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How Will Taxpayers Fund San Leandro's $189 Million Benefit Burden?

The City Council will hold a workshop at 7 pm on Monday, February 25, to discuss how to finance health and retirement benefits for cops, firefighters and City Hall staff.

 

San Leandro taxpayers face a financial time bomb.

They are responsible for $118,819,000 in health and pension benefits for city staffers, police and fire fighters.

The money to pay for those promised benefits has yet to be identified.

To put this in perspective, the City's general fund is $76 million, Mayor Stephen Cassidy wrote in an email.

On Monday, February 25 at 7 pm, the City Council will hold a work session on how to meet these long term unfunded liabilities for pension and heath care expenses.

The unfunded liabilities are:


  1. All city employee unfunded retiree health care liability - $16,179,000
  2. Non-public safety employee unfunded CalPERS (pension) liability - $36,625,000
  3. Police officer unfunded CalPERS (pension) liability - $47,597,000
  4. Fire Department unfunded retiree health care liability (owed by City of San Leandro) - $18,418,000

That totals $118,819,000.

There will be presentations from our Finance Director and the Alameda County Fire Department (with whom the City contracts for fire services - the firefighters stationed in San Leandro are not City employees).

City officials got a preliminary look at these liabilities during a planning workshop they held in January. 

You can read the presentation from that workshop at http://sanleandro.legistar.com/View.ashx?M=AO&ID=9659&GUID=9ab25371-294b-44a4-9fd8-61e607adcd58&N=UG93ZXJQb2ludDogMjAxMi0xMyBDQyBXaW50ZXIgUGxhbm5pbmcgMS0yNi0xMyAoZmluYWwp

Alameda County officials have been asking similar questions about how to pay for future health and pension promises, as this Patch article explains.

Unfunded pension liabilities are also of concern at the state level, and the same issue faces state and local governments throughout the nation.

Do you have a pension, 401K or retirement health program other than Social Security and/or Medicare?

 

