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Letís take another look at the employee union contract

Original post made by Jeb Bing on Feb 13, 2011

With new information now available from CalPERS about retirement plan funds and a group of individuals asking for a better deal from the Pleasanton city employees union, wouldn't it make sense to go back to the bargaining table one more time before the Pleasanton City Council signs a pending contract?

The council is due to act on the contract Tuesday night. The PCEA earlier agreed to a two-year wage freeze and to have its members for the first time contribute to their pension plan. The city manager negotiated a 2% contribution, although he, himself, has decided to contribute 8% and department heads and other managers agreed to start contributing 4%.

Since the PCEA union representatives seemed willing to work with the city to ease an unfunded pension liability that now ranges between $121 million and $290 million—and learning now that the CalPERS' financial shortfall is even worse than expected--there's good reason to think the union would agree to chip in more. That contract, which goes before the council Tuesday night, should go back for reconsideration to raise the contribution to 4%, with the likelihood that all three employee unions—PCEA, the firefighters and police—will move to 8% contributions shortly.

When Councilman Matt Sullivan asked former Councilwoman Kay Ayala what it would take to avoid an initiative effort that some citizens might seek to cut back on employee health and pension benefits, she suggested a two-tier approach to solving the problem. That would make sense, too, and should also be part of renegotiating the PCEA contract and in future negotiations with police and fire, as well. A two-tier benefit plan would not affect those already on the payroll and could go a long way toward gaining a handle eventually on runaway benefit costs all government employees, including Pleasanton's, are enjoying.

Comments (26)

Posted by sue, a resident of Downtown
on Feb 13, 2011 at 7:28 pm

Jeb,

Well said. We need to get pensions in line with what they always were intended to be, 8%, as we cannot afford to continue to be in deficit position we are now find ourselves in. Reserves should absolutely not be dipped into to pay fixed costs for pensions.

Calpers site said government and public agencies are contributing 5-9% of their salaries to pension (that was a year ago). Pleasanton lags others with no contributions for misc employees (and a meager 2% in draft contract). Our leaders need to help get our City in line so we have a sustainable budget with a minimum 4% this year and 8% in 2 years. Many have also gone to 2 tier and we need to.
Web Link
Myth: Government workers don't contribute to their pensions; taxpayers are on the hook to pay those costs.January 12, 2010
Fact: All government workers contribute to their CalPERS pensions. For state employees, the range is five to eight percent of their monthly earnings; for public agencies it is five to nine percent. While the vast majority pay five percent, firefighters, peace officers, and the CHP pay eight percent.



Posted by two cents, a resident of Another Pleasanton neighborhood
on Feb 13, 2011 at 7:39 pm

Jeb, I agree with you, we need to have another look at this contract and get to at least a 4% contribution and two tier for new employees.


Posted by no so fast, a resident of Birdland
on Feb 13, 2011 at 7:39 pm

"Fact: All government workers contribute to their CalPERS pensions."

Not true in Pleasanton. Our government workers do not contribute a dime to the pensions. The taxpayers pay all of the pension plus are on the hook to pay when the market does not perform.

Why is it fair to allow existing workers get away with what was a huge mistake made by a council in 2002. Both the city and workers knew years ago that the contract was a real problem but did nothing. Now that the contract is up, those workers are unwilling to at least pay their share of the pension.

And why is nobody talking about the free medical insurance all workers receive when they retire? The employees do not pay a cent for that and the taxpayer pays it all, including any increases in insurance premiums. This benefit should go away for everybody. We are already paying for an excessive pension. They should be able to afford health insurance!


Posted by Stacey, a resident of Amberwood/Wood Meadows
on Feb 13, 2011 at 7:57 pm

Stacey is a registered user.

Didn't you just publish an opinion in favor of the tentative agreement on Friday?


