pay more of the cost of their pensions. I know that many of you have other opinions.
However I am amazed that people are questioning the ‘authority’ that Mr. Hughes brings to the table on this topic or whether or not citizens should be involved in this discussion as this is a contract between the city (e.g. the city council) and the employees.
We should welcome citizen involvement in these discussions and ask the tough questions; because if we don’t we could have experience the type of mess in Hercules or down in Bell. These are both incidents of the lack of citizen involvement led to serious transgressions by the elected officials.
EJC, 100% Agree with you.
Thank you Bart.
“Posted by b, a resident of the Another Pleasanton neighborhood neighborhood, 13 hours ago
Bart, that proposal seems more fair to me. With the 8-year contract most employees are being paid at or above the market rate and your proposal does not cut their pay at all.”
If the employees are paid at or above market rate and the employees don’t contribute to their own retirement, which increases their at or above market pay rate by 8%, is this proposal really fair? Does it help solve the problem of unfunded pension liabilities? If so, can you explain it to me?
I only ask because I’m not so sure.
I can’t say for sure as I don’t have all the actuary data. I threw out the idea as an alternative to just taking a straight pay cut to fund the employee contribution. If taking a paycut creates too much of a hardship, alternatives should be considered. If we had help public workshops prior to te tentative agreement, alternative ideas would have been identified and explored. Instead we ended up with a proposal that will cause annual retirement cots to increase and increase the unfunded liability.
Bart,
Thank you so much for all your hard work to shed light on this crisis. You have shown tremendous leadership and courage to challenge our city’s elected officials.
Your work also illustrates the lack of leadership by our city council and especially our mayor. If you did not stand up and challenge them, the public would be unaware of the lack of action taken by our leaders.
I know they will do nothing to address this fiscal crisis. That much is clear. However, now they can’t say they did not know how bad the problem is. You can’t sweep a quarter of a billion dollars of unfunded pension liability under the rug.
In the future, if this thing gets worse, the city council and the mayor will be responsible for it. You stood up and informed them.
For that, you deserve a resounding thank you from the residents of this city.
Please check out Dan Borenstein’s latest on ContraCostaTimes.com titled “Pensions are higher than advertised”….very important expose’. We heard all the dramatic and unbelievable stories at the workshop. They used inapplicable and irrelevant ‘averages’ that do not applyi to our positions in Pleasanton. It’s a statewide trick, I heard Lockyer use the false averages on radio. It averages part-time dishwashers, who leave (retire) after TWENTY years….not applicable to our Pleasanton unions. Check it out. Next time we’ll call them on those kinds of ‘averages’. …..PS fyi …the Sunday censor was at it again…I posted this about 4 hrs ago and it shall we say ‘disappeared’…VERY interesting. Gee maybe PW censor could get a job censoring in Cairo !
I guess I missed something. Did anybody hear an accounting of the “stimulus” money Pleasanton received. I read somebody decided to usse it to ‘pay’ into the UNDERfunded pension retirement fund.
Shouldn’t that have been mentioned in Emily’s report, and I think it was around $150,00. ???, That should have been accounted for what our numbers would HAVE BEEN WITHOUT that 1-time gift…how that changes the reality of what is real, and not to rely on those UNreal figure. Anybody have the ‘rest of the story’ on that money ? ? ?
What gets me is that I hear people saying, “well I’ve lost 30% last year or our family has suffered”. I’m sorry for your loss but just because you have suffered doen’t mean I (a city employee) has to suffer one bit. We all choose our career paths. Some people choose a career that would get them a lot of money or open their own business. That’s a big risk that I would never take. I chose to work for a city because it was a STABLE job. I knew going in it was less an hour but the benefits were very good. Just because you got bad luck in your job doesn’t mean everyone else has to.
Example, two people are sitting next to each other on different slot machines and both people put in a dollar. One person hits the million dollar jackpot and the other hits nothing. Should the person that hit the jackpot have to suffer because the person next to them hit nothing? NO The person who won nothing has no reason to complain. Its all about choice in this world.
