Today, the San Jose City Council will vote on whether to take its most significant action toward changing the course of our city budget after a decade of deficits and painful cuts in services to our residents. We will vote on the final language of a retirement reform ballot measure that will go before the voters in June.
I, along with Mayor Reed and some of our colleagues on the City Council, are recommending that the city manager’s proposed modifications to the ballot measure be adopted and that the measure be placed on the June ballot. You can read our memo here.
The city manager’s modifications to the retirement reform measure incorporate suggestions that came from the city’s public employee unions during eight months of good faith negotiations, including over 20 sessions with a state mediator. The city manager’s report, along with the proposed ballot language may be found here.
Despite the fact that a number of changes have been made to accommodate union leaders’ concerns, they have not come to agreement with the city on the proposed ballot measure. Now they, along with their attorneys and their allies on the council and in the state legislature, have launched a multi-pronged effort to try to delay, obstruct or derail a pension reform ballot measure. Their well-orchestrated attacks have included a full-scale media campaign against Mayor Reed, baseless ethics complaints, a meritless SEC complaint and now a lawsuit against city employees. There are well-funded groups working full-time against the interests of San Jose’s residents, but I am confident that most will see right through the din of distraction they are attempting to create.
Some of the same people who have attempted to thwart the retirement reforms that we will vote on this Tuesday have questioned the legality of the reforms. A public legal opinion released today concludes that the proposed reforms are legally defensible and suggests that the changes proposed to the measure have minimized or eliminated many of the city’s legal risks with respect to the measure. You can read that opinion here.
Putting a pension reform measure on the June ballot is critical to restoring the fiscal well-being of our city. Whether the projection of future annual pension costs are $300 million, $400 million or $650 million, we know for a fact that these costs have more than tripled in just ten years, going from $73 million in Fiscal Year 2001-2002 to $245 million this year. Future pension projections are extremely volatile and can fluctuate with the market and actuarial assumptions, but we know that even under the rosiest of scenarios we have a serious problem.
As pension costs have skyrocketed, they are consuming an ever-greater portion of our General Fund dollars, services have been cut, 2,000 city positions have been eliminated, and the backlog of infrastructure maintenance continues to grow and now totals in the hundreds of millions of dollars. The city council owes it to the residents of San Jose to begin to restore services and tackle neglected maintenance needs. The only way that we will do this without further burdening the city’s taxpayers is through pension reform.
The city council has been discussing the need for pension reform for over two years, and in those two years alone, pension costs have increased by $100 million a year. But it has not only been Mayor Reed and I that have been sounding the alarm over pension costs, many independent voices have sounded the alarm, as well. The following reports, issued as recently as two weeks ago and going back to 2010, highlight the unsustainable pension obligations we face:
Stanford Institute for Economic Policy Research report released Feb. 26.
Northwestern University report predicting “dire outcomes” for municipal pension systems, including San Jose’s.
Santa Clara County Civil Grand Jury Report on “Unsustainable Employee Costs.”
San Jose City Auditor’s Report on pension sustainability.
The problem with our growing and unsustainable pension costs has been well-documented, and the costs were previously validated by an actuarial assessment done by one of the city’s unions — the Police Officers’ Association. We cannot begin to restore services until we get long-term structural costs under control, and the biggest pieces of this cost puzzle are those of pension and retiree healthcare costs.
The retirement reform plan that will be voted on March 6 is sensitive to many of the concerns expressed by our employees and retirees and will save the city hundreds of millions of dollars in the years ahead. To see a summary of the plan, click here. The savings produced by this plan will help put an end to the annual deficits we’ve experienced for a decade and allow us to restore essential services to our residents and begin to tackle our infrastructure maintenance backlog. The savings will allow us to invest in the technologies that will help existing city staff maximize their efficiency, improve services to our residents and create new and innovative ways for us and our neighbors to interact with City Hall.
Please join me in supporting the retirement reform measure on today’s council agenda.
