Saturday, July 18, 2009

MP3 in the Works or What?

SDCERS prepared a Power Point Presentation for last Fridays Board meeting. The presentation contained fifty-six slides detailing the "Actuarial Implications of FY 2009 Investment Results." Contained in the presentation were options or maybe better stated, "Scenarios" for the future. Starting with slide sixteen (16) you can get a picture of where the fund is and what the ramifications of these scenarios to the City as the "Plan Sponsor" and SDCERS. Slides seventeen (17) to twenty-four (24) provide options for consideration by Board Members to decide what is best for the "PLAN" and the health of SDCERS into the future. Slides twenty-five (25) to forty-four (44) is a summary and examples of the various possibilities available to SDCERS for calculating the City's required contribution or ARC to SDCERS on the employees behalf. Slides forty-five (45) to fifty-three (53) are projections for each of the scenarios provided to the Board for consideration.

So what is this discussion all about? In simple terms, it is talk of a "bailout" on a much smaller scale than what we are seeing across this nation by the Obama administration. Remember MP1 and MP2; schemes that got us into this mess in the first place? The underfunding of our retirement plan so the City and elected officials could spend the money ear marked for pension contribution, on pet projects and other things? Well, this is what they are talking about; another plan to "lessen the load" or "defer" the obligation to future years for the City.

The mayor first floated the idea of changing the "corridor." The mayor went so far as to NOT re-appoint an experienced and educated trustee to replace him with someone he felt would be more supportive of his plan. The pension system's corridor, limits the "smoothing" or averaging of the payment needed from the City to meet the obligations of the plan. The corridor ensures this smoothing does not get too far off track and ensures adequate payments from the City. Confusing I know but bear with me. Because of the economy performing so badly, the pension system's assets are worth much less than before. The smoothing allows the value to be shown at a value higher than actual value by using an average over a specific period of time from high to low. But the pension system's corridor ensures this "smoothing" doesn't get more than 20% out of line. So the smoothing effort is restrained and the appearance of the health of the fund is more closely aligned with reality (sorta).

Scott Lewis in the Voice of San Diego wrote an article; "Amazing Admission; It's Either This or Bankruptcy." Scott generally writes well reasoned and articulate pieces. This article is articulate but to me misses the true point of what the mayor is attempting to pull off. Scott reasons if SDCERS does not make adjustments and allow the city to put off $50 million of their payment; the city will end up in bankruptcy. Scott writes; "Now, we finally have a number measuring the exact distance between the city and insolvency: $50 million." The mayor would have you think that. It is not true in any way shape or form.

Scott details what the corridor and smoothing is and what is being discussed regarding the city and their ARC payment due for the next fiscal year to SDCERS. Scott lays out well the discussion at SDCERS regarding the funding, where the system is, what to expect in the coming years and what options are available. But at the end of his article Scott writes the following;

"For weeks, I couldn't figure out why the mayor would ever consider pushing such a plan. Was he nuts? Had he not seen what similar decisions had done to his predecessor? Now it's much clearer. This time, he really is staring down the barrel of insolvency and he, and the city's powers that be, are doing everything they possibly can to make it shoot somebody else in the face."

"The mayor is bound and determined to prove something: that not being able to make your payment to the pension system doesn't mean you don't have enough money. It just means the rules are wrong. You, residents, are at least technically in control of the situation. You have to decide whether you fear bankruptcy more than you fear the pain of reckoning with what is the defining attribute of the city in which you live: It simply doesn't take in the money it has promised to pay out. You can change all the rules you want. You can count it in different ways. But we now have as clear a reckoning as ever. If the city is forced to put $50 million into its pension fund, it will be insolvent."

Scott, the mayor is not nuts; he is a cold, calculating individual who has an agenda and is using all resources to pull it off. What is the agenda? He is intent on eliminating DROP; reducing retirement benefits; and stripping employees of all reason to work for the City of San Diego. The mayor is staring down the barrel of insolvency NOT because of the payment to SDCERS. He is in fact doing everything he can to make the shot hit somebody else in the face. The mayor chooses to stare down that barrel because he refuses to make the tough decisions. Why in hell is money being spent to look at building a new city hall? Why is money being spent to plan a new downtown library? Why is money being spent to discuss and plan an expansion to the Convention Center? Why has the mayor not yet placed on the ballot an initiative to charge for trash collection? Why has the mayor not yet implemented a plan to charge for parking at beaches, parks, zoo, and wild animal park? Why are taxpayers still paying to provide security at private events like the Rock n Roll Marathon, Street Scenes; Mardi Gras; Padre and Charge games? Why are taxpayers paying the maintenance for fields, courts, lights and security for little league, pop warner, AYSL leagues, youth basketball, tennis and other groups?