The next time any Pleasanton citizen in the “private sector” starts making big bucks ($100,000 + a year) then I want some of that too because like all you complaining citizens say, “its not fair”
To Bart,
How much do you make a year? I ask because as a city employee that makes under 60k a year, I don’t make nearly what you make and in your words, “I just want what’s fair”. I don’t complain that the professional athelete makes millions and millions of dollars or those CEOs that sit on their butts all day or golf and take vacations get paid OUTRAGOUS amounts of money. People need to quit complaining and getting upset because their choice in job careers didn’t go that good.
The difference between Bart and city workers is very simple.
He doesn’t rely on taxpayers to pay his salary.
When the public pays your salary, they have every right to raise questions when overgenerous pensions threaten the financial stability of a city. Make sense?
And P, your use of coin slot machines in Vegas is pretty good because city workers are in fact becoming millionaires by working for this city. You think that’s OK. No reasonable person does.
P, you must be one of the lowest paid workers in the city. At the workshop they said the average salary for “rank and file” was $85,000! Wow! That does not include management at all so I would say we have a staff that is paid well. Real well.
P – I urge you to go back and review Emily’s presentation that she reviewed during the “workshop”. You will see that personnel costs have increased from the low 60% range to nearly 80%. Because both salaries and retirement benefits increased so dramatically these past eight years, we now have a situation where non-personnel budget line items are being crowded out. This is not sustainable – these are not my words but the words of your management and the City Council.
I don’t have an opinion on whether/not particular city employees make to much or too little. I don’t have the information to make that determination. I continue to be focused on exploding pension costs that now most everyone agrees are unustainable.
This issue can be solved in many ways – increased employee contributions, reduction in retirement formula, two-tiers, etc. But I believe that it is not fair to have Pleasanton taxpayers to continue to pick up rising pension costs. Just think of the lack of service levels that will occur if personnel costs rise above 80% and we as a city can’t afford the necessary materials required for basic services.
I can certainly understand the hardship that a 2-8% pay reduction will create for someone at your income level (but I still find it hard to believe that a full-time employee only makes $60k/year after having just receive 41% increase in pay over the past eight years), and this is why I believe your union needs to start taking a closer look at your retirement benefits and begin to compromise on the formula or look at other innovative ways to solve the issue.
P – you just don’t get the math. It’s not about people making 30% these days trying to equalize,. . .it’s about the newly suffering making 30 % less who CANNOT continue supporting / paying excesses that just continue on, with no signs of even slowing. Being held hostage to blind and unrealistic greed is not a good ‘working plan’.
Bart, that was not me who posted the above comment re: your proposal being fair. A pretty low standard of ethics around these forums.
If an employer ever came to me with a proposal like that, I’d go find a new job.
And don’t tell me there aren’t any jobs. That was true 2 years ago, but not now.
– the real “b”
Unfunded pension liabilities … um, unless they become funded. Not sustainable … um, unless citizens in one of the wealthiest small cities in America agree to sustain them. It seems easier, and more self-serving, to target public sector employees than to criticize the way wealth is divided within society. It pits private sector worker against public sector worker, while the golf cart crowd that has skimmed off the lion’s share of private sector profit goes unscathed. Very convenient. In difficult economic times, marked by regular joes and janes getting skewered by the powerful and rich, the golf cart crowd rewards handsomely all the conservative think tanks to write poorly documented, uncontested pieces on smoothing and unfunded liabilities and unsustainability, as a means of attacking public sector employees. But, as always, this simply is meant to deflect away from the real problem. It’s always someone other than the rich who is to blame. The unions. Communists. Welfare mothers. Undocumented workers. Teachers. Black folks. The current flavor of the day: public sector employees.
Mr. Hughes, I find it hard to believe that you “still find it hard to believe that a full-time employee only makes $60k/year after having just receive 41% increase in pay over the past eight years),” when YOU are such a champion of “checking the numbers yourself with the city.”
Check the numbers yourself with the city:
http://www.ci.pleasanton.ca.us/pdf/pcea-salary-2009.pdf
Yes, there are positions in the city that pay under $60,000 (at the highest step and after the last increase). And you could also easily get the information that tells you how many employees make that much and how many make more than that.
Hence, the workshop statement that the median is $85,000.
You’ll just say whatever you need to say whenever you need to say it to make your point, won’t you? Very disappointing.
