Sunday, January 31, 2010

Rialto scrambles to fund new pension costs

Josh Dulaney, Staff WriterPosted: 01/23/2010 07:05:05

PM PSTRIALTO -At a time when local governments are looking to cut spending every way they can, this city is preparing to spend up to $5 million a year on upgraded pension packages for police, firefighters and other employees.Budget plans for the 2010-11 fiscal year will have to account for the new "3 at 50" pension plan, which allows firefighters and police officers with 30 years of service to retire as early as age 50 and collect up to 90 percent of their highest annual salaries for the rest of their lives.A slightly less generous improvement is also kicking in for the city's 400 general employees.The combined pensions will account for roughly 10 percent of Rialto's $52 million annual budget, when they take effect next year.City Administrator Henry Garcia had no luck in recent weeks trying to convince the workers' unions to delay implementation of the new plan because of the tough economy. The unions already gave up about $4 million in concessions to close last year's budget gap.It'll be up to the City Council to decide where the money comes from."We're going to use reserves and look for funding sources that can fund it," said Councilman Ed Scott, who was among a 3-2 council majority that voted to approve the pension two years ago.He added: "I have some faith and belief that the economy is going to turn around and we're going to find some revenue sources to deal with it."

Officials with the union representing Rialto police officers said their members have already given up plenty to help the city cope with the recession. "We have given up pay increases, holiday hours. . .We'd given up a lot in advance so it's not a hardship on the city," said Richard Royce, president of the Rialto Police Benefit Association. Representatives of the fire and general employees' unions could not be reached Friday or Saturday.

In the short term, the city will rely on its $31 million in economic reserves, a pot set aside for a rainy day.Rialto isn't alone. The 3 at 50 pensions for public safety employees are as common in San Bernardino County as the government officials who worry the pricey benefit is unsustainable."I think in general there's concern about the retirement system across the state, the retirement system that serves government as a whole," Fontana City Manager Ken Hunt said. "Fontana is a very good system and it's very expensive. The question becomes, can it be maintained."Last week, Orange County culminated years of negotiations about 3 at 50 when sheriff's deputies agreed to reduce the pensions for new hires. The move helps the county, but doesn't solve the long-term pension funding problem.

The thought of more local governments adopting new 3 at 50 plans in the current economy should be of huge concern to taxpayers, said Orange County Supervisor John Moorlach, who has long fought to roll back that county's 3 at 50 pensions."The pension contribution will be an ulcer in the budget because it will always grow and then you will have to bump other things out," he said. A divided council The 2008 effort to approve Rialto's new pensions was not unlike the debate that follows 3 at 50 proposals everywhere. Supporters argue that police officers and firefighters put their lives on the line for the residents they serve, often shortening their own lives through wear, tear and exposure to a wide range of hazards. As a result, they deserve earlier retirements and financial security."We're getting guys at 25, 26, 27 and they don't last much past 50," said Royce, the police union president. "This is a very hard career."Some police and fire departments also worry about losing good employees if they can't match the pensions being offered elsewhere.

"I supported it because it's a tool the police chief needs to recruit some talent into the city," Scott said. "We had a history of not good recruitment, and when you're surrounded by municipalities that have (it), it's hard to match that."

Mayor Grace Vargas and Councilman Joe Baca Jr., joined Scott to approve Rialto's 3 at 50 pensions by one vote. Vargas did not return a message seeking comment but Baca said the city owes it to the workers."We need to take care of our employees," he said. "They do a good job in the city and they should be awarded with a good retirement."

But critics argue the plans are far too generous, given the much more modest pensions typically found in the private sector. Another criticism is that, rather than spending their 50s playing golf, many maxed-out "retirees" take new jobs at other departments, collecting consulting fees or full salaries in addition to their 90 percent pensions."In economic terms, these people are millionaires and that's paid for by the taxpayers," said Steven Frates, senior fellow at the Rose Institute of State and Local Government at Claremont McKenna College.