So, your answer to this mess is by extorting the good, honest, hard working employees of San Jose into a plan that no one knows about?!?! The alternative for them is to stay in their current plan, but pay an additional 4% a year x the next 4 years (that’s an additional 16% of their gross annual income, on top of the 16% fire already pays, or 20% that police pays).
HOW DO YOU EXPECT THE CITY EMPLOYEES TO SURVIVE THIS?
DO YOU HAVE AN ANSWER?
This ballot measure is beyond far reaching, and it is disgraceful, you, a former police officer, would support such a matter. The unions have already sacrificed and are continuing to do so.
WHY WILL YOU NOT ACCEPT THE RETIREMENT REFORM PLAN ON THE TABLE BY THE UNIONS TO GO TO CALPERS?!?! 500 MILLION DOLLARS IN SAVINGS OVER THE NEXT 5 YEARS. SICK LEAVE PAYOUT IS GONE IN THAT CONTRACT, AS WELL AS RAISING RETIREMENT AGES.
I find it sad how you choose to omit facts and tell half truths. Your interview on Sussman today was a fine example of that. You didn’t tell him how much police and fire already contribute to their pension. You play it up as if they don’t contribute at all.
The well intentioned, but misguided voters are unfortunately going to destroy a lot more lives, and their services will continue to deteriorate, while you assist Chuck Reed in this never ending shell game of money, i.e, general fund, special fund, capitol fund, etc. Where does the 4 million dollars for the war chest the city plans to use to fight this in court come from? Voters have a right to know.
I can go on and on, but I’ve said enough. History will show the deceit and dishonesty you and the Mayor have been playing in.
Quite simply, Pete, you cannot bargain “in good faith” with a draconian ballot measure hung over your head. The City agreed to specified benefits in lieu of pay raises for many years. Now that the bill for those agreements is due, the City claims it cannot afford to pay. A contract is a contract Sir. I do not ask PG&E to lower my bill and rates AFTER I use gas and electricity.
Why would the Unions negotiate new contracts when you are so willing to not honor the one currently agreed upon? Why would the ballot language be so harsh, and then relented in the name of negotiation, when the rule is “good faith”? If you intend to negotiate to 5, you don’t start at zero or 10, you bring 5 to the table. That Sir, is good faith as the Unions do repeatedly. If you recall, during the last negotiation the City simply stated “Give back 10%, nothing less.” ALL of the Unions did so. And yet the ballot measure proceeded.
The City Council is in a PERS plan now, and discourage the rest of the City workers from joining you. In fact, this ballot language does not change YOUR benefits one iota. That Sir, in hypocritical at a minimum.
Pete, you and Mr. Reed with your majority are dishonest. A pox on you and your cohorts.
Just to be clear, I have been pushing for over a year to terminate the City Council’s retirement plan with CalPERS. The council approved a resolution of intent to terminate and CalPERS is calculating the termination costs.
I have said for years that short-term elected officials should not get lifetime pensions. They should be in a defined contribution, 401(k)-style, plan.
Pete
Just to be clear, out of all the points the posters made, this is the ONLY one you felt the need to clarify?? Not on any of the other points?
he had to go back to the chamber… you see as he slams the city workers on his facebook page for being rude… Pete thinks its ok to disrespectfully eat food and leave to go make post while city workers are talking… whos rude pete?
He sat there and answered Mr. Rocha’s inquiry with “Hell No!” In front of cameras and audience. I was so shocked and embarrassed. The nation could be watching and that is what they are going to think of San Jose. That was so rude and so unprofessional and basically gives us a little insight to the poor caliber of people who are sitting up there and making dumb decisions. Not all of them, but you know who I am speaking of.
PETE, WHY ARE YOU RESPONDING TO A POST ON SJI WHEN YOU ARE CURRENTLY IN COUNCIL VOTING ON AN THIS VERY ISSUE THAT WILL BE LIFE ALTERING TO THE EMPLOYEE’S OF SAN JOSE……. WTH…!!!!
As usual, your arrogance shines through…. whether committing fraud regarding disability or reading SJI while in a council meeting, you should be recalled….!!!
If it is so important to you why not propose a ballot initiative to change it?