@anonymous,
your comments verge on denigrating those who wish to politely cut your salary and benefits. we can’t have that. haven’t the teahadists informed you that you’re supposed to take the proposed cuts with a polite, ingratiating smile?
“Posted by anonymous: I find it hard to believe that you “still find it hard to believe that a full-time employee only makes $60k/year after having just receive 41% increase in pay over the past eight years),” when YOU are such a champion of “checking the numbers yourself with the city.”
I also find it hard to believe. I bet you can’t show me hJTone full full time position that makes less than 60K. Prove me wrong!
Arnold evidently didn’t read the web link posted by anonymous. Too busy watching Beck, perhaps? Maybe it’s Arnold’s own reference to ‘hjTone full full time position’ that is giving him a self-induced head-ache?
I continue to be amazed by the people who call me out as being dishonest with the numbers I present while at the same time use knowingly misleading numbers/sources.
Please compare the above referenced URL with the following:
http://lgcr.sco.ca.gov/CompensationDetail.aspx?entity=City&id=11980168700
Which one tells a more complete story of Pleasanton employee compensation?
Thank you every so kindly, Mr. Hughes. And we all know that statistics don’t lie…. But methinks this will do little to quell poor Arnold’s self-induced headache.
Sally
That is JUST a salary schedule and not employee compensation. There is a big difference. I’ll ask you the question, can you point to one full time position(PCEA)that is currently paying less than 60K?
What do you think about the PCEA refusing to accept a second tier for future employees? Is this an example of coming to the table? Good faith negotiations? Speaking of fairness, what are your thoughts on RETROACTIVE PENSION benefits? Do you think only other people are responsible for your retirement? Should everyone else but the workers cover the cost of the mistakes made by the Pleasanton City Council/Union misrepresentation/CalPers snow-job?
Have you looked at the latest polls regarding public sector union approval ratings? You should google it!
To Bart:
You said, “but I still find it hard to believe that a full-time employee only makes $60k/year after having just receive 41% increase in pay over the past eight years”. I’m one of those employees who makes 57k a year and that is public record. I’ve been with the city 9 years so YES there are plenty of FULL TIME employees who make under 60k a year. Please don’t compare us (the little man) with them (the management). It’s also us, the lowest people who are out there doing all the hard labor.
I have no idea what you do for the city or whether $60K means you are overpaid or underpaid, so I /can’t/won’t comment on that.
Here is the key point for all employees of Pleasanton to consider. Total payroll costs as a percent of total budget have increased from the low 60% range to nearly 80% today. With the coming increases from CalPERS for your pensions, this percentage will likely go higher. This is an issue because as personnel costs crowd out material costs and reserves, service levels will degrade. There is no way around this unless something changes.
As I mentioned in a previous blog, I have already been personally told by one of you that while you have the people, you don’t have the material budget to deal with some of the maintenance issues.
So while while some of you individually may claim that you are not over-compensated, collectively as a group you are when both salaries and benefits are considered. This is based on the city’s own information that was presented last week. It can’t be any more cut and dry, but I’m sure many out there will try to twist this away from the basic fact.
The current proposed PCEA contract, even with the current set of give-backs, would mean that personnel costs would continue to increase over the next two years. I believe it is fundamentally wrong for an ill-planned pension bump to continue to starve the city. BTW, 71% of the public also agrees with me according to the most recent Tri-Valley Herald Poll. Public employee pensions must be reformed and the longer this drags out, the worse it will be for the city.
“You said, “but I still find it hard to believe that a full-time employee only makes $60k/year after having just receive 41% increase in pay over the past eight years”. I’m one of those employees who makes 57k a year and that is public record. I’ve been with the city 9 years so YES there are plenty of FULL TIME employees who make under 60k a year.”
“S”, no there aren’t, and that includes you. Sorry to be rude but that is, regarding this question – STRIKE 1
Mr. Hughes, I find it interesting that in one breath you say that you “continue to be amazed by the people who call me out as being dishonest with the numbers I present while at the same time use knowingly misleading numbers/sources.”
The “knowingly misleading numbers/sources” I use are from the city website.
So, the city is using knowingly misleading numbers? And the city is a knowingly misleading source?
And, yet, time and time again in another breath you implore people to check the numbers with the city themselves.