Councilwoman Deborah Robertson and former Councilwoman Winnie Hanson voted against Rialto's 3 at 50 plans. "It was just a very expensive thing and I felt the city could not afford it and I think I was right," Hanson said last week. But voting against the interests of the police and fire unions might have carried a political price. Hanson suspects the vote might have cost her a 2008 re-election bid against Ed Palmer months later. Robertson did not return messages seeking her reasons for opposing the pensions.

It's the type of issue that can make city leaders feel as if they're in a no-win situation."Somewhere, the line between public safety, public good and public costs needs to be debated," said Garcia, the Rialto city administrator. "People want public safety. Here's the cost, you pay for it and that's the way it is."

Some seek to roll back pensions. In Montclair, city officials have trimmed services, frozen job vacancies, reduced overtime and benefits, and borrowed $2.5 million in General Fund money to ensure the retirement program is funded. And even before the current recession, they sought concessions from the unions on 3 at 50.

"Every agency is struggling right now and we all do it in different ways," said Edward Starr, deputy city manager in Montclair. "You don't want to do it on the back of the employees, but you also don't want to do it on the back of the community."

Montclair went to a two-tier system in 2005. Safety personnel hired after June 29 of that year would have a "3 at 55" benefit, while those hired before then kept 3 at 50.Montclair's experience also illustrates how pension costs can change dramatically with modest changes in the retirement age.

Starr said if all cops in Montclair were on 3 at 50, it would cost the city roughly $1.6 million a year. If all were at 3 at 55, the cost would be about $560,000 a year.

Rialto officials hope to follow suit."We're looking at that," said Scott. "When we go to negotiations, we would ask the labor unions to consider a two-tiered system."

Others want to take the discretion away from local governments.A group called California Foundation for Fiscal Responsibility has crafted an initiative for the November ballot that would drastically reduce pension benefits for future public employees.

According to the non-partisan Legislative Analyst's Office, the group's initiative would amend the state Constitution to limit defined-benefit pensions and retiree health benefits for state and local government employees hired on or after July 1, 2011.The measure establishes minimum retirement ages, such as 58 for new cops and firefighters, and 60 for other public safety employees. All other new employees would submit to the full retirement age as defined by Congress, which is 67 for persons born in 1960 or after.

"It's sucking money out of our economy," said Marcia Fritz, who helped craft the initiative. "It's our money and then people start drawing on these investments and then they (retire out of state)."

Fritz estimates the measure would reduce costs statewide by $14 billion over the first six years and $533 billion over 33 years. In the meantime, Rialto officials realize they need to increase revenue. There are high hopes for a San Bernardino County expansion of the landfill here. Also on the table is a plan to lease out the city's water department and save maintenance costs. Consolidations of city departments are also being considered."Right now we're going to have to make some tough decisions," Baca said.

Some officials worry it might already be too late for some cities.Moorlach, the Orange County supervisor, pointed to the Northern California city of Vallejo, which filed for bankruptcy in 2008, in part, because of expensive retirement packages."We're all trying to figure out who files for Chapter 9 bankruptcy first," he said, "whether it's in Orange County or San Bernardino County."


BS Ranch Perspective:

