Over the past few years, the County of Orange has negotiated the following post-employment related changes:
1. Retiree medical modifications in 2006 that reduced the County’s unfunded actuarially accrued liability by 71 percent, nearly $1 billion,
2. New tiers for new hires two years ago, including a hybrid plan,
3. Increased employee withholdings for the largest bargaining unit (this union was not paying anything toward pensions two years ago).
It’s great to see cities within the County now achieving similar successes. It’s also great that Bloomberg News provides an article today on the subject (the first one below).
Are these negotiated achievements enough? No. Implementing new tiers is mandatory, but it only affects new employees. It is a long-term solution. However, there is still a pig that has to go through the python, as the existing unfunded liabilities still need to be paid.
In last year’s County annual budget hearings, which occur again next week, I clearly stated that the County needs to do more. The County needs to bargain a true rollback of pensions; one where current employees go back to their old formulas (2001 for AOCDS and 2004 for OCEA, et al). This would mean that employees would have a blended formula with the higher one in place until the new one becomes effective. The change would be prospective. The employees would not lose what they have earned, but the formula going forward would be lower. This is the only real way to reduce unfunded actuarially accrued pension liabilities for municipalities. The Little Hoover Commission said as much in its report earlier this spring (see http://www.lhc.ca.gov/studies/204/report204.html). In the meantime, the alternative strategy is to make all employees pay in more for these recently enhanced benefits.
The Seal Beach Sun provides an editorial submission on the coyote topic. This is a good update and it deserves a broader distribution. It is the second piece below.
California Cities Carry Out Pension Changes While Brown Still Negotiating
By Christopher Palmeri
With little public comment and about 15 people in attendance, the City Council of Brea, California, voted unanimously last month to slash pensions for future hires and require current employees to pay as much as 4.5 percent of their salary toward retirement, up from zero.
The city of 40,000, about 30 miles (48 kilometers) southeast of Los Angeles, had negotiated the changes with its unions, so there wasn’t any objection from them. By next year, according to a city report, employees will be contributing $1 million more annually to their pension benefits.
Brea is among about 90 cities in the most populous state that have made changes to their pension plans, according to an informal list kept by the California Public Employees’ Retirement System, while Governor Jerry Brown and lawmakers wrestle over ways to lower costs. Calpers and the California State Teachers´ Retirement System listed unfunded liabilities of almost $113 billion at the end of fiscal 2009. Brea employees participate in Calpers.
“This is really a pretty momentous achievement,” Brea Councilman Brett Murdock said at the May 17 meeting. “If there’s any other city council members out there watching, I just want to say it can be done. Brea did it. I hope other city councils see this and carry the flag.”
New York Governor Andrew Cuomo proposed changes June 8 to his state’s system that would end early retirements, increase contributions and eliminate unused vacation payouts for employees hired in the future. The same day, New Jersey’s Chris Christie reached agreement with his Senate’s Democratic leader to increase workers’ contributions.
Emergency ‘Right Now’
Taxpayers who have seen local government services cut are demanding that elected officials take action on the rising costs of public-worker benefits, said Lacy Kelly, chief executive officer of the Association of California Cities-Orange County.
“For cities, the emergency is right now,” Kelly said in a telephone interview.
San Francisco Mayor Ed Lee and Supervisor Sean Elsbernd on May 24 proposed a November ballot measure that would cap pension benefits, raise retirement ages and require greater contributions from workers. San Jose Mayor Chuck Reed has proposed similar changes.
Los Angeles and San Diego negotiated agreements this year that will add employee contributions to their retirement health- care for the first time. The cities have also lowered benefits for future workers.
Brown has said that retirement costs, at 5.5 percent of general-fund spending, aren’t California’s biggest financial problem. However, with many cities paying larger shares of their budgets to employee costs, “pension reform at the local level is needed now,” said Robert Ming, a city councilman in Laguna Niguel and president of the Orange County group.
Brea contributed $8.3 million. or 8.9 percent, of its general-fund spending to retiree health-care and pensions last year, according to the city’s annual report. Los Angeles put in $710 million or 16 percent of its budget, according to a City Council presentation by City Administrative Officer Miguel Santana last year.
In a survey by the League of California Cities, two-thirds of the 296 localities that responded said they’re negotiating changes in their plans. Thirty-eight percent had increased pension payments from current employees, and 20 percent had created a new tier of benefits for future hires.
Some believe the changes at the local level, particularly lower benefits for future workers, don’t go far enough.
“It deals with new hires, and right now we’re not hiring,” said John Moorlach, a supervisor in Orange County. “The only real change you can have is to go back to bargaining units” and negotiate increases from existing members, he said.
To contact the reporter on this story: Christopher Palmeri in Los Angeles at firstname.lastname@example.org
To contact the editor responsible for this story: Mark Tannenbaum at email@example.com
News Analysis: Could Laguna Woods coyote attack happen in our backyards? Analysis By Dave Lara
It was with sadness that I read the article in the Orange County Register on June 1st, regarding the coyote attacking a senior female resident and her pet.The female resident was walking her dog when they were attacked by a large male coyote. The female attempted to fight off the coyote who was attacking her dog. As a result, she sustained bite wounds and her dog was severely injured and later passed away. Channel 5 News further reported that this was not the first incident of a coyote in the Laguna Woods area that has attacked pets while being walked by their owners. Laguna Woods residents have individually complained of occurrences with coyotes in their area. Unfortunately, city officials took no action until a resident was bitten and a pet killed. In Laguna Woods and the surrounding area, there is an abundance of wildlife that coyotes normally prey upon. Unfortunately, this one particular alpha male coyote has now gained a strong interest in domesticated pets. Laguna Woods is now attempting to trap the alpha male coyote who has been spotted following residents in their neighborhood. As more than 600 members of the Rossmoor Predator Management Team, we were disappointed that a woman had to sustain wounds and bites, then rabies shots before government officials would take action. Government has failed to provide a resource for residents to report coyote sightings, activities and pet deaths. The RPMT, through its proactive membership, has proven to be a valuable resource for Rossmoor residents in monitoring coyote activity. Team Members/Residents have furthered the value of RPMT in reporting to its membership any and all coyote activity on residential Rossmoor streets which are incorporated into monthly statistics and submitted to governmental officials. The positive outcome of collecting these statistics have proven beneficial in securing coyote grates through Orange County Public Works, and having O.C. Animal Control patrol Rossmoor for quick response. CalTrans and the city of Los Alamitos are currently working towards removing the coyote habitat behind Martha Ann as per the terms of their lease agreement maintenance clause. When coyote activity has sharply increased to a matter of public safety, the Rossmoor Homeowner’s Association working jointly with RPMT in the safety of residents, has assisted with coyote abatement through Supervisor John Moorlach’s office. It was only after a little girl was killed in Glendale in 1981 by a coyote that the Los Angeles County formed it’s Agricultural Commission that trained county employees to hunt imprinted coyotes (unafraid of humans and who see humans as potential prey) for their county. It is the hope of RPMT that no child has to be killed before Orange County establishes such a program. We realize that financially we are attempting to escape recession, but when public safety is at stake, where do we draw the line of not providing public funding to conquer an ongoing public threat while walking one’s dog on a public street? RPMT is especially grateful to the positive response received by Rossmoor Residents in enforcing coyote deterrent information. We encourage every community to establish a coyote monitoring system for the safety of their residents, their pets and, in particular, small children. Dave Lara is a founding member of the Rossmoor Predator Management Team and a resident of the unincorporated area.
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