You can’t have it both ways, sir. You’re a weasel, Mr. Hughes, and your own words call you out.
“The current proposed PCEA contract, even with the current set of give-backs, would mean that personnel costs would continue to increase over the next two years. I believe it is fundamentally wrong for an ill-planned pension bump to continue to starve the city. BTW, 71% of the public also agrees with me according to the most recent Tri-Valley Herald Poll. Public employee pensions must be reformed and the longer this drags out, the worse it will be for the city.”
You certainly understand the issues. The longer it takes this council to make the necessary corrective actions the more pain will be felt down the road. If I’ve learned anything from researching Vallejo it is this: don’t do tomorrow what you should do today. Their finance director repeatedly warned the city council that if you continue to delay decisions it will cost more in the short term and it will lead to even more rservice reductions in the long term.
When you have accrued 100’s of millions in unfunded liabilities in just a 6 year period you have a serious problem. If the city doesn’t think so they should consider that Moody’s will be acounting for this liability when considering the Pleasanton credit rating.
I’ll add this for a topic of discussion:
‘In an article written for the Web site of Public CEO, Long Beach Councilman Gary DeLong said the council is determined to roll back pension benefits to the level in 2001, when disastrously generous increases were made, retroactively. Long Beach’s mayor, Bob Foster, says the city will take the issue to voters if the unions try to block reform.
Orange County Supervisor Moorlach would agree with all that and more. He is pushing a lawsuit claiming pension retroactivity was an unconstitutional gift of public funds. The suit lost recently in appeals court, but Moorlach wants to take it to the state Supreme Court. He makes a compelling point, that public agencies try to claim unfunded liabilities aren’t the same thing as a debt, yet issue pension obligation bonds against it as if it’s a debt. Can’t have it both ways.”
– from the article, “Brown must curb unions”
http://www.presstelegram.com/opinions/ci_17314056
This is a good article about what cities are trying to do, as opposed to what some cities are trying to avoid.
Arnold,
How can you tell me that I didn’t make 57k last year? I know exactally what I made. As a matter of fact I’m looking at my W-2 form right now and it says $56,814.00 Don’t tell me that I don’t make something that I know I do and so do my co workers. $56,814.00 is living so large, isn’t it? I’m at the top step of my level and with no increases, If I retire with 20 years of service that’s 54% of my salary. If you do the math that $26,134.44 a year, $2,500 a month, that considered poverty level. I can’t even afford to live in the city that I keep up everyday for you guys.
I ment to say in the above post, “that’s just above poverty level.”
Here is a link for the 2009 to 2010 Federal Poverty Guidelines http://www.atdn.org/access/poverty.html
I try to be respectful but your ignorance makes it difficult. Let me just say this: your logic isn’t, your argument stinks, and your numbers are both wrong and lack real world relevance.
Sorry about that, S.
Arnold,
So are you telling me I didn’t make that amount of money last year? If I scanned my W-2 form would you then believe me?
“S”
That is what I’m telling you – you make way more than 57K. Maybe the next community forum should be for “employees only” so the City manager can explain it to you. You’re doing much better than you think – be happy. Maybe when you understand the numbers you’ll be more reasonable. Just a thought.
S, don’t think you work for the city. If you did, you would have know that management is not in your union and thus is not part of the salaries that make up the $85K average. The $85K average does not include management.
Anybody can go to the California Controller’s website and look-up all the salaries for any city. Shows you the starting and high salary and what the W-2 income was for that position. It is at: http://lgcr.sco.ca.gov/CompensationDetail.aspx?entity=City&id=11980168700 . That data is for 2009 but since there were no raises last year that should be close to the same. So if you really did work for the city, you are a janitor as that seems to be the only job with the high end and an actual around your salary range.
Arnold,
W-2 forms don’t lie. Box 1 (wages, tips, other compensation) says $56,814.00 Yes the city has employees that make that much, or should I say that little. I have a feeling if you actually live in Pleasanton, you’re making a lot more than that.
observing,
No I’m not a janitor. I did look at that link from the California Controller’s website and there are many people on there that make less than me. I also know that management is not in our union and they’re the ones you should be mad at sucking the citizens dry with their $150,000.00+ a year retirements, not the little man.
observing,
By the way, I didn’t even see a job description on there for a janitor. Did I miss something?