My point is the mayor and his priorities are way out of focus and not in step with 2009. The economy and collapse of the markets that resulted in the loss of revenue, has required a re-focus of the priorities of all Americans. We have all made adjustments and changed the way we do things at home. We have put off the re-model of the bathroom, kitchen, front or back yard; we have held onto that car for a few more years rather than take on another payment; we have cut back on our water use, electricity, going out to dinner; we have begun bringing our lunch instead of eating out. Yet the mayor and council continue along with a one billion dollar expansion project to the Convention Center, a similar expenditure for a City Hall and yet another half a billion dollar tab for a downtown library. I could go on with examples of the priorities of this mayor and council but I think you get my point.

That somebody Scott, who is going to get shot in the face, is the poor sap elected to office in 2012 to replace this mayor. The new mayor, stuck with the idiocy of this mayor, will be facing that bullet. The new council (We can all hope it's new) will have to figure out the mess left by this group. Taxpayers have been fed so much crap about the benefits, wages and cost of city employees; we will forever be the cause of the financial ills of this city. The press and politicians have found an easy patsy to blame and we will suffer the consequences for years to come. We could offer up further concessions and cuts and it will never be enough. We could fix the funding issues with the retirement but the mayor and council refuse to listen. They know better and besides; if it's fixed, they could no longer use us as an excuse.

The city will not become insolvent if they are made to pay the $50 million they owe SDCERS. Changing the corridor may very well be acceptable and necessary to assist short term with the lack of revenue. But it must be temporary and only if the mayor and council begin to honestly seek reductions in services; increase in fees and revenue and STOP the nonsense around the Convention Center expansion; City Hall planning and the new Downtown Library. Until then; I'm sick of giving back, when all I see from city hall is more spending on projects that we cannot afford all the while telling the taxpayer more reductions and cuts to employee wages and benefits is necessary.

8 comments:

Just Wondering said...

Atypical is the current state of economics in the world today. Why? There are many reasons but most are related to twenty years of consumption beyond everyone’s means.

With that said, DO NOT equate what's going on with the economy and the goals of Jerry Sanders. He’s a politician now, that means he's a cheat and a liar no matter what positions he’s held in the past. To use an analogy contemporary with today’s newer city employees, even loving Anakin Skywalker became evil Darth Vader. People change, power corrupts and destruction follows thereafter.

Sanders may not actually be Darth Vader, but his desire for power are manifested in the strong arm domination over the city and its employees. When was the last time you felt free to speak your mind about things going on at the city?

Lets not forget, in December 2012, sooner if the right offer comes along, Sanders walks away, not accountable for anything he's done. He'll be laughing all the way to the bank collecting his pension and FULL MEDICAL BENEFITS. The same medical benefits you were promised but will not receive.

If carefully exam Sanders' history with the City we find a pattern of contemptuous behavior and control over his peers. One can describe it as arrogance. Whether it was suing for promotion or letting the bloodbath at the McDonalds in 1984 continue because he was not at the scene this man could care less about his fellow human beings, no it all about Gerald Sanders. Just last year when it suited him to support his lesbian daughter and same sex marriage, politician Sanders shed a tear. But years of jokes about gays and their lifestyle as an police officer, supervisor and manager meant nothing. But I digress.

Aberrant means straying from the right or normal way. In the context of this rant I could be talking about a lot of things but aberrant in this case is about the investment earning of SDCERS. If we examine Cheiron’s presentation to the Board as Sparky suggests we can see there have been times of aberrant investment returns before, and there will be times like these in the future. But in each case investments have recovered and flourished. In fact there have been periods where SDCERS or other public pensions have been flush with cash and swelling with substantial returns.

Today, we are living during aberrant economic times, no overreaction is necessary. Don’t let Sanders scare tactics alter the 30-40 year long term goals of SDCERS.

Remember in 1994 Orange County, California declared bankruptcy after the investment officers there lost billions in investments called “derivatives”. Every single pension remained intact and Orange County emerged from bankruptcy and still exists today.

Anonymous said...

Excellent explanation Steve! Thanks for the education and I hope your information is getting out to more and more people. I passed your site information along to a local community newspaper editor so hopefully he will take a look and generate some interest!

