Public pensions
. . . are much in the news.
Former Kinko's CEO Dan Frederickson (whose new office building is moving forward on California Street) recently circulated a story from the conservative magazine Newsmax headlined: "Three Trillion Dollar Pension Crisis Threatens Cities, States." Meanwhile, the City Council narrowly approved a new contract for Ventura's firefighters that included a controversial provision to upgrade their pension plan a year from now. And a union representing rank-and-file city workers is also pushing for enhanced pension benefits.
Is there a public pension crisis? Is Ventura crazy to even consider increased pension obligations?
Yes and no.
Yes, there is a public pension crisis. Just like there is a Medicare and Social Security crisis. Just like there is a national debt and infrastructure crisis.
Oh, yeah. Yawn.
As a nation, we've committed ourselves to long-term debts that are not sustainable. We can't afford the cost of entitlements over the lifetime of retiring baby boomers. Any serious observer would acknowledge this. But are either of the candidates for president? No. Why? Because it is a huge and insoluble challenge that can be safely put off until someone else's term in office.
So, is Ventura crazy for even considering enhanced retirement benefits for firefighters? Will we soon be following Vallejo to bankruptcy court?
Well, no. Certainly the critics are right that we have a big problem as a nation. And certainly we here in Ventura need to be cautious about the long-term implications of what we do today. But in fact, Ventura has been very cautious and is only belatedly surrendering to the realities of the marketplace.
Two points. First, Ventura does not have any lifetime medical benefits for retirees. Both Oxnard and Thousand Oaks do. That problem is a much more pressing one. Ventura has always held the line.
Second, when Ventura upgrades its pension plan for firefighters next year, we will be the last one of our size (or larger) in the entire state to abandon the old 2% at 50 formula. Nor are we going to the most common standard -- the one offered by all our surrounding, competing agencies. Our firefighters settled for a middle ground plan -- and no general salary increase, despite being 10% below the average pay in comparable agencies.
Of course, much of the online reaction to this news in the Ventura County Star focused on whether firefighters deserve enhanced compensation. One camp took the "they put their life on the line" stance. The other took the "they have a cushy job that mostly involves sitting around the firestation when they are not jogging at the beach" tack.
Both are pretty shallow and beside the point.
The reality is that Ventura residents expect first-class emergency response to medical emergencies, industrial accidents, toxic spills, natural disasters, and, yes, fires. Yet compared to the County (which serves Camarillo, Thousand Oaks and Simi Valley) we have long eaked out delivering that service with lower staffing levels; lesser equipment, stations and training facilities; and much lower pay and benefits (at one point, County fire captains were making $1000 a month more than our people, plus a significantly better pension.) Of course, as a result, our emergency protection costs less than it would cost for the County to provide it -- between $4-5 million according to a study done to look for cost savings. Instead, of course, it turned out that it would cost more.
So it is really a business decision. Today, we struggle to find and keep the top-flight talent that we can trust to open a breathing passage in your child's throat or handle an accidental release of an odorless poison or travel 400 miles to spend three weeks fighting wildfires under our mutual aid obligations. Contrary to outdated stereotypes, these college-educated, experienced professionals are not sleeping overnight to line up to qualify for these jobs. In fact, last year we went several months before we could find six recruits to put through the intense fire academy. Only five graduated, only four remain with us. Our standards are tough.
Reasonable people can second-guess labor contracts -- the split vote on the Council is an indication that balancing budgets and keeping the right talent are tough challenges. But no, we are not going bankrupt, nor has the City lost its mind. We have huge pension challenges as a nation -- but here in Ventura, we are working hard to keep the community safe. That comes at a cost -- both financial and in political terms. But safety is not something that any community can sell short.
Former Kinko's CEO Dan Frederickson (whose new office building is moving forward on California Street) recently circulated a story from the conservative magazine Newsmax headlined: "Three Trillion Dollar Pension Crisis Threatens Cities, States." Meanwhile, the City Council narrowly approved a new contract for Ventura's firefighters that included a controversial provision to upgrade their pension plan a year from now. And a union representing rank-and-file city workers is also pushing for enhanced pension benefits.
Is there a public pension crisis? Is Ventura crazy to even consider increased pension obligations?
Yes and no.
Yes, there is a public pension crisis. Just like there is a Medicare and Social Security crisis. Just like there is a national debt and infrastructure crisis.
Oh, yeah. Yawn.
As a nation, we've committed ourselves to long-term debts that are not sustainable. We can't afford the cost of entitlements over the lifetime of retiring baby boomers. Any serious observer would acknowledge this. But are either of the candidates for president? No. Why? Because it is a huge and insoluble challenge that can be safely put off until someone else's term in office.
So, is Ventura crazy for even considering enhanced retirement benefits for firefighters? Will we soon be following Vallejo to bankruptcy court?
Well, no. Certainly the critics are right that we have a big problem as a nation. And certainly we here in Ventura need to be cautious about the long-term implications of what we do today. But in fact, Ventura has been very cautious and is only belatedly surrendering to the realities of the marketplace.
Two points. First, Ventura does not have any lifetime medical benefits for retirees. Both Oxnard and Thousand Oaks do. That problem is a much more pressing one. Ventura has always held the line.
Second, when Ventura upgrades its pension plan for firefighters next year, we will be the last one of our size (or larger) in the entire state to abandon the old 2% at 50 formula. Nor are we going to the most common standard -- the one offered by all our surrounding, competing agencies. Our firefighters settled for a middle ground plan -- and no general salary increase, despite being 10% below the average pay in comparable agencies.
Of course, much of the online reaction to this news in the Ventura County Star focused on whether firefighters deserve enhanced compensation. One camp took the "they put their life on the line" stance. The other took the "they have a cushy job that mostly involves sitting around the firestation when they are not jogging at the beach" tack.
