It's likely the ruling will be appealed.

If the judges decision is upheld, city workers will bend over while administrators retain high salaries, benefits and perks.

So, what else is new?

Imagine working for 30+ years, earning low(er) pay (than you could have earned in the private sector) with the contract that your retirement will be a set amount. Now imagine being ready to retire, and suddenly being told that, through no fault of your own, that your retirement is being slashed by half (or more).
 

What good are contracts if the employer doesn't have to live up to their side of it?

What good are contracts if the employer doesn't have to live up to their side of it?

I don't know. Maybe the teleprompter has the answer.  The Teleprompter doesn't think AIG should live up to their side of the contracts with their employees..

Imagine working for 30+ years, earning low(er) pay (than you could have earned in the private sector) with the contract that your retirement will be a set amount. Now imagine being ready to retire, and suddenly being told that, through no fault of your own, that your retirement is being slashed by half (or more).

What good are contracts if the employer doesn't have to live up to their side of it? 

Per unit of actual work performed, the Public sector is very well paid.

The problem is the Public Service unions have pushed compensation to irrational levels.

Retiring at age 50, on the backs of the net taxpayer is unsustainable, especially considering that the “retired” person takes another job in many cases. 

Had the government workers in Vallejo been reasonable in wage demands, this wouldn’t have happened.

BTW: Most in the private sector are also seeing retirement income declining dramatically. 

The Public sector is always screaming for parity with the private sector.

In Vallego, their wish has come true.

So Don, what was unreasonable about the Vallejo contracts? I know it is pretty much par for the course during a bankruptcy case that contracts are voided, or at least re-negotiated. What was their compensation @ 50? 

And where was it said that it was the employee contracts that bankrupted the City?

“The city and its unions agreed on big raises back during the real-estate bubble, on top of pension increases it had given earlier in the decade.”

“And where was it said that it was the employee contracts that bankrupted the City?”

Look above.

Obviously, if present tax revenues can’t support recent wage and pension increases, they are unreasonable, and unsustainable. The city went bankrupt as a result.

That’s how the real world works.

It also means that many private sector vendors and suppliers won’t get paid. They must eat the loses too. Where’s the concern for them? They also had contracts with the city.

Had the city employees been a little less greedy, a surplus would have accumulated during the boom to tide over the bust.

The situation isn’t unique to just Vallejo, but Vallejo is an extreme example of Public Sector greed.

We’ll be seeing a great deal more problems of this kind over the next few years.

You guys kill me....lol....you guys hear something and it's an omg mentality. Your public safety sector, (in Bakersfield), if you look at everything....pay and benefits included...compare in no way to what's happening in Vallejo. Using the city of Vallejo as an example, is comparing apples to oranges. There are examples that this city uses when comparing wages and benefits, and I have seen those figures....your community is in no danger of being bankrupt. As a matter of fact your police and fire departments have the lowest salaries out of all of those cities used for comparison studies. It would take an 18% bump today just to get to the average of those cities. Also a fact....this community has per capita the lowest level of public safety employees per thousand than any comparable city.

Vallejo's general fund was way out of control in regards to public safety budgeting. Their city leaders should be held accountable for their mishandling of the tax payer funds. Blaming the Unions up there isn't a fair statement to make....If we are going to say both....I can live with that. Bakersfield, on the other hand, is the extreme opposite, and like-wise should be held accountable. 

If anything should be happening with-in this community it should be an out cry of the lack of attention that your city has placed in regards to the safety of the people that live here. (A problem that started 17 years ago....and has only gotten worse).

And I don't get the nearsightedness of the age thing....don needs to take a step back and ask himself if he clearly understands why public safety employees receive a pension at 50.....you're talking about an industry that is physically demanding, and life shortening. Especially the fire fighter, who has an extreme high rate of cancers that plague his/her industry....police have higher rates of psych issues and physical issues than say....hmmmmmm.....an office worker. Retireing at age 65 is sustainable for many careers, but not a public safety worker. What do you want....a 60 year old physically degenerated public safety employee taking care of your emergency?

As far as the cities contribution to the pension program for police and fire?......what is the actual amount everybody is upset about? Is the 6 or 7 dollars per hundred bucks that's overwhelming to the tax payer. I understand when the city budget is nearly half a billion-- that figure of pension contributions is difficult to look at, but it's really not a significant amount. I think there's just a lack of priority happening, and the city likes to make erroneous statements that create unnecessary fear to the populous. How many of us go to the ATM and have to pay 2 bucks to get a 20....nobody's complaining about that.

If you really want to get fried about something.....ask your city manager how much the "net tax payer" had to pay for public safety pensions from 2001-2003. That would be zero, zero and zero. In 2000, 2% in 2004, 7%.Better still.... this city doesn't and I repeat doesn't,make contributions to Social Security, to the tune 7.85 FICA ....lets run those numbers,....also  employees pay portion into their pensions out of their own pocket. Personally I think the city is doing pretty good.

Don, could you please explain "per unit worked of what"? That statement makes no sense what so ever....obviously neither department....police or fire can handle their call volume.... Are you insinuating that public safety employees don't work as hard as the private sector? What's their call volumes like...and what are there daily routines on top of their call volumes? I think we need to compare police and fire to police and fire.....not a marketing director to a firefighter, or a police officer to a retailer.....

Getting back to Vallejo.....yea they have a serious funding problem. I believe in a court of law they can show just cause to break their contracts.....and they should. Unfortunately, this city would be embarrsed if they had to open their accounting books in a court of law.....examples of the 2.3 billion in assets alone or millions set aside for a minor league baseball stadium, or the recent 2.3 million....55 year....no interest loan for the developers(sorry for the run ons).....would probably get them thrown out.