Leah Hall February 26, 2013 at 12:38 AM
Glad to see slide 21.... New Pension Reporting GASB 67and 68 • New pension reporting requires governments providing defined benefit pensions to: 1. Recognize long-term obligation as liabilities on balance sheet for the first time 2. Measure annual pension benefit costs more comprehensively and comparably 3. Enhance pension plans note disclosures and required supplementary information • GASB 67 implementation in 2013-14 • GASB 68 implementation in 2014-15 Relatedly, I thought some readers might find this article on San Bernadino's bankruptcy protection in Reuters interesting: "Special Report: How a vicious circle of self-interest sank a California city" http://www.reuters.com/article/2012/11/13/us-bernardino-bankrupt-idUSBRE8AC0HP20121113 Hopefully, our citizens and leaders will /pull together/ and refuse to allow the same fate for San Leandro. That plus a great accountant is worth its weight in gold. May we be wise and kind to one another.
David February 26, 2013 at 02:56 AM
Simple. We won't. Promises that can't be kept, won't be kept.
Leah Hall February 26, 2013 at 03:38 AM
May the vicious circle, be unbroken. David is channeling his inner Johnny Cash.
jeffrey olsen February 26, 2013 at 07:14 AM
Bankruptcy of the City of San Leandro - today, All these people from the police union pocket, if Prola takes money from police union for election and other City Hall people connected to this union .....out today This is my opinion.. Unions are taking from our pockets many times more than all criminals together, The Armed citizens are the best protection against East Oakland criminals. I have no obligations to the union,after East Oakland gangster with gun came to my home with death threats, and my complaint to SLPD was copied to this gangster word by word immediately. SLPD is a bigger threat for citizens than criminals today,actually,my own experience says after this case ,SLPD should be closed and hired from the ground.I know that hundreds police officer relatives,other public unions members will start to scream opposite,because they need our money,but i say them Enough is Enough.
David February 26, 2013 at 01:18 PM
Math is a harsh master, Leah. You'll understand soon enough.
Tom Abate (Editor) February 27, 2013 at 01:26 AM
The pension imbalance resulted from the false illusion, shared by many in the early 2000s, that the stock market would soar forever and that appreciation in portfolios would provide painless raises. Now that the stock boom (and housing boom) have gone bust, what do we do? Get deeper contributions into pension funds from employees -- in effect pay cuts. Which may explain why the city manager (who pays his share of pension costs) is still negotiating with police and other city employees to get the same concessions.
David February 27, 2013 at 03:13 AM
Yes, it's time for shared sacrifice as the politicians like to call it when they raise our taxes. Taxpayers have suffered an 8% on average pay cut over the Obama years; it's time our "public servants" who are on our payrolls share in our sacrifice.
Leah Hall February 27, 2013 at 05:39 AM
Musings on false perception and mass illusions.... http://www.tumblr.com/tagged/american%20again
David February 28, 2013 at 02:45 AM
Californians' expensive education failure http://washingtonexaminer.com/conn-carroll-the-california-spending-rush/article/2522627 Between 2000 and 2010, the CTA spent more than $211 million to influence California voters and elected officials. That is more money than the oil, tobacco and hospital industries combined. At an average salary of $69,434 per year, a family of two teachers would bring in almost $140,000 in income per year. That is almost triple the state's $57,000 median family income -- and teachers get summers off. But all of that money for teachers salaries hasn't helped students in the classroom. By 1992, the first year for which state-by-state comparisons are available, California ranked second to last among states tested (ahead of only Mississippi), in reading proficiency among fourth-graders. Since then, California per pupil education spending has continued to rise, and student test scores have not. In 2011, the most recent year available, California eighth-graders finished 48th in reading, ahead of just Louisiana and Mississippi, and 48th in math, ahead of just Alabama and Mississippi.
Leah Hall February 28, 2013 at 03:56 AM
http://www.cpec.ca.gov/FiscalData/MedianIncomeGraph.asp Two things: --David is fully aware that teacher salaries are not funded by the city (teacher salary funding comes from the state + federal funding). This Patch Article subject is city employee wages, correct? Why does David persist in flitting around between subjects when he obviously knows better? -- Teachers earn bachelors degrees and higher, which puts salaries at a different level (see the link I posted).
Leah Hall February 28, 2013 at 04:06 AM
That said, three-ish months off each year sounds like something all Americans would benefit from.
Robert Marrujo February 28, 2013 at 04:35 AM
It seems that David is making a correlation between mismanaged finances within the educational system (and the lackluster results we have seen as a result) and the fiscal crisis revolving around pensions and health care being described in this article.
Leah Hall February 28, 2013 at 05:37 AM
Tedious.
Robert Marrujo February 28, 2013 at 07:50 AM
I didn't realize making a reasonable analysis of situations that impact everyone was "tedious". Just because the things David says threaten people with fragile and limited worldviews doesn't mean they should be bashed or undervalued. It's certainly more useful than vomiting the results of Yahoo! search bar quarries all over the comments section in order to avoid facing hard truths, as some people here tend to do.
