City at Impasse with Police and Fire Bargaining Units
The City will be meeting with State mediators to attempt to work out an agreement with the public safety bargaining units. Being in the midst of negotiations, the City did not disclose points of disagreement. However the 2011 Municipal Tax Revenue Committee (MRTC) along with the Budget Advisory and Financial Planning Committee have pointed out the need for significant changes in compensation for all Piedmont employees. Recently, certain employee groups have agreed to reducing pension provisions for new employees, creating a “2-tier” pension plan, and contributing $100 per month to their underfunded retiree health benefit. These new provisions are intended to provide budgetary relief in future years. The City currently faces $40 million of unfunded pension and medical benefits.
Unless all cooperate, all will suffer. Needlessly.
Looking at this from more of a Statewide perspective, it should be noted that California has the highest paid public employees in the nation (see US Census website). California also has the most financially distressed local governments in the nation. Reasonable minds would probably see a connection between these two sets of data.
Public employee unions blame the distress on the evil guys on Wall Street that have ruined the anticipated rates of return of pension funds causing local jurisdictions to spend their own money on the contracted generous pensions. While true, the returns are what they are. That is the fiscal reality. Public employee unions also continue to demand pay raises based on “prevailing wage” studies. Pensions are based on wages earned.
I have concluded that the only way to get off this disastrous merry-go-round would be some sort of Statewide Initiative that prohibits public employees’ pay raises until California was no longer in the top ten highest paying states in the union. The well paid public employees would remain well paid, but the situation would not get worse. Individual city-by-city budget fights simply won’t do the job. Possibly the Howard Jarvis Foundation or similar taxpayers groups could work on this idea.
I spoke before Council 7/16/12 urging them to not place the Parcel Tax on the November ballot. My ongoing process issues include a lack of honesty and transparency at the City, and a process that does not allow equal participation. Essentially the November Parcel Tax will be a referendum election. However, failure of the tax will have not only direct positive consequences, both as a message and directly curtailing runaway spending, it will also put the City in a stronger bargaining position with the Unions through the State mediators. Piedmont will be able to legitimately argue that the funds are no longer there for the very expensive pension/benefit packages.