I will say this....it's not your police and fire that are causing issues for this city.....it's an ugly ideology that dictates how your tax payer funds are being given out irresponsibly to developers. Those unions, regardless of how you feel, shouldn't be "pigeon holded" with other groups. We should be focusing on the top of the chain....madoff types...big three...not the guy that makes it all work.

Nicely said Mr. Doright.  Mr. Geluso has apparently found another sore subject with some faction of our community he can exploit on his blog (although I think Vallejo is not going through with the bankruptcy and has settled with its unions).  Regardless, there are some glaring issues brought forth from the Vallejo bankruptcy filing:

1.  Vallejo only claimed bankruptcy on its general fund.  It has money in other funds.  Apparently I can successfully claim bankruptcy on only my Visa card debt.

2.  The city manager took a 40+% pay raise in the few years leading up to their financial problems.

3.  The city speculated in real estate when nobody was buying there or wanting to buy there...Then the bubble burst.

4.  The city agreed to a salary raise schedule for it police officers it ultimately could not deliver on (ie. Vallejo officers will be the highest paid of certain surveyed cities).  As a result, the "bankruptcy" was filed only to break its contracts with its employees.  Another great management tool.  Where does this put their bond and credit rating?

The logical answer to the question is clear....  Who's at fault for Vallejo's financial situation? The dumb city leaders!  

Thank you for the compliment. I have been very appreciative of Mr. Geluso bringing some of these topics out in the open. In an odd way, I think we need to expose the city’s negligence towards it public safety sector. There is some serious issues facing our community during this economic down turn which is going to bring to light just how under staffed the police and fire departments are.

Not to mention the fact that in the “General Info” letter that the city manager puts out, he is giving horrible examples of departments that are making cuts to off-set revenue short falls. I’m hoping this propaganda will back fire as it will inevitably be brought to the community. For example: Chico fire department cut 9 fire fighter positions. With those cuts, they still maintain a 1.3 fire fighter per thousand ratios, where as this city without any cuts is at .54 per thousand. Sacramento, for example, four man engine companies, nine trucks, while we have three man, and three trucks….oh….and a substantially lower rate of pay. The police are no better off and have already been taking there issues to the public. While the city maintains that crime is down, which it is actually since we have less people “j-walking”, violent crime is up. Response times are through the roof, and no matter what our departments say or show statistically….ignored by the city managers office.

What worries me most is after our safety departments make more cuts, we are going to see a minor league baseball park built or some other big project.

How many of our city council are supported by developers? At least 4 and that seems to be the driving force.

Good point about Vallejo’s City Manager. We need to take a serious look at Mr. Tandy’s benefit package compared to our city surveys. I wonder with all the AIG, Wells Fargo, and Madoff news going around if he would fall into a top heavy category.

Press Release

October 26, 2009
 

Office of Public Affairs
(916) 795-3991
Pat Macht, Director, External Affairs
Contact: Brad Pacheco, Chief
pressroom@calpers.ca.gov

CalPERS Responds to Emerging Issues Via New Web Site

SACRAMENTO, CA – The California Public Employees’ Retirement System (CalPERS) has launched CalPERSResponds.com – a new Web site dedicated to educating its members, employers and stakeholders about emerging issues including pension security, investments and national health care reform.

The new Web site also serves as a platform for CalPERS social media presence on Twitter, Facebook and YouTube.

“There’s a lot of information and misinformation about CalPERS,” said Patricia K. Macht, CalPERS Director of External Affairs. “We hope this site will help separate the facts from fiction and provide some education, insight and clarity to these issues.”

CalPERS Responds.com is also home to Insight, a new video program that highlights conversations with CalPERS leaders on key issues.

In a recent interview, CalPERS Chief Investment Officer Joe Dear talked about the recovery of the investment portfolio and the importance of financial market reforms.

“We’ve moved up from the bottom in March 2009. At about $160 billion dollars to just above $200 billion dollars, which is a $40 billion dollar improvement in the portfolio,” said Dear. “We can’t forget the consequences of the failure of the regulatory system and its contribution to the devastating losses that all investors suffered. We need to strengthen the regulatory agencies and give them independence. We need regulators that have the skill that are empowered and motivated to protect the public interest. And secondly we need to close the gaps in the regulatory system. When these systems fail, it’s not just investors who suffer, its ordinary working men and women and their roles as taxpayers.

CalPERS also debunks the common myths associated with public pensions with facts, including:

• The average CalPERS pension is about $25,000 per year. Half of CalPERS retirees receive $16,000 per year or less in benefits. Unlike the private sector, many CalPERS members do not receive Social Security, making their CalPERS pension their sole source of pension income, other than savings.
• Only 1 percent of the nearly half million CalPERS retirees receive annual pensions of $100,000 or more. Many are retired non-unionized or specialized skilled employees or other high wage earners who worked 30 years or more. Many served in high-level management positions.
• The downturn in the markets is the cause of greater employer contributions. Even if changes to pension formulas did not exist, CalPERS would need more contributions from employers, due to market losses over the past year. 
• CalPERS spends about $5.7 billion a year to provide health care. Costs have risen in the last few years and our economic recession is amplifying the impact on the health care marketplace. Since 2003, health premiums have risen by more than 60 percent. National health care reform can bring about systemic changes that make health care affordable for our employers and our members.

“Retirees need to know that the security of their benefit checks is without question,” added Dear in his Insight interview. “Our assets are more than sufficient to make those payments and that we’re positioned for long term growth. And our ability to earn the seven and three quarter’s percent over the long-term, is without question going to be done.”

CalPERS is the largest public pension fund in the U.S. It administers retirement benefits for more than 1.6 million active and retired State, public school, and local public agency employees and their families on behalf of 2,600 California public employers, and health benefits for nearly 1.3 million members.

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Dated: 10-26-2009