Leah Hall February 28, 2013 at 08:15 AM
Yawn...I sure wish someone's sister would comment more often here on this desert we call Patch. ;-)
Robert Marrujo February 28, 2013 at 08:42 AM
That's the second time you've tried to chide me with my sister. You should be made aware that people like you are the reason she doesn't comment on here nearly as much as she used to. You bring nothing to this site but skewed, simplistic views that you try to bolster with endless links and misdirection. Angie literally can't stand the bigoted and ignorant comments that you and others make, which has sadly driven a very good person who's lived in SL her whole life from enjoying a site dedicated to a city she cares about.
Robert Marrujo February 28, 2013 at 09:03 AM
Frankly, I find you both repugnant and disturbing based on our interactions. You made judgment calls about me as a person based off of a Patch bio, ignore simple questions and plain facts, and stalk David's posts endlessly. You literally respond with gibberish at times. What your goal is when commenting on this site is a total mystery, as you do nothing but bring confusion and conflict wherever you post with no sense of direction or meaning. I find myself on opposite political polls with people like Marga, but she at least says things I find reasonable from time to time. What you do just seems to be a ceaseless devolution. I can only hope you make your presence less known in the future.
Rob Rich February 28, 2013 at 02:36 PM
I hope the Patch stays on this important story.
Leah Hall February 28, 2013 at 05:16 PM
Hear, hear!
Tom Abate (Editor) February 28, 2013 at 07:24 PM
Patch will try to stay on top of this but as Patch did not attend the budget workshop where this was aired that is not much in the way of followup. If anyone who did attend can synthesize the suggestion, please do. Meanwhile, he options would seem to include shifting money from other programs, increasing revenues (taxes and fees), and/or getting steeper contributions from sworn and non-sworn employees, effectively capping or cutting their pay.
Tom Abate (Editor) February 28, 2013 at 07:25 PM
Patch will try to stay on top of this but as Patch did not attend the budget workshop where this was aired that is not much in the way of followup. If anyone who did attend can synthesize the suggestions, please do. Meanwhile, the options would seem to include shifting money from other programs, increasing revenues (taxes and fees), and/or getting steeper contributions from sworn and non-sworn employees, effectively capping or cutting their pay.
David March 01, 2013 at 12:29 AM
Interesting. Remind me again where that new parcel tax is going?
Leah Hall March 01, 2013 at 03:30 AM
Two things: --David is fully aware that not one dime of city money has been spent yet from the Measure L 2/3 voter supported parcel tax. --39 dollars per year divided by 365 days comes out to be about eleven cents a day or 77 cents per week to gain a small measure of control with things like reasonable classroom size. No wonder it passed with 2/3 voter support.
David March 01, 2013 at 04:15 PM
Leah, you're fully aware that over half of SL's property tax revenues go to Sacramento for...schools. You're also fully aware that the parcel tax hike (by definition approved by 2/3 of voters) is going to schools, which have proven to be poor stewards of taxpayers' money. QED. And yes, you're fully aware that cops' and firemen's pensions are the lion's share of the increasing projected budget deficit for the next few years, and will only increase due to low interest rates that are likely to continue until at least 2015-2017. Or maybe you're not aware of the latter given your aversion to math. I won't go so far as to say money spent on cops is wasted, merely that they are generally overpaid and should be put on a salary scale more similar to, say, NYPD. The schools however, as mentioned above, have been the recipients of an ever-increasing share of my income and we have absolutely nothing to show for it. NOTHING.
David March 01, 2013 at 04:17 PM
By the way, you did look at your link? The median income for a Californian with a bachelor's degree is just under $52,000, presumably for a full work year, also most likely without a pension, retiree health care benefits or near 100% job protection, despite manifest incompetence.
David March 02, 2013 at 10:19 PM
Basically every incremental tax dollar from all the recent tax hikes have gone straight to pensions that are more generous than nearly all that exist for taxpayers. We should ask ourselves why are we willing to continue to throw our money at "public servants" who not only receive more money as salary than 90% of taxpayers, but also have retirement ages lower than 90% of taxpayers, and pension/healthcare benefits more generous than over 90% of the people paying for them. And they have the gall to call public employees "middle class."
Kate March 02, 2013 at 11:07 PM
The city should follow Safeway's lead. Steve Burd a few years back reworked Safeway's deal with the union. People w/ 25 years or more were offered $25K to retire and keep their pensions. Those who stayed kept their pensions, but all future years the workers contributed to their own 401K. All new hires only received the 401K option. It saved Safeway, and something similar should be addressed for all current city employees. All workers (whether public, private or union) should contribute to their own retirement - no free rides. Was it hard on the union workers? Sure - my husband works for Safeway - but it saved the company.

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