And to add to Just Wondering's comment: It is oh so true, that people (even those we thought were so honest and genuine) change and the power of their "position or rank" (or goal to make the next rank) gets in the way of them doing the right thing and/or treating people right! The lack of sencerity becomes so obvious and their once inspiring words become empty mantras...

Sad state of affairs around the gorgeous City of San Diego and good ole SDPD. We can only pray that there are some real, honest leaders within the ranks that have the determination, stamina and staying power to help us through this mess.

Anonymous said...

Outstanding piece Steve. Do you have a life? If we had people on the SDPOA Board who took as much time as you do to educate and inform we would be so much better off. Oh I forgot; you were on the board and "The status quot has got to go" got us what? I digress.

Thank you for putting this in words even I can understand. I remember a while back there was a rumor you were going to run for City Council. Have you given any thought to this? You are the person who could have an immediate impact on the City. If you have not, you should give it consideration. There are many of us who would help make that happen.

Enjoy your day Steve. Thank You.

POA FOOLS said...

The SDPOA Board is comprised of buffoons who are inexperienced in the negotiations process as well as running a major corporation. Their failures far outnumber their successes.

They have given back much to the City with minimal gains. They gave up F.I.T. They won’t admit it, but they did. Although the City would not enter into a confidentiality agreement during the past labor negotiating sessions, the Board chose to keep its membership in the dark. This was true with even the recent session, where the Board entered the session with multiple give backs.

A true group of amateurs trying to take on the City, Sanders and power broker Thomas Shepherd. The SDPOA Board are fools.

Anonymous said...

"The status quo has got to go" got us what?

The POA Board has rolled over. Fools, Jokers and Jesters. A Troupe du Fools. A regular 3-Ring circus. You are right, they are amateurs who fail to realize they are in way over their heads. They allow the City negotiating team to play mind games with them, and win! The POA was once again out negotiated. The City Council members supported by the POA and the City Attorney crapped all over the POA and its members. So much for political pull.

What worked and what didn’t work? The Board needs to evaluate its tactics. Will Brian just keep faxing out press releases? They go nowhere. What the Board in currently doing obviously is not working, nor is it effective in dealing with the City government. Jeff’s defensive forum posts irritate the members. Randy’s article managed to upset many members as well. What is Woody doing for us?

What will work? Look what worked in the recent past. I’m talking about activism. It’s time to hit the streets. Once again, march downtown. Plan for the upcoming Chargers Season. Get the word out at the stadium. Go to shopping malls. Get press coverage. Time to quit being a pansy-ass. It’s time to stand up to the City. "I'm as mad as hell, and I'm not going to take this anymore!"

It does no good putting out little press releases quoting PolicePay.Net. The citizens of San Diego don’t really care that in FY09 250 cops left SDPD. They don’t care about how much it costs to train a cop, of bring a trainee/rookie up to speed. We keep hearing Sanders and Landsclown singing the tune Crime is Down. And remember, Sanders and the Council are all about getting votes and campaign funds.

SDPOA---Think activism. The squeaky wheel gets the grease.

sparky.sandiego said...

One of the things I learned in my years as a Director for the SDPOA, is nothing you do is going to please everyone. The current board is new, split between experience and young. The "new generation" if you will is running the show. This is the first time in my memory, so many Board members had such young children. This has an effect on their ability to do some of the things that need be done. Family first; or the POA first; it is a choice and a balancing act. It is not easy and unless you are willing to step up and offer your time, life and career; stop complaining.

There is often a call from members to hire a "Professional" negotiator. I for one do not believe that is the answer. Dick Castle is one of the most experienced negotiators in this area and has more institutional knowledge than anyone involved. None of that matters in today's climate.

Until the entire membership becomes ACTIVELY involved in the issues that affect them; they put the good of the membership above their own personal needs; they agree to work together to force the city to fix the current staffing levels through hiring and retention fixes; NOTHING WILL CHANGE.

As long as you have officers knocking each other down to volunteer for special events overtime; taking calls requiring two officers, alone; washing out paper; juggling two and three calls at a time and not finishing them each completely and appropriately; driving by contacts that should be made; giving warnings where a citation is deserved; not putting someone in jail who needs to be there because staffing is short and you don't want to drive downtown; NOTHING WILL CHANGE.

