Editor's Note: These are the notes Tom MacDonald used when he spoke to the Novato City Council on July 17 to protest the agreements reached between the city and its labor unions. The City Council unanimously approved the contracts at Tuesday's meeting.
These tentative agreements should not be approved. The progress on pension reform is woefully inadequate.
In a letter on March 13, 2012, the Novato Citizens for Pension Reform asked for six specific items to be addressed in negotiations.
The only item of the six on which progress was made was the elimination of pick-up of the employee contribution amounting to 7 percent on safety and 5 percent on Miscellaneous employees. Yet the “savings” were offset by salary increases of 5.25 percent and 3 percent.
This agreement amounts to an annual net savings of only $400,000. Savings without a salary offset would have been more than $1,030,000. Yet, with savings of only $400,000 the staff memo is trying to convince us that a significant dent has been made in the City’s ongoing budget problem. This is lipstick on a pig.
In fact, with yesterday’s announcement that CalPERS made only a 1 percent return in the recently ended fiscal year, we can expect future pension expense to increase yet again. A good portion of the $400,000 savings was probably just wiped out by this investment shortfall.
On the other five items in our March letter, no progress was made in this 2012 negotiation. The can was just kicked down the road again.
Historical Perspective
In July 2010 the Gang of 12 requested progress on a number areas in the 2010 negotiation: reduced pension formulas, elimination of pick-ups, changes in final compensation formulas and elimination of excessive longevity steps.
Negotiations in 2010 were only partially successful. But 10 of the 12 Gang members agreed to support the Measure F sales tax increase. We made this decision with some reservations. Our letter in September 2010 stated:
“City Council members and City management have indicated that they will continue to address pension reform. Normally, we are skeptical about promises in the political world. But, in this instance the Council, management and employees have earned a substantial degree of trust as a result of the recent significant budget cuts and the first steps in pension reform."
Now, after these current 2012 negotiations, it is clear that the existence of Measure F funds has eliminated the sense of urgency for pension and compensation reform. We have to conclude that Measure F actually played a role in the disappointing results of this negotiation.
I now personally regret my decision to endorse Measure F back in 2010.
What Next?
It is now clear that the needed long-term reform will not be achieved through the bargaining process.
I believe it is time for Novato to go to the ballot box. Labor negotiations two years ago and then again this year have failed to produce satisfactory results. It’s time to go to the next level.
A number of us are giving serious consideration to two ballot approaches:
- A pension reform initiative modeled after San Diego or San Jose that passed by convincing margins, plus
- Repeal the remaining years of Measure F, Novato’s five-year half-cent sales tax increase.
Citizens get it. They are tired of supporting excessive pensions with increased taxes. We believe both measures will have an excellent chance of passing.
It is times like this when the voters need to reach out and talk to everyone. Local governments do matter - and the debacle of the Novato City Council is a perfect example. Since the terms of the council members are staggered, only two can be changed at a time. These people need funding too. We now live in danger of an insolvent city government, possible bankruptcy, etc. - all because we "elected" people without thinking - people who are far more harmful than good. The candidates say things during election time, and we vote for them without much thought. Again, I am just as guilty as the next person of doing this. But we have to stop doing it. Last election we elected a 30 year old to the Council. What possessed us to do that? How could anyone 30 years old have the wisdom and foresight to make the hard decisions needed during these times? Why on earth did we vote in a sales tax increase? It makes no sense and obviously kicks the can down the road. Yet we did it. Perhaps the political scene here needs to get more serious. What we have done to date isn't working.
Base…..OT……Other…MDV………..ER………...EE………....DC….....Misc…TCOE $66,430..$0…$5,137……$12,950….$21,192……$4,489……$0…….$0…$110,198 Tiburon Fire Dist…Valentino, Sloane…..Captain/PM Base…........OT………Other….....MDV….....ER….......EE…........Misc…TCOE $105,788…$14,073….$23,466…$19,992…$26,289..$12,704….$10,706…$213,018 Marin County Fire Protection Dist.Brown, Mark E…….Fire Operations Battalion Chief Base………OT…Other…...MDV……ER………EE……DC……Misc…....TCOE $146,328…$0…$39,993…$17,071..$50,087..$303……$0……$2,509…$256,290 Corte Madera…… Davis, Peter Battalion….. Chief Fire Base……..OT……...Other……MDV……ER….......EE…........DC…..Misc…..TCOE $142,059..$29,780..$1,608….$19,546….$59,028..$14,255....$0…$2,652….$268,928 Southern Marin Fire Protection Dist….Barnes, Matthew….Battalion Chief Step 2 Base….......OT……..Other…....MDV…..ER……....EE……...DC……Misc……TCOE $121,368..$41,825..$25,132...$21,048.$72,437..$12,255…$4,879...$3,524..$302,469 Novato Fire Protection Dist…..Nickel, Eric… Deputy Fire Chief Base…......OT….....Other…...MDV…….ER…….....EE…......DC…….Misc…...TCOE $163,495..$11,791.$67,837…$20,976…$105,852.$27,505.$6,529.$3,675.$407,661 http://www.mercurynews.com/salaries/bay-area/2011
If you look at the chart I was pointing out the comments made by Dick Spotswood in his recent column in the IJ that Novato's fire district has the highest paid employees in Marin. I used the salaries of other comparable districts to show the difference is substantial. I only posted the highest salary from each district. I was not saying that Firemen deserve less credit for the work they do but that we must look at the salaries and pensions of all public employees in order to tighten out belts.