Posted by frank, a resident of Pleasanton Heights
on Feb 13, 2011 at 9:47 pm

Sue's web link statement is a bare face lie if the following is true from another source:

"Unlike in the private sector, where pension programs typically are paid one-half by the
employer and one-half by the employee, payment of pension benefits has been a subject of
negotiation between public employee unions and government agencies for many years. Public
employee unions representing law enforcement and fire personnel have been the most effective
in having their public agency in many jurisdictions pay all or most of the employee's share of
pension payments.
That many public employees in California pay less than half or nothing toward their share
of retirement premiums increases these costs to taxpayers and government agencies."

Web Link

Another counter example is the City of San Jose where the city pays 23% and the employee pays 4.5%. I think with a little further researching many counter examples will be found... That's why this public employee pension thing is out-of-control. Our elected officials have been gamed and out-smarted by the labor unions...


Posted by frank, a resident of Pleasanton Heights
on Feb 13, 2011 at 9:57 pm

Here is an interesting read:


"Existing benefits of our pensions systems are very generous," Jason Sisney of the analyst's office said in a video report. "Compared to other states Californians have typically given their public employees richer retirement benefits in recent years.

"And even after some recent changes at the state level to reduce benefits for future employees those benefits are often much more generous than the retirement benefits in the private sector.

"In the private sector defined benefit pensions and retiree health benefits — still the norm in California government — are increasingly nonexistent. A key question that we think needs to be asked is this:

"Can the substantial disparity between public- and private-sector benefits be sustained much longer? We think that it probably cannot.
"

From the following reference:

Web Link


Posted by Terry, a resident of Birdland
on Feb 14, 2011 at 12:48 am

Pensions are almost extinct in the private sector. The public employee pension system needs to be abolished so that public employees have 401Ks like everyone else.

Also, for the first time in history, most of U.S. union members are made up people working for the government/public sector. Web Link

Unions used to represent blue collar labor employees mainly working low paying jobs in factories, etc. where the safety issues made the unions relevant, but union membership is now composed of mainly white collar desk jobs of highly paid government workers.


Posted by already available, a resident of Another Pleasanton neighborhood
on Feb 14, 2011 at 10:19 am

If you want to see the salaries of all employees in the City, you can find this at: Web Link . The news group received the salaries and names through the freedom of information act. 144 of our employees make over $100K.

There is obviously something going on in the city finance department. The second highest pay in the list of Pleasanton has our Financial Services Manager in the Finance Department. Base pay is $65,872, "Other" pay is $156,579, so a total of $222,451. That is more than the City Manager. Looks pretty suspicious to me!

Then you have our previous City Attorney with as base pay of $195,223 and "other" pay of $106,987 with a total of $302,210.

If I had to guess, these are recent retires that have spiked their final pay in order to get an even higher pension as the pension is calculated on the highest one-year of "pay".

Probably the same way the Director of HR of the School District arrived at a pension of $178K/year.

Government employees are scamming the taxpayers. We need to put a stop to this.


Posted by Aware and angry, a resident of Another Pleasanton neighborhood
on Feb 14, 2011 at 2:43 pm

I agree 4% would be a fair compromise on the employEEs 8% share. (they should be grateful if we pick of 4% OF their share!) Yesterday's (valley) ContraCostaTimes.com had 3 great pension articles. Well worth checking out yesterday's Daniel Borenstein's article "Stop pushing pension debt onto our children.". "Carrying" 30 retirements mean children of our children will be paying for those retirements. BUT, by the same token I'm NOT for using up Pleasanton's reserves....reserves are to be held for reserves for permanent purchases....not the daily living of retirements. That's how thar works. I know, right now our family is using our savings...for daily living. You only get further behind, and will never be able to 'catch up. It seems our employees should FUND their own retirements....LIKE WE DO ! ! What arrogance and conceit for them to think they are 'above it all'. THEY'RE NOT !


Posted by Upset, a resident of another community
on Feb 14, 2011 at 3:06 pm

All I have to say is the city council is gutless and spineless. How can I ever again trust them on anything they say they'll do? They've lost ALL credibility with most of the city employees to go back on their word. If it was fine with them in November when they agreed to it, it should be fine now. Matt Sullivan even said, what kind of man would I be to go back on my word? So if the city council can go back on their word, can the city employees go back on theirs? So my question is, if we as city employees give up 4 or 8%, what will we get in return? The citizens can't have it all their way.