Until you show up at Board meetings and demand the Board become more active in the political activities of the mayor and City Council; attending community meetings; city council meetings; budget meetings, PS & NS meetings; civil service meetings; and the like and you agree to help in this venture; NOTHING WILL CHANGE.

Until you agree to show up and pass out fliers at neighborhood grocery stores to educate the public of the dire position we find ourselves in due to staffing, hiring and retention; providing factual data and a personal incident in THEIR neighborhood; attend city council member community meetings and do the same; town council, community planning groups and the like; NOTHING WILL CHANGE.

The nine board members cannot do it alone. They need to be held accountable. If they are not doing what you believe should be done; shame on you for not stepping up and demanding it. If the board is not representing you the way you believe they should; shame on you for not attending board meetings and demanding they do so.

Ranting on a computer as an "anonymous" person is not going to change anything.

Until the public understands the issues; is personally affected or knows someone who is personally affected; and is offered suggestions for how to fix the problems; NOTHING WILL CHANGE.

The mayor will continue his assault as long as we complain on blogs and forums but fail to get off of our collective asses and do something. "Sick-outs" ARE NOT THE ANSWER. Education; constant vigilance and correcting of miss and false information; sharing with those you come in contact with, the plight you find yourselves in. Constant pressure on city council and the mayor by showing up at their functions and asking pointed yet professional questions and giving real life, real world experiences from your beat to refute their rosy picture of what is really going on, on your beat.

It is up to you; it is up to me; it is up to us, to do something about this. It cannot be left to someone else.

Just Wondering said...

I have to agree with Steve...this is not ALL about the Board. It IS about the membership and IT'S apathy toward most everything.

The City counts on it and UNTIL this changes AND the world economy begins to recovery nothing will get better.

Regarding apathy.

I can cite one very recent example of APATHY on the part of the BOARD AND THE MEMBERSHIP.
On June 25th during a crucial court hearing was held on litigation against the POA and the temporary restraining order. POA president Brian Marvel pleaded with the membership to "pack the court" so the judge would see how serious the members felt about their benefits and the DROP program. NOT ONE MEMBER SHOWED UP FOR THE ENTIRE HEARING. One member, a Sergeant, showed for about an hour of the four hour hearing. Marvel, who sat with the POA's attorney, Michael Conger, was present for nearly the entire hearing but left before the Judge rendered his final oral ruling. I believe the parties are still waiting for the final written version. There certainly is confusion as to who actually won since BOTH SIDES are claiming they won.
But here is the bottom line, NO ONE SHOWED. You folks who complain about the Board will complain from the side lines all the time.

Regarding dissension.

Steve is correct you'll never please everyone no matter what the outcome. Steve is also correct. The membership is DIVIDED and it's getting worse BECAUSE of DROP and tactics used by the CITY. While today a MAJORITY of employees have access to DROP a GROWING NUMBER of MEMBERS DO NOT. Someone mentioned 250 sworn members left in FY2009 that means 250 new members will NOT have DROP and their needs will be completely different from yours.

In a smaller way tactic has been used against the POA in the past with annual leave. I could bank 700+ hours. Others, now a growing majority, are limited by contract to 350 or half of my total. Thus the City creates dissension within the labor group for differing needs.

The City has created more dissension over health care and retiree health care. Employees with families get a larger benefit than those who choose to remain single, so the City has created more dissension between the needs of those in the group. The city is now created differing needs for those nearing retirement over retiree health care. For new, younger officers retiree health care is decades away. For those with 20, 25, 30 years on it proved to be a deciding factor for many to leave before July 1st. But in reality it has and will continue to drive a wedge between the differing needs of the membership.

Free Radical said...

These comments about Jesters and Fools are made from under the cover of an alias from the comfort of an armchair somewhere. It is so easy to sit back and comment instead of volunteering to do the job.....quite cowardly really.

As for activism....lets not forget Marvel and I organized the Raider Rally. Much of the Board at that time, particullarly the President was against it. About 150 Cops out of 2000 showed up. That was after two years of impasse. So much for banding together!

In case you have been living in a bubble "Anonymous", the country is at the edge of financial doom. Let's see what the public would think about a bunch of Cops marching around crying about a paycut, when people are getting chucked out of their homes everywhere. That is why we did not march. We would have gotten crucified by everyone.

I see many of complaints about the Board's performance, but have had nobody show up at a Board meeting or Choir Practice to complain. The next one is 8/13. The Board will be there looking for your comments and suggestions on how we can do a better job for you.

Woody D.