You did not answer why you have not publicly identified how much employees already pay into their pensions.
One could easily argue that short termed elected officials should get NOTHING! Not even a 401K. Especially if those are already receiving a defined pension, like yourself and the Mayor.
http://www.sacbee.com/2012/03/07/4316840/lets-base-public-pension-debate.html
Thanks Pete for post just a few hours before meeting, thus no real time to review proposal. I guess this also means no one on the council even took the time to review and discuss the police and fire latest proposal. So much for good faith on your part.
Thanks the problem with you, chuck, PO and the others is you made up you minds months ago.
Thank you for remembering us taxpayers.
WE pay taxes too Keith.
Pete,
I see you are using outdated material, numbers, and audits to try and sway voters.
The simple fact is, there is no such thing as the mayor’s “opt-in”. It is a “force-in”.
If allowed to happen, I will have to choose to contribute up to 48% of my gross salary before taxes, medical and dues to your idea of a pension reform.
How am I supposed to live on less than 50% of my salary? Are you going to adjust salary to 175+K a year to make the city competitive? That is what will have to happen to keep my current wages, keep my in San Jose working, not lose my house, and “contribute” to your new idea of a pension.
Truth be told, you make me sick to my stomach. You are a poor excuse for a leader and never have, nor do you show any signs of standing on your own two feet to make an intelligent decision.
Stand up and be a man Pete. Forgo your so called disability, and i do use that term loosely, and i might change my mind about whether or not you have the spine to be fair and impartial to all city workers.
Personally I think you should allow us to vote on the PERS model and let us make meaningful change that will be mutually beneficial. The move to PERS will do the city a major favor in savings and salary saved by not having to pay for PD/FD retirement board salaries. I suppose one of the reasons why you and the Mayor do not want this move, is that it will not allow you to leverage your pet projects against the retirement fund since it will no longer be in your hands.
You, the Mayor and others on the council have yet to actually bargain in good faith as you claim. You have demonstrated yourself to all be self serving finger pointers in the midst of this issue.
Pension reform?? Yes, I support it. Unsustainable?? Questionable based upon who’s math you use. The need to be equitable to all involved?? Absolutely.
If you want the city workers to once again be proud of the city, take pride in their work, and serve the citizens well, I suggest you put in some more work to get this move to PERS done and less gum flapping.
They will all sit at their council seats and listen to public comments and act like they care. But as usual this council has already made up it’s decision, there will be no comments to change the laguage of conduct any future nogotiations.
A call for a vote will come forward and Chuck and his gang of five will win by a 6 to 5 vote.
Hell, Constant has all ready made his vote by stating “Please join me in supporting the retirement reform measure on today’s council agenda.” Pete, maybe nature will call and you will have to go to the bathroom when the vote takes place.
Sorry to disappoint, but the vote was 8-3!
Shane – how nice of you to come out from underneeath Pete Contant’s overzized petticoats, to offer yet another of your useless comments!
…A staff member for Pete Constant. Just got to take another jab and throw it out there that the vote was 8-3. You must be as giddy as a little school girl. I hope you take comfort if knowing how reckless this is, and if you thought a lot of people have already lost their homes, just wait till this goes through. Your ill will is disappointing. I hope you get cancer. There, now that I said that, how does that make you feel? It’s the same premise. I really don’t wish you get cancer. Just trying to make a point.
Wow. And you were one of the loudest accusers of the Fire and Police Departments spreading a fear-mongering campaign. Where is the figures which illustrate the wasted millions on “pet” projects you and your fellow Council members approved of? Where is the ACTUAL cost projections for the next five years? Where is the CONTRACT OFFERS from Fire and Police? And why would anyone want to interact with City Hall? Email is not good enough? You have closed-session and backdoor meetings all the time. You dont really want interaction with the public, you are quite happy having them snowed by misinformation from you, the Council and the San Jose Mercury Rag.
The biggest costs you say? You might want to retract that one, after the SEC and the state finish with the City Colonoscopy. You are in for some serious explaining.