S- what is it with all your name calling? Do you think it increases the stature of your arguement? BTW, what are you arguing anyway? Are you suggesting because people like you make around $60K/year, we don’t have a problem?
Let’s go with your $60K for a moment or the $85K/average that Emily referenced. Do you realize that the Pleasanton medium household income is $118K and that many, many households are two income to achieve that number (yes I understand the difference between medium and average but this these number are all I have right now). Pleasanton employees are not underpaid – in fact one could argue that on average Pleasanton city employees make more than the average Pleasanton private industry employee.
Regarding data sources and the ability to mislead with them, which one above tells the more complete story? A step/column schedule for a lower-paying job or a complete list of actual pay across the entire workforce? All I can do is smile when people like you acuse me of being dishonest with numbers and don’t even see the hypocrisy in their own actions.
Please answer one simple question for me. Given personnel costs have increased from approx. 62% to 80% of total budget, do you believe we have an issue that needs to be addressed?
S, I think what Arnold is getting at is that your W2 wages don’t include items like the 8% employee contribution portion the city picks up for you. So you do in effect make more than what your W2 shows.
Mr. Hughes, first of all, the term is median, not medium. So, I’m not so sure you do understand the difference.
And are you suggesting that the city numbers are inaccurate? That would be a very interesting take coming from you.
Given that the city (a very financially stable city) presented a very reasonable plan on controlling personnel costs, I believe the problem is already being addressed in a very measured, fair, and sustainable way.
Given that you continue to call for a two tier system that does nothing for the city for at least 15 years, my opinion is that your opinion is bunk.
You are right, thanks for the correction. But it doesn’t mean I don’t understand the concept.
I am stating that actual W2 wages reported by the city are a more accurate depiction of compensatation that a step/column table. If you disagree, I’d be curious to hear your rationale.
Reasonable plan, huh? Is it reasonable that the proposed contract will make:
– personnel costs continue to rise faster than overall budget?
– unfunded pension liability continue to grow?
I continue to bring up the two-tier pension point to illustrate how unreasonable the union has been and how Pleasanton residents continue to be short-changed by a one-sided negotiation process. I continue to hear how employees understand the issue and want to work with the city to solve the issue. So, please help me understand why the two-tier point wasn’t given up as a jesture of good will? Especially since it doesn’t impact current employees.
I guess the silver lining from all this if the current contract is approved is that it will improve the odds of success for an initiative. Chew on this:
– 71% of the public agrees with my perspective
– Menlo Park (a more progressive town than Pleasanton) overwhelmly passed an initiative that forced the two-tier system and much greater employee contributions on the workforce. They took matters into their own hands due to the dysfunction of their City Council and management.
Ask yourself this if this issue goes to an initiative, will Pleasanton’s personnel cost track record and this most recent contract be viewed as fair and reasonable by the voting public? I’ll bet not. The numbers speak for themselves.
anonymous,
The City doesn’t have a plan. It only has a set of goals and an underdeveloped strategy. It still needs to define tasks to achieve those goals and a timeline by which tasks need to be accomplished in order to remain fiscally healthy. If they miss these measurables, then the risk is that the City will not be fiscally healthy in the long-term. They expect to work on a plan at the budget workshops in March.
A failure in planning is a plan for failure…
“Given that you continue to call for a two tier system that does nothing for the city for at least 15 years, my opinion is that your opinion is bunk.”
Annonymous, If it does nothing for 15 years, and it doesn’t effect current workers, then why put it off. Delaying this only means it won’t have an effect for 17 years. Where is the logic in that?
BTW, I do not subscribe to the notion that it won’t have an effect for 15 years, as the CM or finance director has stated. It just isn’t true.
A comment was raised about personnel costs that have increased from 62% to 80%. I don’t know the time frame that this has occurred or whether or not these numbers are correct. I would like to point out, however, that COP has added quite a few new assets to the cities amenities in recent years. Such as, new sports park, Firehouse Arts Center, golf course, annexed Staples Ranch, etc. Any additions made to the city have to be maintained. This requires personnel, pure and simple. This is at an increased cost to the city. New streets and new homes equals increased maintenance costs. My point= You have to look at the whole picture and not just a small segment.
