The 411 on 911
For a while now, stewing in the background, has been the impending negotiations with the Public Safety Unions (police and fire). A full 60+% of the city’s general fund goes to these two departments. And now the city council has called a special meeting on Monday (6pm) to discuss contract negotiations between the city and the bargaining units (closed door session of course).
This is an issue that is going to get very interesting in the near future. The city is already cutting staff/services because of the economic slow down and housing decline. Contracts signed in better financial times are already becoming a strain on the budget (and don’t get me wrong, I think Police and Fire deserve solid compensation, I’m a big fan!). Negotiating with unions can be extremely difficult for public agencies/cities. Negotiating with police and fire unions even more so (who wants to be the councilperson who “doesn’t support our men and women in blue” or who “can’t understand the personal risks taken by firefighters who run into burning buildings to save our residents lives”).
A look at the City of Vallejo will give a pretty good indication of what happens when a city council continue to add more and more to contracts that represent two thirds of the budget. (hint: they go bankrupt). Retirement benefits, bestowed from on high by the state (under Gray Davis) compound the difficulties.
It’s going to get interesting.
Popularity: 11% [?]
dave
March 7th, 2008 at 7:30 am
Here’s a start:
Convert all city employees from defined benefit to combined contribution retirement plans. Small, if any, benefit in immediate short run but tremendous benefit in long term.
Lauren Do
March 7th, 2008 at 9:49 am
I think dave’s idea has merit, but insitutions like police and fire built on a pension system aren’t likely to give that up for a 401K type retirement plan.
Have there been any municpalities that have switched from a pension system to something else?
I hope I don’t need to qualify this by saying that I am supportive of fire and police services, and so on and so forth
dave
March 7th, 2008 at 10:04 am
The city can sweeten the deal by offering generous matching terms. That may cost a bit more now but it saves a TON later. The unions would be wise to accept such a deal because it would ensure the long term viability of the city. A bankrupt city’s plan probably ends up in the PBGC where beneficiaries will get 30-40 cents on the dollar.
(I say probably because I don’t know the details of the city’s pension)
Eve
March 7th, 2008 at 10:41 am
My understanding is that the new standards set by GASB 45 require all government entities to account NOW for the post employment benefits of their employees. Is compliance with that new accounting standard playing a part in this current contract negotiation?
Mike McMahon
March 7th, 2008 at 11:58 am
For those looking for background materials on public sector pensions (I focused on schools) you can start here:
http://mikemcmahon.info/pension04.htm
There have been failed attempts by the Governor in 2005 at pension reform and former Assembly Member Richman is looking to create another ballot proposition.
http://mikemcmahon.info/pension04.htm#m
dave
March 7th, 2008 at 2:37 pm
Accounting for it one thing, actually funding it is quite another…
Mark
March 14th, 2008 at 8:16 am
Mike Rich, where are you?
Mike worked in negotiating these contracts while working for the City of Oakland. When he ran for council he spoke critically ( at least to me) of the economic strain posed by the retirement packages for police and fire, while making the same qualifying comments about their importance. That was real foresight and if I were Mike, I’d toot my own horn on that one.
Maybe it was Dennis Green who had a letter criticizing the per capita ratio of police on the street in Alameda. That is always a hard argument to make in this town where to m,e part of our community identity is paranoia of crime from Oakland. Dennis likes those unpopular arguments, and it was before Iko’s murder. But I thought he actually furnished numbers for once to support his point. It’s probably a waste of time to pursue that aspect, at least until and if we start to approach a Vallejo type crisis.