“But it has not only been Mayor Reed and I that have been sounding the alarm over pension costs, many independent voices have sounded the alarm, as well. The following reports, issued as recently as two weeks ago and going back to 2010, highlight the unsustainable pension obligations we face”:-Pete Constant
Paid for and deliverd by The City Council. Just like the IBM Report, the numbers and information were bent to favor whatever outcome the Cities wanted. The IBM report was a sham, a farce of the highest degree. You lie about costs, you lie about efficiency needs, and you lie about projections. Why should ANYONE believe you now?
“A public legal opinion released today concludes that the proposed reforms are legally defensible and suggests that the changes proposed to the measure have minimized or eliminated many of the city’s legal risks with respect to the measure”.-Pete Constant
Another lie. YOUR OWN CITY ATTORNEY disputed the legality of these draconian and misguided measures, and the law firm representing the City of San Jose has LOST TWO LIKE CASES!!
“Whether the projection of future annual pension costs are $300 million, $400 million or $650 million, we know for a fact that these costs have more than tripled in just ten years, going from $73 million in Fiscal Year 2001-2002 to $245 million this year. Future pension projections are extremely volatile and can fluctuate with the market and actuarial assumptions, but we know that even under the rosiest of scenarios we have a serious problem”.-Pete Constant
There you go again….if $650 Million is “off the top of someones head”…that makes it accurate? A 10 million dollar SURPLUS in the City, BECAUSE of the sacrifices of Police and Fire? What more do you want to take from them? As much as you can get away with? I seriously doubt the public wants to see what you propose, and your being here on this board shows you are worried. I would be too, with all the lies coming from your office, City Hall and the Mayor.
“Despite the fact that a number of changes have been made to accommodate union leaders’ concerns, they have not come to agreement with the city on the proposed ballot measure. Now they, along with their attorneys and their allies on the council and in the state legislature, have launched a multi-pronged effort to try to delay, obstruct or derail a pension reform ballot measure. Their well-orchestrated attacks have included a full-scale media campaign against Mayor Reed, baseless ethics complaints, a meritless SEC complaint and now a lawsuit against city employees. There are well-funded groups working full-time against the interests of San Jose’s residents, but I am confident that most will see right through the din of distraction they are attempting to create”.
Sounds like someone is in need of a diaper change. I would be worried too, if I were you. All of the misinformation and posturing ON THE PART OF THE MAYOR AND YOURSELF is finally being noticed by the State, and, hopefully, the Feds.
I am a resident Mr. Constant, and I dont feel attacked by my own Fire and Police Department. I do, however, feel misrepresented by you and your caterwauling about the lawsuits and complaints filed against you and the Council. If they are meritless, then let them be heard. We do, after all, live in the United States of America. We have the right to call into question what our “representatives” do with their allotted time in office. It is going to be VERY interesting when the State finds out that your salaries come from the General Fund…..I wonder what else does? Stay Tuned!
They will get a say when everybody knows what the TRUTH is. No employee is saying that pension reform is not needed. We just want it done, legally. Until that time, we will fight, tooth and nail for what is right and what is just. Once the truth is in place and the illegal issues are take care of…we can move forward. If the Feds have to come in, then so be it. Maybe they will take a look at how you are able to collect a City disability paycheck while working for the City and collecting a separate paycheck. Just maybe the Feds will look in to how you all sit on all of the boards. There are no checks and balances. Let’s see what happens before we move forward. The citizens have a right to the truth. The citizens have a right to make an informed decision. Anything less than that is fraud.
I would really like if someone got the feds or state involved. maybe one of our brothers in PD who knows how to get the ball rolling in that direction?
There is a post in one of these pension threads that provides the contact info for the feds. I’m sure they will get an “earful”.
Hope this helps. Skip to the bottom of this post for FBI info.