One of the reasons we love our city is because of the services and amenities that the city offers. Unfortunately, there is a cost to all of that. If we are not willing to pay for it all, then something has to give. That means “ALL PARTIES” have to give. We residents may have to also “give” with less amenities. I heard a lot about “fairness” last week but nothing about what we residents are willing to give up. What are WE willing to give up?
Mary,
I recommend you watch the video of Emily Wagner’s presentation at the Feb. 1st workshop. It is available on the City’s website. The entitlement cost increase is within the timeframe since the last contract in 2002. You’d also learn from the presentation that the City has decreased the number of total employees via attrition.
Stacey-
I’ll take a look at it again. I did watch most of the presentation but it was a lot to take in at one time.
I do remember that there were quite a few positions “eliminated” or “not filled” as people left city employment(attrition). You have to admit, we all have had a situation in our working careers where we have had to do more with less. This is no different for our city employees. We are asking them to do just that while keeping our “levels” or “expectations” at a high level. So I ask again, what are we, the citizens of this fine city, willing to give up?
I’m not saying that things don’t need to change, I’m just saying we need to work together to compromise. That includes all of us.
Mary,
In the workshop it was said that X number of employees have left, those positions hadn’t been filled, and service levels remain constant. Without looking further at some measurables, it is easy to conclude that it means more is being done with less, but the other could also be true, that the City was overstaffed to start with. The attrition may be occurring across-the-board instead of targeted so it could be that some departments are truly doing more with less and others were overstaffed. Hard to say either way with the information given at the workshop.
Your question, of course, is reasonable. Should the City be in the golf business? My personal opinion is no, even though I don’t know if the business has positive cash flow. Even so, it appears that getting out of the golf business would still not address the issue of increasing entitlement costs.
“Everyone agrees that Pleasanton is in financial difficulty”
Where the heck does he get this? What financial difficulty? I haven’t heard of services being shut off or anything. Where is this coming from? Does anyone know what he is talking about? Pleasanton looks great.
“Where the heck does he get this? What financial difficulty? I haven’t heard of services being shut off or anything.”
Not yet! You probabaly also haven’t seen the extension of the bike trail completed, and you won’t see the Bernal Park completed for decades – well beyond the earlier projections. What financial difficulty, you ask? We have an unfunded pension liability of 100’s of millions of dollars that didn’t exist just eight years ago. Those dollars represent money owed by the taxpayers, that will eventually need to be paid to the employees, for services rendered prior to 2009.
If the credit rating agencies expand their practice (http://calpensions.com/2011/01/31/moodys-begins-treating-pensions-like-bond-debt/) of lumping in unfunded pension obligations with general bond debt obligations to municipalities, that shiny AA+ credit rating Pleasanton has won’t be looking too shiny. It’s bad enough that muni bonds have been weathering a recent sell-off as investors are nervous about the increased prospects of muni bankruptcies.
http://www.institutionalinvestor.com/rss/Articles/2764730/Whats-Behind-the-SECs-Public-Pension-Investigations.html
““If a plan is underfunded by a ton of money and that is not disclosed, investors are arguably buying bonds with their eyes closed.” The investigation potentially includes any muni-bond issuer that has a pension plan, whether a state, county, city, or other government unit. “
Pleasanton may indeed be able to maintain the best credit rating among California government agencies but it will only be because all California government agencies get downgraded. It is only a matter of time. From a related article: New Jersey’s Bond Rating Cut by Standard & Poor’s
“New Jersey’s bond rating was downgraded to AA-, the fourth-highest level, from AA by Standard & Poor’s, which cited the state’s growing pension and health- care obligations.
“The clock is ticking away on a pension and benefit bomb that can damage the health of the finances of our state,” Governor Chris Christie, a first-term Republican, said at a town-hall meeting in Union City today. “If we don’t show we’re going to reform this system, it will cost New Jersey.”