Both are pretty shallow and beside the point.
The reality is that Ventura residents expect first-class emergency response to medical emergencies, industrial accidents, toxic spills, natural disasters, and, yes, fires. Yet compared to the County (which serves Camarillo, Thousand Oaks and Simi Valley) we have long eaked out delivering that service with lower staffing levels; lesser equipment, stations and training facilities; and much lower pay and benefits (at one point, County fire captains were making $1000 a month more than our people, plus a significantly better pension.) Of course, as a result, our emergency protection costs less than it would cost for the County to provide it -- between $4-5 million according to a study done to look for cost savings. Instead, of course, it turned out that it would cost more.
So it is really a business decision. Today, we struggle to find and keep the top-flight talent that we can trust to open a breathing passage in your child's throat or handle an accidental release of an odorless poison or travel 400 miles to spend three weeks fighting wildfires under our mutual aid obligations. Contrary to outdated stereotypes, these college-educated, experienced professionals are not sleeping overnight to line up to qualify for these jobs. In fact, last year we went several months before we could find six recruits to put through the intense fire academy. Only five graduated, only four remain with us. Our standards are tough.
Reasonable people can second-guess labor contracts -- the split vote on the Council is an indication that balancing budgets and keeping the right talent are tough challenges. But no, we are not going bankrupt, nor has the City lost its mind. We have huge pension challenges as a nation -- but here in Ventura, we are working hard to keep the community safe. That comes at a cost -- both financial and in political terms. But safety is not something that any community can sell short.
posted by Rick Cole at
4:11 PM
5 Comments:
Thank You for blogging. Public financing always has been and will always continue to be an issue in our future. No solution needs to "The solution". Times change, technology changes, Yet compensation can not change?
Open communication/disclosure will minimize the anger and fear that citizens feel with regards to the spending of "their" money. (Whose money is it really?)
Govenments make regulations. Unions provide regulations to their employers. So we have regulated employees regulating the regulators. That is expensive redundancy that citizens pay for.
New idea. All govenment employees work for the union of their govenment. If their government can't figure it out to the employees liking, The employee can go to a different government/company, or go to a different industry. That is how it is on the "outside".
There are very few jobs with guarantees. Unless you offer a VERY unique service. And what I have learned is that every business and or employee in our capitalistic society is replaceable.
Corporations from time to time have to "update" their culture to remain viable.
Consolidation/mergers are common in business. And the consolidated company does not always pick up the past benefit structure. Unprofitable businesses are removed from the game. If a City is unprofitable what happens?
The objective of some public services seem similar/identical. Firemen need to put out the fire in Oxnard, Sacramento, or Ventura yet they have different compensation and organization structures. Given the nonexistent competive environment, that seem inefficient.
Can cities merge with other City's?
Maybe being a city is too expensive in our future govenment?
Change can be our friend.
Let's merge with Oxnard, create a new city named Voxen, and then buy Santa Barbara.
We can save money and make money. The new American way.
Thank You,
A citizen in Ventura
I haven't conducted a poll, however I got the impression from local online responds that the timing for this [or any] increase may not be the best.
So the question that comes to mind is why weren't the adjustments made when the city was in better financial health?
Generally speaking, many have no idea of where city money is spent which may explain the knee-jerk responses.
As mentioned everyone wants quality emergency services; so why are they not a primary expense, (everything else is secondary)?
With that said, I felt the 911 fee/tax was un-necessary, funding should've come from the existing budget. If cuts in other areas have to made, so be it.
Thank you for providing this blog..
P.
Thoughtful comments from "Anonymous" and "Pete."
We struggle with comparisons between government and business. If a business pays its workforce "too much," then it will won't be in business long. Yet that system is hardly perfect, with its shipping jobs overseas, criticism of lavish management salaries and perks and boom and bust mentality.
The question of "who guards the guardians" is at least as old as Plato. How can the citizen wade through official spin, political propaganda and uninformed nonsense to find the substance underneath?
Pete is right. It is not an ideal time for Ventura to increase compensation for staff members, even those far behind their counterparts in other cities. Actually, our staff understand this. That's why they've been patient with us as we've worked to manage our resources prudently.
That's why the latest Fire contract ended up with a 4-3 vote. It was, as they say in baseball, a close call. On the one hand, the entire Council acknowledged that we have long been behind other agencies. The majority cited the increasing difficulty we are having in attracting and retaining qualified firefighter/paramedics. The minority argued that changing our pension was a stretch too far for our strained budget. Both were "right" -- and cast their ballots based on the weight they gave those conflicting realities.
The deal itself involves putting off the pension upgrade for a year and choosing a less expensive plan than our counterparts. That made the difference for the majority.
As I noted, reasonable people can disagree. But putting public safety first is something almost everyone can agree on.
Mr. Cole,
Thanks for providing this blog. As a citizen of Ventura for the past 10 years and someone who is active in the community, I find your blog very informative. I like the way you explain things clearly. As far as this tax payer is concerned, you're worth every cent we pay you! Keep up the good work!
I very much resent the combination of whining and perpetual dissatisfaction expressed by the fire/police brigades throughout this state. Each city compares itself unfavorably to the nearest city with a higher pay scale. There is never any discussion about the quality of work - only about the amount of pension. Recently Ventura paid some fire chief type over $700,000.00 basically because his feelings were hurt and he wanted to work from home - as a blooming fireman. Most firemen's schedules allow them to have dual careers plus a taxpayer-paid pension. Any fireman killed on duty anywhere within the USA entitles his/her family to a $150,000.00 check - anywhere in the US. Get a grip, firemen, and stop your bellyaching. If Ventura divorced its fire dept. from running its bldg. dept. it would probably save the city a heck of a lot of money as well.
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