Santa Clara County District Attorney’s Office
Public Integrity Unit
70 W. Hedding St., West Wing
San Jose, CA 95110
Email: [email protected]
Phone: (408) 792-2595
———————————————-
CA Department of Justice
4949 Broadway
Sacramento, CA 95817
(916) 263-4887
ag.ca.gov
————————————————
Federal Bureau of Investigation
Public Corruption
450 Golden Gate Avenue, 13th Floor
San Francisco, CA 94102-9523
Phone: (415) 553-7400
Fax: (415) 553-7674
E-mail: [email protected]
Corruption Hotline
(800) 376-5991
Mr. Constant-
One question for you: Would you vote to put this measure on the ballot if it was going to affect your own disability pension from the San Jose Police Department?
That when a government agency reduces or takes away an employee’s benefit, they are required to provide some benefit that is comparable. The City has not met that requirement and is thus in violation of that law.
Pete,
You sir are the biggest hypocrite of them all! You get a PD disability retirement but are able enough to hold down a full time Council position? I guess a desk job would have been impossible? Double dipping at its finest brought to you by the very one who is supposedly against waste!
You obviously have no credibility or integrity.
From the legal opinion linked to by Mr. Constant we find the crux of the City’s case: “But the Charter does not address the payment towards pension plan unfunded liabilities.”
Behold the slimy wheels as they turn: because the Charter doesn’t address unfunded liabilities, the City proposes to use what isn’t mentioned in the document to screw over those foolish workers who actually thought that a contract meant something.
Ah, the legal loophole—the last refuge of scoundrels.
But not so fast. Let’s first examine the historic relationship between the fund’s contributors and its balance sheet. As it is with any such fund there exists only three states of fiscal soundness: underfunded, fully-funded, and overfunded. And since it can be safely assumed that all of San Jose’s various retirement funds have spent some time on both sides of the balance line, we find that history, in the form of past practices, can do much to clear up that which is not addressed in the Charter. What we discover is this: while there is no historic link between the fund’s performance and an employee’s obligations as a contributor (i.e. employees contribute fully in good times and bad), the link between the fund’s performance and the City’s contractual obligations has historically been one of cause and effect (i.e. the City’s pension contribution is directly linked to the fund’s current state).
Using the public safety pension fund as an example what the record shows is that on numerous occasions the City has used the fund’s balance sheet to:
—reduce its contribution to the fund
—free itself from contributing altogether, and/or
—offer pension enhancements in lieu of salary increases (tantamount to spending pension dollars to fund day-to-day operations)
Not only have all three of these actions played a part in bringing about the current pension mess, but that the City has regularly opted to exercise them demonstrates the unique nature of its relationship with the fund balance. The responsibility for “unfunded liabilities” may not be specifically addressed in the Charter but it is written all over the history of the fund (and the City’s annual budget). Go back fifty years ago to the fund’s creation and the evidence couldn’t be more obvious with a chalk line: the City of San Jose—banking on the risks being outweighed by the rewards, structured the fund so that it would pocket the excesses of the short-term, while granting the employees the after-retirement promise of long-term growth. Employees weren’t part of the short-term equation when times were good, and aren’t now when times are bad.
The loophole being claimed here, the opinion upon which the City is risking a fortune in legal fees, is nothing more than the sum of a law firm’s billable needs and a City’s loss of direction. Nice try? Nah. Pathetic.
But what of the retroactive pensions that blew a $70 million hole in the pension fund and will continue to add more to the unfunded liabilities in the future? These liabilities were not funded because they were retroactively-applied. Also, every time the pension funds don’t meet the Trustee’s optimistic projections, more liabilities are created. Should you be burdening future employees and the taxpayers with these costs?
10-36
Please elaborate on your comment. This great information to be shared with the legal staff for all eleven bargaining units. Pls share, freely and widely…
You are a fraud. As many of your colleagues have told me, you were never a real cop either, hence the disdain for the honorable people still doing the job.
Go ahead and vote for it Peter, but don’t cry when your taxes go up to support the losing court battle.
Don’t forget your fraudulent disability claims when investigators want to know why you’re on video wrestling with kids and riding bikes. (perhaps your disability is mental and not your “broken back”)
Why do you believe that inquiring into where the 650M figure came from is problematic. I think many are curious if it has any basis and if the Mayor knew that it was not based in fact if that turns out to be the case.