New Jersey is among 44 U.S. states facing a combined $125 billion of budget deficits next fiscal year, the Washington- based Center on Budget and Policy Priorities said in a report Feb. 7. Pressure to fund employee retirements will continue to have a “negative impact” on state credit ratings, Moody’s Investors Service said Jan. 27.”
http://www.bloomberg.com/news/2011-02-09/new-jersey-bond-rating-cut-by-s-p-on-growing-pension-health-obligations.html
Mary,
I agree 100% with you when you said, “One of the reasons we love our city is because of the services and amenities that the city offers. Unfortunately, there is a cost to all of that. If we are not willing to pay for it all, then something has to give. That means “ALL PARTIES” have to give. We residents may have to also “give” with less amenities. I heard a lot about “fairness” last week but nothing about what we residents are willing to give up. What are WE willing to give up?”
So what are the residents willing to give up? I as a citizen am willing to pay the price to live here. If you think your taxes are to much or don’t want to pay for these things, then move to another city that has less taxes and isn’t kept up a nice.
People, you get what you pay for. There’s a reason the Ritz Carlton is a lot more money a night than the Motel 6. You pay for the services and quality. If you can’t afford the Ritz Carlton then you stay somewhere cheaper. So if you can’t and don’t want to pay to live in Pleasanton, move somewhere else cheaper and run down like Oakland, Richmond, San Leandro, Hayward, Stockton (which was #1 on the list of most miserable cities in the U.S.) and see how long you last there.
Jeff, the point of this discussion is that public employees have not been paying for their 8% share of their generous retirements. We taxpayers are. And we don’t want to anymore. It’s not about giving up services. Why should we do that when all we have to do is get public employees to pay their fair shore towards their own early retirement.
Jeff – aren’t you presenting a false choice here?
How do you explain the fact that Pleasanton was a great place to live prior to 2002? (before the very significant increase in personnel costs primarily driven by the significant bump of pensions)
Also, Mary I do hope you realize that Pleasanton citizens have already made substantial sacrifices. It is time for employees to start making equal contributions. Do you realize that from 2002 to 2010, retirement costs were $62M more than planned? That is $62M that didn’t go into our community. I’d say this is a pretty big sacrifice.
Bart,
Remember now that the city staff and management gave this to the employees. Don’t be mad at them, be mad at the people at the top for offering.
Something else to consider, this city hasn’t cut any services yet. Most other cities have cut library hours, city hall hours and closed comunity pools. None of that has happened here. We should be so lucky.
“Don’t be mad at them, be mad at the people at the top for offering.”
We are.
Jeff,
Are you saying you moved here for the golf course? What about residents who have been here longer that maybe weren’t interested in a golf course? Do they have to move to support a rich lifestyle?
“I would like to point out, however, that COP has added quite a few new assets to the cities amenities in recent years. ”
This COP money was collected before 2002 or 2004. We have not put any money into capital projects since then because of the rising costs of employees.
At the rate we are going now, I don’t see how we will ever be able to save any money for a capital project as we have high employee benefit costs and we are in so much debt for the benefits we keep charging on our credit card.
Stacey,
I’ve been here 25 years (way before the golf course) and I’m not a golfer. I moved here from union city because of the wonderful community and feel safe. Us citizen are very lucky to live in a city like this. Many people on here keep talking about how bad things are and it will be like this for the next 15+ years. How do you know that it will go that long? Things may turn around within the next 4 – 6 years, maybe more, maybe less. It can’t saty like this forever. History as shown that we have good times and bad, always has been, always will.
Mr. Hughes, would you mind referencing the link to the Tri Valley Herald poll to which you refer? Regards.
Here’s from the Legislative Analysts Office… http://www.lao.ca.gov/presentations/2011/pub_retirement_bens/pub_retirement_bens_021011.pdf
“Problems With the Current System
•Tendency Not to Fully Fund Costs as They Accrue…
•Retiree health.
•Retroactive benefit increases.
•Excessive optimism about future investment returns.
•Defers Costs to Future Generations… Through “rate stabilization,” some pension systems have opted to defer cost increases to future years (future decades in some cases).
•Current system virtually guarantees rising cost trends for the foreseeable future.
•Inflexible Benefits…Despite the Need for State and Local Fiscal Flexibility.
•California case law very protective of benefits under the current structure.
•Often unclear what, if any, aspects of the benefits that governments can modify.
•Employers—and Taxpayers—Bear Almost All of the Financial Risk.