By reading this report it seems that the State of California is still in such a depressed state that The Rialto City Council should have not offfered or even allowed this Pension Package on the Labor Contract to begin with two years ago! Nor should any other agency in California allowed such an Outlandish Pension Plan to enter the Labor Contracts at all. The 2% at 50 years of age, was the greatest retirement plan ever!The problem that is not looked at here is that most or a larger percentage of Law Enforcement Employee's don't even make it to the current Retirement Age, and about the same do not make it even to Fifty before there is a forced Retirement Due to an Injury caused while on duty! In fact I only know of one three officers that have made it to their retirement age, and one of those were going under review, becuase he had a mild Heart Attack before his actual Retirement, so the issue of Stress was going to be looked at & his pention would be changed from a Regular Retirement, to a Medical Retirement.Riding around in a car for 8-14 hours a day takes it's toll on a body. Espeically to the lower back, and shoulders. Then when you get those calls that are considered to be a "Hot Call" it makes your Edreanalin sky rocket, which effects the the hole body, with a Raised Heart Rate, Consequently Blood Pressure gets Elevated, and you have muscles that tighten, due to the sudden stress that is felt! Now if you work Patrol this sudden Elevation in Heart/Blood/Stress Levels repeats themselves all night that you are in a seated Positon driving a car!"Man with a Gun", Family Fights with no more information, Family Fights & Gun's are involved, Armed Robbery, Rape, Children Crimes such as Physical Abuse & Molestation, Gang Fights, Drive by Shootings, this goes on all night long! this doesn't count the Burglary Alarm, and when you get there it looks okay, but then you hear a noise inside, at an open window, upon closer look the window has been pried, and you know that there is somebody inside. doing a Building Search for this suspect is stressful, and dangerous!! In fact all these mentioned calls are Dangerous, espeically the family altercations, gun calls, and any call that is reference an armed anything. Even a Rape is considered to be a Dangerous Call that causes a raise in blood pressure and heart rates, etc etc..Now if one of these calls involves an Officer Involved Shooting and you are directly involved in the incident, such as you are one of the officers that were forced to draw and fire, or an inocent Officer that the other saved via their actions to use their firearms! The stress that is felt then doesn't go away, it sometimes lasts for the whole time that you are off work. Because when you are involved in a shooting it is mandatory to take at least 72 hours off for their to be an Investigation for the shooting incident. That stress doesn't go away, because if there is somethign in that incident that might have made an officer look like he/she over reached, the District Attorney would file charges and your freedom could be taken away! Pending bail or trial you could be placed in Jail with the people that you had out there to being with!see there is a whole lot of things that goes on in that 8-14 hours a day that you are upright seated in a car betwen calls, that radio goes off and stress erupts right away. Pursuits is another call that can be down right scary!Doing this until you are sixty two, or Sixty Seven as this report stated. even waiting until you are 55 you can see that you might be at the end of the contract with working and taking the time off that you want would be great! But this stress constantly all the time is a burden that is hard to take.If you are a motorcycle officer the stress can start anytime that a person cannot negotiate a car properly and suddenly fails to stay between the lines next to you and you feel that car swerve towards you, that is sudden stress. Pursuit on a Freeway @ 16:45 hrs. while doing over sixty splitting cars to catch the stolen suspect vehicle that has gotten a pretty good jump on you is scary, because you don't know what these cars on the freeway are going to do, because they don't do what they are supposed to do by Yeilding over to the Right side of the road! Rather they either just ignore you, or they suddenly swerved at the last minute to yeild to the right, but this just happens to be when you are getting ready to pass this car.. stress!!Now that I have gone on and on to prove in some way that Law Enforcement isn't a normal job! It is a highly demanding, very very very stressful job, that causes your heart to elevate and relax approximately once every fifteen minutes. It is no wonder that there is a lot of Heart Attacks in Law Enforcement and the Fire Service alike!The fact that you are out there at the age of 50 chasing these 22-30 year old officers that have just decided to make their life more serious and get a career job. Most Officers that get into the Patrol Car are those that have not graduated Collage with the exception of their credits for graduating the Academy! It is a job that allows the lower income family to get a job that offers a good pension, with benefits and they are allowed to raise a family on a good paying job.The fact that most I say approximately half of all people that enter Law Enforcement end their career due to that back injury, or like me an Automotive accident, that Killed me. I only know of two officers that had Retired with a straight Retirment, and in that the one will probably submitt doctor's reports to change their retirement from a Regular Long term Retirment, to a Medical Retirement. The medical retirement allows the payments to the person to be Tax Free, it is a benifit that is passed to the law enforcement officer. My retirment on the other hand was also tax free but instead of getting a full retirment I got 50% of my pay tax free. I was making Just under Eighty Thouseand Dollars a year to $24 thousand a year! I don't have to tell you that it was a small adjustment, but it was huge, I am still not quite recovered from the loss of all that money each year, if I didn't have a strong family I would be bankrupt today with out a house!The fact that a large amount of Officers go onto a Medical REtirement before they are able to put in for a regular retirment system, just

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