I thought the City had a sunshine policy. Maybe that does not apply if it appears the Mayor will be caught lying for his political agenda….
An absolutely excellent and logical essay, Pete…and sure to infuriate the whiners who either cannot understand logic, prefer to bury their heads in the sand, or are intellectually dishonest. I am a City employee and I would love to keep the pension plans are generous as they are, but I also want to make sure that the benefits I am earning are still there for me when I (God let me live so long) am long since retired.
Further, I want to say that I appreciate the tone of your essay. You don’t stoop to the vicious and hysterical approach of those who are afraid of facing the real world—even when they make snide and less than forthright comments about the pension benefits for those on the City Council.
We all want the pension to be solvent. And we are willing to scale back to do so. The ballot initiative is WAY TOO far reaching. You mean to tell me you can fork out 36% of your gross annual income (not including medical, dues, etc.) and still make ends meet?!?!?! Where does all your disposable income come from. I sure don’t have that, and I live within my means. My kids go to public schools. We don’t take lavish vacations. I live in a humble neighborhood. Give me a break. I highly doubt you are a city employee.
I highly doubt it. Sounds more like something PLO would write.
Wow Pete-you really impressed me at the city’s council meeting today with your response to Councilman Rocha. What impressed me was how could anyone like you be elected for that position? You are unbelievably rude, insulting, unprofessional, stubborn and you come across as uneducated. I am embarrassed for you, any valid arguments you may have had were wasted when you opened your mouth.
All that and he had time to post on FaceBook during the meeting. Glad he was intently listening to the comments during the sham “public” hearing.
Just thought this was interesting and related to this discussion:
Judge rules Florida pension changes unconstitutional
By Mary Ellen Klas, Times/Herald Tallahassee Bureau
In Print: Wednesday, March 7, 2012
Pete, Once the voters pass your ballot measure, how are you going to be able to retain current police and recruit new police to your city? SJPD is one of the lowest paid agencies in Santa Clara County eventhough their hiring standards are alot higher. And once the ballot measure passes they will have the worst benefits packages in California. How will you attract the best and the brightest to protect the people you represent and your family with non-competitve pay and benefits?
//////////“will san jose voters finally get a say on pension costs”//////- what a crock BS title Pete. How about giving a “say” to voters about ridiculous city purchases (ie: new city hall/ mex heritage plaza/golf courses etc). How about giving voters a “say” about ridiculous sales transactions the city has participated in (ie: sale of land for pennies on the dollar to Wolf in a time of “fiscal emergency”). You can’t have it both ways Pete. If you are asking voters to have their “say” on a topic that fits your agenda, then give voters their say on every major fiscal topic. Grow up! Im ashamed to be a SJ tax payer right now. Don’t you dare foot the bill to me when this city is sued over this pension debacle.
2 other idiots drank the cool aid, point is why did anyone even bother to show up. Chuck had his votes.
When I had to work council secirity we were told ahead of time of the vote in case the crowd might riot. This has been going on for over 20 years.
@Shane Patrick Connolly
You ask about “retroactive pensions.” From this I assume you are referring to those occasions in which City negotiators (where “the buck” always stops) agreed to grant an enhanced pension benefit to the already retired (an example would be when the cost of living adjustment was changed from a convoluted formula—involving “banked” increases with a 3% max—to a simple 3%).
To view such a case as an increase in today’s “unfunded” liabilities is to do exactly what Chuck Reed wants you to do, which is to view each and every component of a dynamic system (that performed exceptionally well for over four decades) through a lens that blocks out everything but the crisis of the moment. Employ such a perspective on the housing market and everyone who bought a house just before the crash looks today to have been unwise and irresponsible. Use it on the stock market and the guy who cashed in his Apple stock when it doubled to $40 (8% of it current value) appears today to have committed an idiocy.
