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Santa Rosa council debates speed of pension overhaul

By KEVIN McCALLUM
THE PRESS DEMOCRAT

A report on options for reining in Santa Rosa’s soaring pension costs sparked a vigorous City Council debate Tuesday, with some members urging faster action while others expressed comfort with a more deliberate approach.

The 21-page report of the 12-member Mayor’s Task Force on Pension Reform contained several options for consideration. They include implementing a “second tier” of lower benefits for new workers, increasing the retirement age, increasing employee contributions and taking out pension obligation bonds to pay for the rising costs.

But it was the speed of the reforms that generated the most debate. When City Manager Kathy Millison suggested the council schedule a more in-depth discussion for the fall, Councilman Gary Wysocky said he was “very disappointed” with the pace of the process.

“I have a problem with that time frame,” Wysocky said. “That seems like a long time to not address the situation.”

Some council members suggested the city needs to wait for the state Legislature to act or for a revision of the city charter to go before the voters, but Wysocky argued that most of the changes outlined can happen now if council members “have the political will to negotiate a better deal from our employees.”

“I don’t want to take away anyone’s benefits, but I don’t want to see the city go insolvent either,” he said.

Councilwoman Susan Gorin said she, too, wanted the council take a more aggressive approach, making some decisions soon and then getting on with the “hard-core” negotiations with employees.

“It’s going to be tough for this council and this city to figure out a way forward,” Gorin said.

Mayor Ernesto Olivares and others said the problem is a long-term one that will take thoughtful solutions in collaboration with employee bargaining units.

“It’s not lightning speed, but we’re going as fast as some limitations allow us to move along,” Olivares said.

The mayor said a main goal of the task force was to educate the community about the complex issues surrounding pension reform and to gather some facts that will help the council decide how to proceed.

“Nobody expected a silver bullet to come out of this because it just wasn’t there,” Olivares said.

Millison said the best next step would be for staff to return to the council with projections for how much each option might save the city. She suggested returning the issue to the council in September, noting that the city’s financial analysts remain busy with budget issues and that summer is a common time for vacations.

Councilman Scott Bartley said that time frame shouldn’t be a problem because “we are not falling off a cliff” from the financial consequences of steep rises in pension costs.

The city’s pension actuary, John Bartel, seemed to support that characterization. He said the city’s $100 million unfunded pension liability continues to grow because the city’s contributions aren’t keeping pace with the increasing costs brought on by a combination of generous benefits and stock market losses suffered by the California Public Employee Retirement System. He said the city is not in danger of insolvency.

But Bartel also said the council is going to have to make the “really hard choices” about how to fix the system. “There is no low-hanging fruit that is easy to achieve that gets you to significant short-term budget savings,” he said.

He said only one of the 10 options laid out in the report helps the city significantly in the short term: making employees pay a greater share of their pension costs, he said.

But that option might not be acceptable to some council members. John Sawyer said the city needs to look at other solutions beyond just concessions from workers, such as raising additional revenue or saving money through reorganization of city services.

“We cannot do it expressly on the backs of the employees,” he said.





20 Responses to “Santa Rosa council debates speed of pension overhaul”

  1. GAJ says:

    @SelectiveRage:

    Be a bit more selective; your rant about State spending, (with no sources I might add), has nothing to do with the Pension debacle we’re facing in the City of Santa Rosa.

    You know know the article is about the City of Santa Rosa’s plight, right?

    And next time you quote numbers, have the decency to at least link a source.

    Nowhere can I find your 50% number spent on welfare, but everywhere I can find that welfare spending on the poor, the old and they young is the main area where State budgets have been cut for years. I also find no evidence on any significant welfare reform; just today the PD wrote an editorial decrying the Democrats’ refusal to address the issue.

