A few pension facts:

First and foremost, the Public Employees Retirement System (PERS) in California is arguably one of the best retirement plans in the world.  It is a defined contribution system with a guaranteed rate of return for the retiree depending on length of service. Both the employer and employee pay into the system.  It’s a good, stable system that has been in existence since the great depression, tailored for employees who serve in government.  There are no year-end bonuses, stock-options, or myriad of other retirement perks commonly found in the private sector.  Moreover, the 3% @ 50 formula is the industry standard for large departments tasked with policing large, urban, crime and gang-infested areas. In fact, there are more than 350 California public safety departments with the 3% @ 50 safety retirement plan.   

Secondly, the Bakersfield Police Officers have twice offered to pay their entire 9% employee contribution to PERS but the City rejected the offer both times.  

And finally, the City of Bakersfield spends money earmarked for pensions during "good" economic times on one-time money projects like arenas, ice rinks, pools instead of saving it for the inevitable economic downturns and rainy days as PERS recommends. The City does take most of the risks, but also nets the gains in good economic times. Let’s have an accounting of the millions of dollars of pension funds appropriated for projects that benefited the Abernathy group.

Todmand, I hadn't heard about that offer from the BPOA. In this contract round? Was there another clause offered with it?

Sir, there are a lot of things you don't know since you rely on the "facts" from certain city leaders.  It took almost a year, and an officer shot, to get the city to agree to upgrade  officers' ballistic vests to the industry standard 3-A.  Whenever the city is expected to "do the right thing," they don't. 

By the way, that salary comparison Weir gave you has a number of problems in it.

Can you spot one of the major flaws?

Tod,
Let me guess.
In exchange for the employee paying the entire 9%. They wanted more money on the check.

That would take away from the City the ability to skip  pension plan payments in the good years.
The employees would have a extremely well funded pension plan. And a bit more take home pay.

Actually, Todmand, I rely on a lot more. When it comes to the BPOA proposal, I rely on Bill Ware. After the firefighters told me they were offering to pay the contribution, I asked Ware if the police had done anything similar, and he said no. If he's wrong, feel free to tell me. It'd be great if you could provide a dated copy of the BPOA proposal you provide to back up your statement.

(I know you might think I can get it myself, but I can't. We're the media, plural of medium, which is that we transmit what others do and say and tell us.)

I just talked with Dale Strobridge, the BPOA's negotiator. He said the offer was that employees would take over the 9 percent employee contribution. (Currently, the cops pay it for the first five years, then the city takes it over, making it Employer-Paid Member Contribution.) In exchange, the cops would get a 9 percent raise. It's a wash for both the city and the cops, but makes the cops' compensation look better than it currently does.

Except I don't think it is a wash. By increasing the salaries by 9 percent, you increase the pension benefit by 9 percent, too. That costs the city money in the long run.

Strobridge says the 9 percent that the city pays, the EPMC, is already included as part of the salary when the pension benefit is calculated. If he's right, then it is indeed a long-term wash for the city. I don't think he is, though. I've got an e-mail in to PERS to nail this down.

I applaud your tenacity sir!  I believe Strobridge is right.  It may be a wash, but it moves the employees back to paying their share.

Did you notice that salary comparison chart included Bakersfield in it?

The key phrase here for me is this one: "And, that annual $6 million unfunded liability payment equates to approximately 2/3’s of what a 1⁄2 cent sales tax measure would provide."

That amount of tax would pinch no one.  

We keep hearing the sturm und drang about taxes as if only idiots and demons   would ever back them. The fact is that there are TWO ways to balance a budget. One has the advantage of being parallel to our grandparents' efforts during the depression, i.e. to cut back expenses. The other is less homey, less punishing, but just as effective, i.e. to increase revenue.

I really think that times like ours deserves some attention spent on the second alternative, especially when the amounts are so paltry.

Edd Fong of PERS says it's possible that the EPMC is already included. He's checking and says he'll get back to me tomorrow.

Yes, I noticed that Bakersfield is on the table. It's supposed to be on the table. How do you compare them if they're not on the same sheet? Did you notice that the chart at the bottom is labeled "Average Total Comp. - Excl. Bakersfield?"

It's amazing that these financial guru's that continually bash the cost of the PERS pensions fail to note the cost that the City would incur should PERS be scrapped.  It's a little known thing called FICA or more commonly Social Security.  You see the City does not pay into Social Security, and the employees of the City earn no credits towards a Social Security benefit.  To find out what this amount would be, simply multiply the entire City payroll by 7.5%.  I don't have that number in front of me, but I'm sure that comes to millions of dollars. SSI has very specific requirements on how employers can become exempt from paying into FICA, and having a PERS styled plan is one of them.  401(K) plans do not meet the exemption test. 

The City should take care of it's employees the same as they just did some developer.  Give them loans for the value of their pensions, and they can pay the City back in 50 years.... of course with no interest.  Hey, that's what the private sector is getting!

Well said DesertSledder. Ever since the GASB (Governmental Accounting Standards Board), wrote section 45, the financial guru’s wave it around like a saber of truth! “It’s my precious” can be heard throughout the halls of city hall. Personally, I’m glad somebody finally intervened on behalf of the employee. Now there’s some accountability for the corrupt CEO or City Manager that likes to think they have a free reign with employee 401k or pension fund. I’m sick and tired of seeing these guys bankrupt a company, take their big multi-million payout and leave the long standing, hard working employee without anything. I’m tired of reading in the news about the corporate CEO flying his private jet to the steps of Washington and holding out a tin cup……or how about the recent Madoff news….no better still.

It should be a giant red flag when we hear from the “powers that be” about unfunded liability. It seems to me the biggest complainers are the types that can be the most corrupt. Scrivner? Weir? Tandy?  Are they cut from that cloth? Constant rhetoric from them and the underlings that serve them: “Unfunded liability is bankrupting the city”! “The employee pensions are a serious drain on our coffers”!  “Let’s give the developers a no interest 55 year loan”!

Millions in a new City Hall, minor league sports arenas’, fun parks, baseball stadiums, and similar building projects have taken priority over the most important asset the city has, the employee. There’s a serious priority problem going on…

Let’s talk about being prudent….

The Bakersfield Cities contribution to PERS

 2000=7%

2001=0%

2002=0%

2003=0%

2004=2%

If the normal contribution is millions, what happened to all the money during the easy time? I don’t see any developers complaining…You know what? Maybe it’s time to change the name of our city from Bakersfield to Tandyland. Our motto can be “Tanyland! A jellybean city! It’s hard on the outside, but soft and gooie on the inside”.

What I don't understand is why Bakersfield fire fighters are paid more than fire fighters in Santa Barbara when  the cost of living in Santa Barbara is 24.4% higher than Bakersfield.  Seems to me the city administrator is asleep at the wheel and the firemen's union has managed to pull the wool over his eyes.  Cutting fire fighter's pay by 25% would go a long way in improving the city's budget.