I attended Tuesday's City Council meeting with the intention of commenting about an agenda item submitted by the Mayor and Councilman Ewin. The item had to do with establishing a new pension plan for new hires. The motion was tabled - so I didn't have the opportunity to comment - but here is what I would have said.

I'm here to heartily support a recommendation made by mayor Madrid and Councilman Ewin for maintaining financial stability in La Mesa -- consideration of a two step pension plan for city employees. I consider that a "must do" objective in ongoing MOU negotiations. It is a must do to lessen our future budget risk. It is also a must do to allow us to pay down our unfunded liabilities, to build our reserves, and to again manage without the six million dollars of excess taxes provided by proposition L when it expires.
However, even were the City in a strong financial position, I would urge a second (lower) tier pension program strictly on the basis of fairness. While I am certainly not opposed to providing pensions for City employees, they should be somewhere in the ballpark of what the taxpayers, who continue to foot most of the bill for pension costs, can expect to receive. Maybe more important, taxpayers bear all of the risk when contributions previously made are insufficient. Looking at what has happened with our City pensions in the past few years provides a good example of the unfairness of this arrangement. The taxpayers made 100% of the pension contribution to CalPers, who had total control over how that money was invested. When investments were good, a decade or so ago, our City increased already very fair, even generous, pensions by 50%, retroactively! Now when the CalPers investments aren't supporting those over the top pensions, taxpayers are required to increase payments to make up the difference. The unions treat those recently increased and over the top pension programs as if it were a god-given birthright. There is nothing fair about that.
If we had a defined contribution plan, with the City contributing about what most private sector employers do -- I think somewhere around 10% of salary each year -- I would care less that Dave Burk (our recently retired fire chief) will receive $142,342 in pension payments each year, for only 30 years of work, at 50 or so years of age - AND GUARANTEED FOR LIFE BY TAXPAYERS. I wouldn't care if he made twice the $142,000. He would be responsible for his investments. If he took a flyer and made money, more power to him. It is when the taxpayers are stuck with most of the burden and all of the risk for overly generous plans that I get upset.
Consider our non-safety employees - they can retire after 40 years of work (which I think any reasonable person would have to agree is on the low end of a normal working career in this day and age) with 120% of final years salary. When they mature enough to reach Social Security age, they will receive another 30 percent or so! A pretty good average of what financial planners say is enough to maintain lifestyle is 75 - 80 percent of salary. Why does our City require taxpayers to support a pension plan that can easily provide 150% of salary? Could it be the raw power of public sector unions?
A second tier pension program is both the financially responsible and fair thing to do - ad it needs to be done now. I hope that our council will have the courage to stand up to the City's employee unions and make this change.

Views: 49

Comment

You need to be a member of La Mesa Today - Community Website & Online Newspaper to add comments!

Join La Mesa Today - Community Website & Online Newspaper

Comment by Kevin G George on May 3, 2010 at 4:02pm
Well done Russell , I agree completely .
I hope to hear you deliver this at the next Council meeting , regardless if it's an agenda item .
Comment by Steven S. Kane on April 30, 2010 at 2:18pm
We need to know when this will re-appear on the Council agenda. You should not have to speak on this important matter by yourself. The Council members should be aware that there are more than a few citizens who will hold them accountable and insist that they act in favor of the citizens rather than public employee unions. The choices made as to public pension reform will affect the ability of the City to provide vital services for years to come.
Comment by Russell Buckley on April 30, 2010 at 1:00pm
Thanks Craig and Steven for the positive comments. It is nice to know that I am not alone in wanting to see pension reform. Our Council members will surely receive pressure from the unions to retain the current pensions. So it might help our Council members to take a tough stance in the face of union pressure if they know that I am not the only one who believes that a revised pension program is a must do for this year's MOU negotiations.
Comment by Steven S. Kane on April 30, 2010 at 10:53am
I join Craig in thanking you for your accurate and incisive post. A great part of the severe fiscal crisis now hitting local governments is due to overly generous defined benefit pension plans which place all investment risk on taxpayers. Vital services now must be cut in order to cover the huge unfunded liabilities resulting from employee union success in packing city councils and district boards with their supporters. Your efforts are helping voters to wake up to this looting of local government. Public employees deserve fair compensation, but not pay and benefits far in excess of what is available in the private sector. Your proposals make good sense!
Comment by Craig S. Maxwell on April 30, 2010 at 7:30am
Thank you again, Russell, for spearheading this issue and helping to set things aright. Doubtless we'd be even closer to a satisfactory solution if our elected "leaders" had been doing what they're supposed to be doing--i.e., representing the interests of the People--before this became a crisis. In any event, the time and talent you've devoted to this matter is greatly appreciated.

La Mesa Weather

HousingWire

La Mesa Photos

  • Add La Mesa Photos
  • View All

La Mesa Member Videos

  • Add La Mesa Videos
  • View All

La Mesa TODAY is news intended to promote the betterment of La Mesa and its nearby neighborhoods. We want members who share this goal.

© 2019   Created by La Mesa Today.   Powered by

Badges  |  Report an Issue  |  Terms of Service