  2. Selective rage says:

    From my other post, copied here. You like to point to the big bad unions and scream, unfunded liability. Pensions are 7% of the State budget. You don’t have the guts to point at welfare programs, over 50% of the State budget, and cry fowl. As long as you and your children can collect your money every month, the highest in the nation, you are happy to point at something else. Will children starve? Heck no, their parents will move to the next highest welfare state. Welfare moms collecting over $60,000 a year, you are ok with that. But God help you if you get a 30 year pension because you ar ethe devil. The pension system is being revamped, even though you are not in the email loop. Dance around the issue, but don’t even address the real problem, tens of billions a year to welfare, fully funded, with no income to fund it but your taxes.

  3. GAJ says:

    @Bear, anyone who thinks our taxes have been spend in a financially prudent fashion is living in a dream world.

    Those of us that shoulder the most burden have a right to expect dramatic restructuring of the way money is to be spent in future prior to agreeing to give more.

    You wouldn’t give more money to any individual or organization that showed a lack of discipline in how that money is spent now would you?

  4. Keyless Chuck says:

    Sonoma County is finally coming to the realization that the lefties here spend 99% of their efforts trying to get the government to give them more stuff, complaining about what the government does or fails to do, and pay no taxes.

  5. bear says:

    I’ve had an insight.

    You anti-tax people don’t pay your taxes!

    Got it.

  6. Fiscal Conservative says:

    Obviously the defined benifit from the pension plans will soon be a thing of the past.
    It is only a matter of time and how deep the debt gets before the legislation is passed.

    “It’s going to be tough for this council and this city to figure out a way forward” said progressive debter Gorrin.

    To me, this is more like an intervention and realization to this council that they are headed to shady acres for debt detox and a new lifesyle on the twelve steps. It’s hard to watch, but they need the tough love.

  7. County Worker says:

    So if they outlaw public employee unions, do you think they wont have to pay them? Do you think they will take all their benefits away if they are not unionized? What is your grand master plan to fix this besides going after one group of citizens? What is next? Public pensions on the state level I have heard are about 7%. Welfare, I have heard is 50%… At the beginning of this last legislative session there were 16 bills attacking public empoyees pensions. Last week the last one was pulled for lack of support. Where do you think that leaves you?

  8. Jim M says:

    The current majority on the city council largely owes their victory in the last election to the public safety unions, there is very little chance this council will remove binding arbitration. We will need a ballot initiative to do it.

  9. Watcher… couldn’t agree more… and I’d go a step further.

    1. Repeal binding arbitration… we should be in control of our own employees, not some “impartial” arbitrator.

    2. Eliminate SWAT teams, Hostage Negotiation teams, Bomb Squads, and other “specialty” positions county wide. Instead, create a single county wide crisis response team made up of members of every agency that are available to respond to serious incidents county-wide.

    3. Smaller municipalities should be encouraged to contract with the Sheriff’s Office.

    4. Consolidate dispatching services with the county. Let the county beef up their dispatch center and dispatch for every city in Sonoma County.

    There are other money saving ideas out there…

  10. SR Watcher says:

    It makes sense to work on the pension issue but the real problem to be resolved asap is the revision of the Charter. The Charter is what binds the council’s hands to keep police and fire getting raises while the rest of the City goes down in flames! The fire and police have still not given anything up and only defer pay raises as a token until they will get double digit percentage increases. This is not a joke! The highest paid are not willing to share the burden…the problem is that the Mayor is from the same team. Now that the Middle Managers have finally been forced to give up time along with the SRCEO folks it is going t be interesting to see how long the pubic safety can hold on to every single employee they have and add more employees! Of course they have to tell you that you won’t get the same service….it is a scare tactic and is the ony way they know how to relate. Come on people…really look at what can be cut…some of the toys? Maybe keeping positions open hoping for the future? Uhh, maybe the OT that isn’t paid for with a grant? Not promoting as often, since that adds to the cost and most would agree that getting promotions right now just looks bad…play as a team with your community…unless you are not even from the area? Believe it or not…many are not.

