Pleasanton Weekly

News - February 4, 2011

Pleasanton council gets an earful at its pension reform workshop

Pending union contract with 227 city employees generates support, opposition

by Jeb Bing

Emotions ran high Tuesday night at a four-hour-long public workshop on city pension reforms hosted by the Pleasanton City Council.

In their packed council chamber in the Civic Center, council members weighed comments from 26 speakers who spoke following a one-hour presentation on city finances by Emily Wagner, the city's Finance Director.

The public forum was triggered after Pleasanton businessman Bart Hughes, former City Councilwoman Kay Ayala and David Smith objected to a two-year contract that had been negotiated between the city and the Pleasanton City Employees Association (PCEA), a union that represents 227 members.

Some speakers, with tears in their eyes, talked about their years of dedicated service as city employees working at the library, City Hall and other non-management jobs.

Represented by Brenda Wood, the business agent for the union, they said they had agreed to a pay freeze over the past year, a freeze that would be continued in the new contract with 2% of their pay to now be taken out to pay their costs of health and pension benefits. Since 2002, those benefits have been paid entirely by the city.

Other speakers talked about their frustrations and even anger over contracts negotiated with both the employees union and unions representing firefighters and police that failed to address unfunded pension liabilities for those employees, which they said now total $290 million and are growing.

"Everyone agrees that Pleasanton is in financial difficulty," Hughes said. "This is not about the employees. This is a wonderful city. But these days, private citizens are finding that their incomes are not going up. Expenses are going up and inflation is going to take off again. We need to fix this (pension) liability."

Hughes and his coalition urged the council to scuttle the employee union contract that was negotiated last November with a 2% contribution toward pensions and negotiate a new one that would at least provide a 4% contribution, or even more.

Last month, City Manager Nelson Fialho voluntarily agreed in a new contract to contribute 8% toward his pension. He also won an agreement from department managers to start contributing 4%. A new contract recently signed with the firefighters' union also has them contributing 2% toward pension benefits. A new contract with the police union is scheduled to be negotiated in a few months.

In her presentation, Wagner said the $290 million unfunded pension liability actually has been reduced by cost-cutting measures and other adjustments with the liability closer to $121 million. She agreed that's still a big number but with unrestricted net assets of $171 million, the pension fund liability is manageable as the city continues working with employees groups to pick up more of the costs.

She pointed to a slight rise in sales tax revenue in 2010 and more growth expected this year, with Mayor Jennifer Hosterman pointing out that Pleasanton residents have the highest income level for any city its size in the country.

"Our current bond rating is AA+, the highest rating for cities in California," Wagner said.

The City Council will review last night's comments and plans to vote on the proposed city employee contract at its meeting Feb. 15.

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