In the year 2000, when retirees were included under the new 3% formula the pension was fully-funded (i.e. zero liabilities), the economy was booming, concepts like the “livable wage” and “comparable worth” were politically popular, and the City was no doubt anticipating additional opportunities to do as it had done in previous boom times: forego its annual fund contribution. In short, the political and economic climate were markedly different than today. Changing the cost-of-living formula was a good bargaining chip, the simplification of its administration made sense, and, best of all, given the way the fund’s portfolio was performing, the change was unlikely to ever cost the City a dime.
Take note of the last point. Overlooked in pension discussions is this simple fact: the system was structured so that pension monies paid out would, in large part, come from profits from the fund’s long term investments. For instance, when the cost-of-living change was made the fund’s holdings were more than 30 times the dollar value of the City’s annual per employee contribution, this despite considerable inflation and the fact that the average employee had been in the system less than half that time. What this means is that virtually every retiree receiving the enhancement you referred to as “retroactive” was living off of the fund’s investments, not the City’s contributions.
The strength built into the system’s structure has also proved to be a weakness when put in the hands of politicians who, like home owners who spent their equity on luxuries, used the growth potential of the fund to buy friends and build political power. They did some real damage. Of course politicians have stopped doing that, now that the cupboard is bare. Oh, they’re still out there buying friends, but today the potential they’re spending is the anger and resentment of a public struggling with ruined economy.
Sounds like they got you.
This quote from the Stanford study (link in the article)says it all: “SJPFRS meets the minimum 80 percent funded benchmark.” That is the San Jose Police and Fire Retirement System is properly funded.
Even the Northwestern report projects that it will not be until 2024 that SJ will not be able to meet its unfunded liability obligations. So why is the City forcing the unfunded liability to be paid by 2015? Why not amortize it over a longer period so the hit is not so objectionable.
Why has Mr. Constant not provided a link to the March 2 proposal submitted by the unions so the citizens can readily see the compromises offered and rejected by the City which would avoid litigation?
Why is there no side-by-side comparison of the savings of each component of each of the proposals?
Why did the City tell me that it could not provide me with the savings the City would reap simply by raising the retirement age? If it has not identified the savings of each component how can you trust any of the numbers?
If raising the retirement age cures social security why not this problem?
Finally, it appears a first year associate wrote the legal opinion. If the City wants to rely on what is an inadequate, superficial examination of the law it is doing so at its peril. The citizens should demand a refund for whatever it paid for that opinion.
Facts: 1) SJPD and SJFD already pay 50% of their retiree health care costs. It is not free.
2)they have historically paid between 10-15% of their salaries into their pensions. This is in addition to the 10% pay cuts they agreed to take. How can some cities be fixing their pension problems by asking employees to begin to pay a small percentage of their pension costs and yet in SJ they already pay way more but are apparently in dire straits. It begs the question of where the real problem is and has been.
3) Have a pension plan that is 84% funded which is considered stable and funded. The Stanford study from February that Chuck Reed points to says this.
4) The fund had returns of 18.1% for 2011. The average over 2009-2011 was 3.5% but those were the worst years. Thus, when looking at the long term earnings, which is needed as people have long careers and are not all retiring tomorrow, the projected returns are readily achieved.
5)The fund had a net increase (after expenses) of over 372M in 2011. If it can do that in one year, the unfunded liability is not so ominous. The fund only paid out (in total deductions including admin expenses) 140M.
These facts are found here:
http://www.sjretirement.com/Uploads/PF/City of San Jose Police & Fire Department Retirement Plan CAFR 2010-2011 Final.pdf
Why does the union and MN not publish this. Well MN I understand, thry hate the unions.
What’s sad is Pete and the rest of the council clowns don’t have any accurate figure on retirement costs. These are the same financial wizards who spend taxpayer money the same when in deficit or surplus budget years. They’re already arguing how to spend the $10 million “projected” surplus knowing that the check isn’t even in the mail yet. Maybe Pete can tell us why the retirement fund wasn’t funded to meet future costs including inflation? Waiting until the last moment to figure out you don’t have the money to pay for a contract after the service has been completed is legally called fraud. Pete, when our family has a $10 million dollar surplus we don’t go on a spending spree, we put it in the bank.