•When unfunded liabilities emerge or normal costs rise, employee contributions generally remain fixed. Employer costs, however, rise.
•Employer Costs Subject to Considerable Volatility.
•In late 1990s, pension systems cut employer contributions to near zero based on short-term investment gains…
•…then, increased them substantially….
•…just when governments faced their own budget problems.
•Our Defined Benefits Are Very Generous…
•…compared to those in other states.
•…compared to the increasingly non-existent defined benefit systems in the private sector.
•We Doubt That the Substantial Disparity Between Public- and Private-Sector Retirement Benefits Can Be Sustained Much Longer.
•There Are Reasonable Options to Address These Problems.
“
End Retroactive Retirement Benefit Increases.
•No exceptions.
•Benefits can only be increased for future years of service.
End Retroactive Retirement Benefit Increases.
•No exceptions.
•Benefits can only be increased for future years of service.
The poll was published on 2/5/11 in the opinion section. I have not been able to find it in electronic form but I still have my paper copy.
“Should public-employee pension benefits be reformed?” was the question. What was most interesting was that every single comment was pro-reform including the first one from a long-time public employee pensioner.
And yet we have people on this forum still arguing that we don’t have an issue no matter which facts are presented.
I’m not mad a individual city employees. Yes, I am frustrated that collectly as a union they have been so slow to recognize the problem and not offer up substantial compromises to help solve it. Hoping instead that the problem will go away or fix itself.
From my perspective, any proposal that continues to raise annual costs for the city (after the substantial increases over the past eight years) and continues to increase our unfunded liability is not reasonable and does not go far enough. Remember, we as citizens have already spent $62M more than planned since 2002.
I think the tentative agreement does have some substantial compromises, particularly with retiree health and that’s a recognition of the problem. I just also think that it didn’t quite go far enough because it looked like costs will still rise at a rate that exceeds other funding increases.
I was somewhat surprised to see the LAO suggest essentially that the cap on the employee contribution rate should be lifted. Here we’ve been talking about employees paying the full 8% and suddenly that seems like small potatoes against the LAO’s suggestion. the LAO thinks they should pay even more. For Pleasanton it would be roughly 15%. The LAO suggests that if employees and employers share 50/50 in contribution rates, employee unions would be less likely to push for increased benefits and other pension spiking practices that drive the normal costs up. They’d have an incentive actually to seek lower normal costs, which can be done by reducing benefits on future years.
So, the poll was not specific to Pleasanton, the second most financially stable city in California? It was not specific to the terms of the two year deal being offered to city employees in which they make concessions and which the city stated were sustainable and then demonstrated exactly how it was sustainable in their workshop?
And 71% of people agree with you personally, Mr. Hughes?
Do you ever get dizzy from all your spinning?
We’ll probably find out the answer to your question soon Mr Anonymous. I think you’ll find he has substantial support from the community.
FYI, last night’s Workshop presentation slides from the city are now online here:
http://www.ci.pleasanton.ca.us/services/news/?nid=986
The following is my personal analysis/feedback. Please do your own research and form your own conclusions.
All slides are interesting, but is pressed for time, look at:
Slide 8 – Shows how cost of pension payments has grown significantly since 2002. 2005-2012 rates are the highest in 27 years. Police/Fire pension contributions are in the 41-42% of salary. Unsustainable.
Slide 11 – Pension and retiree medical costs as % of total budget has grown from 3.7% in 2001 to 14.6% in 2011. That’s a 395% growth since 2001.
Slide 15 – Long Term Plan – City’s plan to keep pension costs at around 2010 levels by 2014. Reminder, there are 3 contracts. The contract currently under negotiation is the misc worker’s contract for 2 years. So this slide is more of a goal than a plan (my opinion).
Slide 16 – The famous “$290M Unfunded Liability” slide. The $121M number is using AVA method of calculation. The $289M is using MVA (this includes $40M Livermore portion of fire workers and really should be around $250M). Regardless of which number you use, the city agrees the numbers are alarming.
Slide 22 – 2009 Misc Worker’s funding status (MVA) is at 52%….80% and higher is goal.
Slide 23 – Ways to reduce unfunded liabilities.
Slides 24-42 – Overview of City’s Financial position.
The data is now on record. Thank you city management team for a great presentation.