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News / Perspective Correcting An Unjust Pension Spike, Fixing Pension Potholes
March 18, 2008 City Council closed session agenda:
Mayor and Council adjourn to closed session in the Council Lounge. Pursuant to Section 54957.6 of the California Government Code regarding labor negotiations with represented employees: City Designated representative: Patrick H. West; Employee Organizations: Long Beach Fire Fighters' Association; International Association of Machinists and Aerospace Workers, Local Lodge 1930 District 947.
(March 23, 2008) -- The item above from the March 18 City Council "closed session" agenda indicates that Councilmembers and city management met behind closed doors on negotiations with the Machinists union representing non-public-safety city employees and separately with the LB Firefighters Ass'n.
The Machinists union is the one to which City Hall improvidently granted the costly, taxpayer-draining pension spike under former Mayor Beverly O'Neill. (The City Council gave Firefighters a separate pension increase in separate negotiations applicable to public safety employees. Our comments here relate to non-public-safety employees).
Even if the non-public-safety pension increase itself can't be undone, we believe many of its present day consequences can and should be substantially reduced.
By this, we mean the City Council should direct city management to negotiate give-backs; requiring larger employee contributions to their pensions; a freeze and/or rollback on wages; a mixture of these elements and perhaps others to produce an outcome that, in effect, makes LB taxpayers whole or substantially so for the damages done to them in 2002.
Unfortunately, if a story and subsequent cheerleading editorial in the Press Telegram is accurate, we fear the opposite may be about to occur.
On Feb. 27, the Press Telegram's Paul Eakins reported that management is now using a new negotiating system called "Interest-based bargaining" which "allows the city and the unions to put all of their cards on the table, explain what they want and try to find ways to make both parties happy, with the help of a mediator."
PT reporter Eakins indicated "[City Manager] West said reaching an agreement that meets the unions' pay raise expectations could be "incredibly tough" with the budget situation. "That said, we can't balance our budget on the backs of our employees," he said. "We've got good employees, and they deserve good wages."
Pardon us...but LB taxpayers are the parties who deserve relief. LB taxpayers were the ones hurt by the pension spike.
We cite no less an authority than then-Mayoral candidate Bob Foster in 2006.
 Below are extended transcripts from the March 23, 2006 Mayoral candidates forum sponsored by the Los Altos Neighborhood Association South (LANAS) at Bixby Elementary School. LBReport.com's publisher moderated the event (and provided the first citywide on-demand webcast of a LB Mayoral forum).
When asked about the pension spike, candidate Foster said:
Candidate Foster: This is a long-term obligation that will continue to grow as members of the city staff retire. This is something that is not prudent business practice...We're going to spend a fair amount of time having to correct it. A lot of it's going to have to be across the collective bargaining table to fix this...It's going to take a lot of hard, labor negotiations to fix this.
We pressed further:
LBReport.com: If the non-public safety employees have, in my words now, effectively priced themselves out of the sustainable wage and pension package for Long Beach city taxpayers, why not have layoffs? Why not, if you were Mayor, say you know, this is really not financially sustainable. I'm just playing Devil's Advocate here but, if this is not financially sustainable, maybe it's not just across the bargaining table, it's saying 'we just can't afford this anymore.'
Candidate Foster: I think that's correct. I think one of the things that I have done...as I said I head the collective bargaining committee for the CSU and I also did a lot of labor negotiations with Edison, in fact we changed our entire health care plan and were able to get agreement, but the point of this is that you have to be able to not only bargain but you have to be able to let and inform organizations that this may not be sustainable, and if it's not sustainable that does lead to layoffs. That does lead to consequences. And so that is exactly what you have to do. And if it comes to that, it comes to that, Bill.
Two months earlier in January 2006 at a League of Women Voters forum, candidate Foster said of the pension spike:
Candidate Foster: ...This was something that should not have taken place...The solution is going to be a very disciplined approach on two levels. First of all, you have to [inaudible] at the bargaining table and some of the new contracts, for police for example and the proposal for miscellaneous employees, have impact, where the employees are paying part of that pension that eases the burden on the city. And there's also a proposal to have a two-tier system, where new employees are on a different pension program. Those are the only two solutions with us. And we're not in a San Diego [near bankruptcy] situation but this is something that requires fiscal discipline, it's something that probably should not have occurred. Certainly we're going to have to be vigilant.