Posted by two cents, a resident of Another Pleasanton neighborhood
on Feb 14, 2011 at 3:13 pm

"So my question is, if we as city employees give up 4 or 8%, what will we get in return?"

You're not giving up anything. The 8% is the EMPLOYEE contribution. Most other government workers pay it. You will be paying your fair share towards your retirement and doing the right thing for your kids.


Posted by to upset, a resident of Another Pleasanton neighborhood
on Feb 14, 2011 at 4:14 pm

To Upset, a lot more information came in about the ongoing increases to CalPERS since November plus the Council did not even talk with the residents before they negotiated on their behalf. I know the employees are upset that they could not sneak in their contract before the true costs of retirement were known and before the public had a chance to speak.

The employees had a bonus for some time where they did not have to pay their share of their own pensions. You also just got off an 8-year contract where you received a 42% increase in pay so having to give up your 8% bonus is nothing. It is finally time that you live up to the fact that city employees are not entitled to have all of their pensions paid for by the residents.

It is employees like you that make the public want to dismantle government unions. Keep talking. The more you talk the easier it is to get the residents to pass an initiative to take back the city from the unions.


Posted by Upset, a resident of another community
on Feb 14, 2011 at 4:48 pm

I was fine for paying 2% at first, then a little more the next go around. Let's take one step at a time. I also keep hearing that "the Council did not even talk with the residents before they negotiated on their behalf". The residents have never been able to be in on the negotiations, it's between us and the city council/management. It works like that everywhere. Just because some people have had unfortunate luck in their job careers doesn't mean we all have to. There's a lot of talk about people just want what is fair and I'm all for that. That being said, I want the same pay as the city manager or a CEO of a huge company. You don't see me complaining that I don't make $200,000 a year, I can accept that we are NOT all equal.


Posted by Arnold, a resident of Another Pleasanton neighborhood
on Feb 14, 2011 at 4:51 pm

Nothing has been removed from the city agenda regarding tomorrows council meeting. I haven't seen anything to make me think anything has changed. Just because one post says so doesn't mean it is true.

I will say there are plenty of ways for both the city and PCEA to work through this contract issue that would minimize the impact to the employee union while decreasing the growth in employee costs above what is currently being proposed. It is pretty simple, and I think fairly palatable for the employees, the city, and the concerned taxpayers. I hope the city postpones approval of this contract, which won't take effect until March 31st anyway; the concessions don't take effect until July 1, 2011.

Seems ridiculous to push something through when it really doesn't change a thing for another 4.5 months.

Why isn't the actual contract included in the city agenda (item 9)? The citizens deserve the opportunity to view the entire contract.


Posted by Bart Hughes, a resident of Another Pleasanton neighborhood
on Feb 14, 2011 at 4:54 pm

Upset - What did citizens get when you were given an extremely generous contract? Please reflect on this as you guage your reaction to the current situation.

The previous contract(s) since 2002 took personnel costs from 63% to 79% - this is $71 MILLION that did not go back into the community. It also took our unfunded liability from zero to $185 MILLION (MVA) - money that future residents will be forced to pay a "tax" in services to recover from.

And yet you are upset that the council may not approve a contract that was developed via a wrong closed-door process that did not gather input from the public? A contract that would ignore new meaningful CalPERS information. A contract that will continue to increase annual retirement costs and our unfunded liability.

It appears to be a one-way street with union members like you. I agree with the poster above - keep this up and you will continue to alienate yourself with the public. Come to the table with something reasonable or face the risk of more drastic changes forced on you by an initiative process, just like they did in Menlo Park with 71% of the vote. Reflect on the big picture here and ask yourself honestly who is being unreasonable.


Posted by Bart Hughes, a resident of Another Pleasanton neighborhood
on Feb 14, 2011 at 5:01 pm

Upset - not true. Many cities gather input from the public prior to labor negotiations. Santa Cruz is just one of many examples.