"The best defense of democracy is an informed electorate." Thomas Jefferson Commenting on salaries is not an attempt to undermine the work of the fire department. Showing the salaries and the additional compensation (if you use the link you will see that it includes overtime, other, medical, employer and employee pension contributions, deferred compensation and miscellaneous) is an attempt to inform people how much we pay in our district as compared to other districts and how many people are receiving top pay. Like it or not every public job deserves scrutiny when we no longer have the ability to cover costs. That is why we have four cities in bankruptcy with seven more threatening the same. We have to ask these questions if we are going to remain solvent. http://www.marinij.com/opinion/ci_21072921/dick-spotswood-novato-firefighters-get-marins-biggest-public "FOLLOW THE MONEY" is a good rule that often leads to revelations. "The IJ's website listing compensation costs of Marin County public agencies' employees is a treasure trove of data many would prefer not be in the public domain. Who would have suspected that a Novato Fire Protection District firefighter would top the list of Marin's highest compensated employees with a package costing $407,661? Eight of Marin's top-10 highest remunerated public employees are firefighters. Of those, seven are senior members of the fire district."
"With us now is Stockton's mayor, Ann Johnston. She's been in office for four years and previously served as a city council member." "MARTIN: Stockton has a $26 million deficit for the current fiscal year, and as we mentioned, half a billion dollars in debt. Now, I'm sure this is a complicated story, but as succinctly as you can, can you tell us how it got to this point? JOHNSTON: Well, it took a number of years to get to this point. In the '90s, very generous salary and pension benefits were given our employees. They were negotiated as part of union contracts. There was money to do that at that time, and most cities in California were giving very generous salaries and benefits to particularly public safety employees, police and fire."
"JOHNSTON: And then in the early 2000s, we had a great housing boom... We were just building homes, subdivisions.. year after year, major revenues coming in through property taxes and developer fees and all of that. And the city fathers .. started spending quite lavishly... But what really hit us hard was the collapse of the housing market, because in 2007 the bottom fell out, and it just wiped out our property tax revenues and our developer fees..." MARTIN: So you can imagine some of the reactions to this circumstance have been very emotional and intense. For example, the health insurance benefits for retired city employees were cut. I'm talking here about steps that the city's already taken to try to get ahead of this crisis. So - and you've already cut about $90 million in spending, including eliminating 25 percent of the police force. How is the city reacting to these cuts, to this point? Many people are saying that the quality of life in the city has already deteriorated. Do you think that that's true?" JOHNSTON: Well, it is, to a certain extent, because over the last three-and-a-half years, we've had to make these drastic cuts just to balance our budget. And so we've made over $90 million in cuts to our general fund budget already. So this year, we were faced with this $26 million gap... We have to figure out how to move forward and get ourselves financially sound again.
It goes both ways, Tina. I'm all for putting a cap on pensions.As well as a cap on Patch posts.
"Stockton, Harrisburg, San Bernardino, Vallejo, and other municipal bankruptcies reflect years of Wall Street fleecing America. Crooked bankers transformed America into an unprecedented money making racket. " Now, I don't necessarily agree with this article or anything on Indybay for that matter, but it is an example of how some folks think. Pensions get the bad press but Wall Street gets let off the hook.
http://reason.com/archives/2012/07/20/california-goes-bankrupt "Stockton negotiated the new process created by a state law requiring a 60-day period of negotiations before filing for Chapter 9 bankruptcy. That period is over and the city—a hard-pressed port on the edge of the California Delta—has become the largest city in the country to pursue municipal bankruptcy. The cause was a pension system eating up 30 percent of the budget, an absurdly generous retiree medical program, and excess bond debt for pension obligations and redevelopment projects."
I never said that pension reform alone would solve all the problems facing us. I gave you information from the Mayor of Stockton describing her perception of what led to the city's bankruptcy. If you had read my other posts you would know that I don't support housing without a tax base or the costly downtown office project. You and I differ on the charter. If you read how they are formed the fiscal and academic accountability is much stricter than traditional public school so with those guidelines I believe the curriculum is worth the effort to create this charter. As for social programs, welfare and government assistance we have been cutting those budgets for years. When I first began working in Marin we had far more resources for needy families and seniors than what exist now. I am grateful for non profits like Gilead House that have chosen to take on the responsibility for helping by relying on their own resourcefulness. If you don't think pension reform is needed what do you think we can do to pay our future debts?
California in general has become nuts. We have income tax rates as high as 10.3%, sales tax rates higher than most states, and now the state wants to raise taxes another 3% at the top tiers, and all the cities and counties keep on tacking more sales tax. What makes this city and state so special as to spend money like this?
Who do you know in the private sector who gets the kind of retirement deals our public employees get? I worked in Silicon Valley for years and never saw anyone get a dime other than the large company major players. Everyone else got to contribute to their 401K. Most of the baby boomer generation can't afford to retire. That is not nearly the case with people from the public sector. It's easy to tax people, it's hard to control your spending. It's epidemic all around this country too.