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Paul Walters (photo by Chris Prevatt)
Mr. Paul Walters, who now stands astride our county seat of Santa Ana like a colossus as both Police Chief and appointed City Manager, gets a starring role in an LAT piece that just came out this very second, regarding several cash-strapped cities’ intention to demand that their employees begin paying more toward their pensions.
To summarize, Santa Ana, which has a Grand Canyon-sized $300 million deficit (which a certain local blogger blames completely on some guy named Dave Ream) and had to pay over $11 million in pension costs for its employees last year while letting workers go left and right, is looking to follow Governor Brown‘s suggested forumula that workers begin to pay 8% of their paychecks to their own retirements, while the cops and firefighters, who have better pensions, should pay 9%.
These workers, naturally, feel like they’d be taking a pay cut by agreeing to that, as the City’s covering of those pension payments was originally a negotiation to compensate for pay raises the City couldn’t afford. But as Colossus Walters sorrowfully pronounces to the Times, “The here and now is employees will have to pay more for their retirement. And that’s the future too.”
I don’t follow all this enough to have much of an opinion one way or the other right now, but it sounded like a story that a lot of you would like to argue about here. And thanks to the anonymous tipster who sent me the link, so that we could have this OC Blogosphere scoop before all those other bastards! …
The free ride is over.
Now they need to find a way to make the current retirees chip in for the big part of their pensions that were not funded at retirement.
Since future retirement contributions to cover prior retirement obligations, are part of current and future labor negotiations, the unfunded parts should be on the table too.
It is not likely the city can cut the retirement benefits of existing retirees or successfully demand any kind of concessions from its retirees – the courts have ruled that once government employees retire under a given retirement plan their benefits are a vested right for life (in fact some rulings actually say the benefits are a vested right the day they are hired).
It is a different story for current employees, though any change in costs to the employees is subject to collective bargaining. Eventually, the city can get its way if it has the guts to stick to its plan to increase employee costs, but it will take a strong Council willing to go to impasse in negotiations and then order the change implemented without a union agreement, and probably endure litigation too.
As for blaming Dave Ream for the city’s financial ills, unless he concealed the details of the city’s deteriorating finances from the Council (something that might be even criminal), it is the Council and especially the City’s long term Mayor that should bear the responsibility for the apparent financial morass that now exists.
As to Mr. Walters, he may be the City’s current hero and perceived to be a jack of all trades, but he would be wise to bring in outside fiscal and labor relations experts to help on this one.
I hesitate to ask this, but: does Walters himself receive a pension — or two? How would this change affect him and other highly placed Santa Ana officials?
Walters retired a few years ago and then came back, I don;t know if he had to pay back the years worth of pension payments he got. So I think his retirement pay is fixed and certain, and being temp city manager will not change it.
“It is not likely the city can cut the retirement benefits of existing retirees or successfully demand any kind of concessions from its retirees ..”
Oh really …?
And what happens when there is no money left?
Bankruptcy
Skally – as the City of Vallejo found out, bankruptcy is not a viable option either. Overall, it is a dilemma, I agree. I still see hard nosed negotiations by the City Council, leading to Impasse and then imposition by the Council on cuts to wages and benefits, as the best avenue that is available. Some of the Council members may have to stop devoting time to their candlelight vigils and other fluff and start managing and taking heat to make it happen though, and one has to wonder how likely that is.