Earlier in the forum, candidate Foster acknowledged that former Vice Mayor Drummond was "partially right" and advised that City Hall had to fix its structural deficit ("so that one-time, windfall items are used for infrastructure") and ensure LB gets Sacramento tax dollars in a bond then-being co-written by Senator Alan Lowenthal. "We'll have a substantial amount of funds coming in [with that]," Foster said. [CA voters approved the bond and LB City Hall now stands to receive millions from it.]
Councilman Colonna responded to the issue by offering an explanation of the status quo. He said City Hall had negotiated a second-tier pension plan. It has less costly benefits for new employees. He said this would reduce City Hall's costs. He said the pension system is now fully funded and back on track.
The defenses didn't withstand Drummond's onslaught...when he told the Los Altos audience that under the old pension scheme, long-timers could collect up to 130%+ (with Social Security) of what they made...while under the new pension system they could get 100% (with Social Security) of what they'd made.
We watched as jaws dropped and audience members shook their heads in disbelief. The pension spike infuriated LB taxpayers for many reasons, including the way it was imposed and the "let them eat cake" way it was treated.
It was enacted in a now notorious pair of Council votes, agendized under former Mayor Beverly O'Neill (whose office oversaw the agenda) for the final day of an outgoing Council and the first day of an incoming one. That was a period when media attention would likely be distracted onto ceremony instead of substance.
LBReport.com reported the votes; others didn't. They were both 9-0. On the first vote: Yes: B. Lowenthal, Baker, Colonna, Carroll, Kell, Richardson, Grabinski, Webb, Shultz. On the second vote, incoming Councilmembers Reyes Uranga and Lerch replaced Grabinski and Shultz...and were handed the stink bomb item on their first Council day in office.
The votes came after O'Neill herself was safely reelected to a third term in a write-in campaign that assured voters that she had the city "on the right track." Within weeks of the votes spiking the pensions, Mayor O'Neill announced that City Hall faced a financial crisis.
In the same April 2006 election cycle, challenger Laura Doud hammered incumbent City Auditor Gary Burroughs over the pension spike. Candidate Drummond backed Doud based on her criticism of the pension spike. The Press-Telegram endorsed Burroughs. Voters elected Doud in a landslide.
Small wonder that as Foster and Colonna headed into a June runoff, Foster quickly embraced Drummond's endorsement...and the Foster campaign focused on the "pension spike."
[previous LBReport.com coverage]
 (April 17, 2006) -- Less than a week after finishing third (roughly 19.3% of the vote) to Frank Colonna (28.3%) and Bob Foster (48.4%), retired Councilman Doug Drummond today (April 17) endorsed Mr. Foster for Mayor.
The announcement came at a midafternoon press event attended by both men in a 3d district neighborhood near Kettering Elementary School. The street included what Drummond called "pension potholes," a jab he frequently made during his campaign in pointing to Colonna's 2002 vote (part of a 9-0 Council action recommended by former management) boosting pensions for non-public safety employees...
 A press photographer snapped photos of Messrs. Foster and Drummond shaking hands as of some of Drummond's former campaign workers held Foster for Mayor signs in the background.
"How do I get one those signs for my yard?" Mr. Drummond said
Drummond, who represented the 3d Council district for eight years immediately prior to Colonna, led into his remarks with some extemporaneous comments to reporters. Gesturing to the street in the area 5th/Silvera, he said:
Mr. Drummond: ...See, everything right up the street still bad [broken parts of street surface]. It's pension potholes all over the city. That's what we have, because basically Frank was part, a big part, of voting for the pension spike that destroyed the budget. Now, we have pension potholes and the children in this school don't have the library hours on evenings and weekends that they need.
And I think that the only guy that can fix it is Bob.
He has the background in big business to get his arms around it. He also knows how to bring people together. And you know what? He has the character.
 And the pair shared a hearty handshake...
What Candidates Doug Drummond and Bob Foster said about the pension spike made sense to a majority of LB voters in 2006.
We don't think it will make sense to the same voters if Mayor Foster doesn't apply his negotiating skills to provide LB taxpayers with the relief they deserve.
The public likes and respects Mayor Foster. They can see that he's a breath of fresh air from the administration that preceded him.
But by November, gasoline may be roughly $4/gallon and a recession will have forced cutbacks elsewhere. Families and businesses deal with less revenue by spending less, not spending more.
In that atmosphere, we don't believe LB voters will vote to incur more debt and pay higher taxes to fix pension potholes from a pension spike whose consequences their Mayor and Council don't correct.
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