  11. seen it all says:

    Time for a radical change. ALL workers should be paying into Social Security they should also have a 401K plan, this includes public sector workers. Too late for current hires but certainly a solution for future hires. Stop digging!

  12. Jim M says:

    I don’t see how a $100 million and growing unfunded liability can be anything other than an urgent problem. The longer we waiter the harder this will get. If nothing is done the city, along with many others across the state, will go bankrupt and the public employees will collect nothing, it’s in everyone’s interest to solve this. I’m surprised only councilmembers Wysocky and Gorin are the only ones who can see the urgency of this issue.

  13. Bishop says:

    The progressives on the Santa Rosa City Council were not supported by the public safety unions in the last election. It is pay back time and that is why the CPA and biking enthusiast, Wysocky, is anti-public safety unions.

    It is true the Council needs to get on with a decision on their pensions and benefits. The clocks runs on and the bills run up but Wysocky and friends are acting out of their interests, not the public interest as they always do.

  14. Pearl Alquileres says:

    OUTLAW PUBLIC EMPLOYEE UNIONS COMPLETELY!
    It’s our only hope!

  15. mike says:

    boy i guess it sure would help a little if we had a lowes and a walmart for some of that extra tax revenue or maybe some other buisnesses to help bolster our tax base and keep the city up in running but oh thats right our council pushed them away didnt they? So we have this wonderful pro buisness majority but there not actually getting our city any buisness are they? Lets just keep letting our dollars go to other cities and the county.

  16. David B. says:

    I didn’t know much about Councilman Gary Wysocky until he was elected & I began to read about him in the news.

    Every time I see him quoted, I like him more. And one reason he is so well informed and on the mark is because, as I understand it, he is a CPA / Certified Public Accountant.

    As a CPA, the other Council members should be following his lead rather than trying to pretend they have more financial wisdom than he does.

    Yes, Gary. The budget screams for immediate action and not delay. Public pensions are “soaring” just as the PD text says. Its absurd not to act now to reign in those costs.

  17. Reality Check says:

    I appreciate that Olivares prefers a collaborative effort with city unions, but does he think they’re going to do anything other than offer token reforms?

    The problem isn’t difficult to grasp: the city signed contracts that include benefits that cost more than anyone realized. The options are: raise taxes, reduce benefits, have employees make up the shortfall, or prepare to gut virtually every city service.

    Wysocky and allies seem the understand this. Why the so-called business-friendly members of the council want to postpone the hard choices is disappointing.

  18. Chris says:

    Mayor Olivares is just happy with the pension system because he is collecting his Santa Rosa paid for $120,000 pension and double dipping with his Mayor’s salary too. First reform, fire Olivares.

  19. bear says:

    You oversimplify the issues. We are in the worst economic situation of the last 80 years. Rates of return on employee pensions have not met expectations. Things will presumably get better. So do you set policy under the worst cirumstances, or give the economy a bit of time to recover?

    Do you slash the benefits promised to existing employees? Or just those of future hires? What generates real savings? What is ethical?

    Layoffs, the threat of layoffs, and the general contempt directed towards public employees are causing many to pull their pension benefits now. This further distorts the problem of projecting future circumstances.

    Check the balances of employee pension funds as they stand – there are billions of dollars. So time is not the issue. Reason and fairness are the issues.

    Finally, every job and disposable dollar lost to anyone – public or private sector – hurts local business and hinders economic recovery.

    Cut if you must, but be prepared for an unprecedented “double dip” recession. This will be worse than what we have now. You will not like it.

  20. Jim says:

    When you are in a hole, the standard advice is to “stop digging”. The public does not need to be “educated” by a Task Force, what we need is a council that takes action to stop digging us into the hole of eliminated services to fund unsustainable and rapidly growing employee costs. Stop stalling and take action!

    Also, selling bonds to pay for unsustainable pension costs is not a solution. That just adds interest payments to the bill and hands that to taxpayers.