And there will be more of this in the future. The public is waking up to the reality that the public union/management/politician negotiation process is broken and can't be trusted. Just look at what has happened in Pleasanton. Personnel costs have risen from 63% to 79% since 2001.


Posted by Upset, a resident of another community
on Feb 14, 2011 at 5:12 pm

Arnold,
We had a union meeting today and the majority of the members "gave in" and agreed to take it off the agenda and reopen the contract.


Posted by Stacey, a resident of Amberwood/Wood Meadows
on Feb 14, 2011 at 5:42 pm

Stacey is a registered user.

The problem in my mind is that the City doesn't have a real plan to deal with the exploding costs, only a vague set of goals. Because of that, and because the contract (no matter what is in it, no matter what anyone already agreed to) reflects implementation of no-plan, it can only result in citizens stepping in with their own plan through the initiative process, whether their plan is the best one that can be produced or not. Given the current political focus on pensions, any initiatives related to them are bound to pass. That's a disservice to everyone.


Posted by Sorry, a resident of Another Pleasanton neighborhood
on Feb 14, 2011 at 9:03 pm

Sorry Upset, especially the "scolding" from Bart himself! Just Google him, you'll see for yourself the CEO status he is coming from. Not all of Pleasanton feels this way, especially after the news of how well our city is doing. I say we just remember this during the next spike in the economy- initiative threats and all.


Posted by EJC, a resident of Castlewood
on Feb 15, 2011 at 10:17 am

Sorry...

I am sorry... unfortunately I believe most of Pleasanton,the state and country feel like we have an issue with government pension liabilities. Also I don't care if Bart Hughes is a CEO or a farmer his arguments and points are what matter.


Posted by Upset, a resident of Livermore
on Feb 15, 2011 at 9:13 pm

All I have to say to those Bart Hughes/tea baggers (I mean tea partyers)/citizens who are against the contract, be CAREFUL what you wish for, be very very CAREFUL!


Posted by Bart Hughes, a resident of Another Pleasanton neighborhood
on Feb 15, 2011 at 10:40 pm

Upset - nice example of civility here.

If you are going to throw out implied threats, at least have the courage to use your real name.

Oh BTW, how much of the general budget do you think it is reasonable for labor to capture? You've already gone from 63% to nearly 80%. What is reasonable from your perspective - 90%, 95%, 99%, 100%? And how large does the unfunded liability need to get before you get concerned? It's now $185M (mva) - $250M, $300M? ...

No worries, right? We can always get our kids to pick up the tab.


Posted by fact checker, a resident of Another Pleasanton neighborhood
on Feb 16, 2011 at 12:11 am

@ Bart, the actual % is 71 not close to 80.

The money spent on payroll actually pays for the services you enjoy. You can't separate the two.


Posted by Bart Hughes, a resident of Another Pleasanton neighborhood
on Feb 16, 2011 at 7:02 am

Please reference p13 of Emily's workshop presentation (the city's own data). You will see that the current total is 79.4%. And I constantly get acused of manipulating data??

It is right that employees get fairly compensated for the value they provide to the city. It is not right to have elevated personnel costs that crowd out other parts of the budget (material, reserves, capital savings, etc.). And this is exactly what we have right now and one of the biggest drivers of this out-of-control pension costs.

I agree that Pleasanton is not Vallejo but it would be interesting to see what Vallejo's personnel costs were prior to being driven into bankruptcy. I'm going to try to track this down.


Posted by Arnold, a resident of Another Pleasanton neighborhood
on Feb 16, 2011 at 7:10 am

Vallejo's personnel costs had risen from 65% to 81% of the GF.


Posted by Bart Hughes, a resident of Another Pleasanton neighborhood
on Feb 16, 2011 at 7:27 am

Arnold - what actually drove Vallejo into bankruptcy? What was the "straw that broke the camel's back"? Was it elevated personnel costs, the floor dropping out from under revenue, or something else?


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