A growing view for solving Davis’ financial problems is to kick the can down the road and hope that the state will come in and fix our problems. Interestingly enough, I have heard this view expressed in numerous places, including indirectly from a councilmember whom I might have considered among our most fiscally responsible, and from other segments of the community as well.
For instance, one poster wrote, “The reason I mention this is because it seems likely that some of this will have to be addressed on a system-wide level (beyond Davis). If Davis is somehow able to ‘resolve’ all of these challenges for itself (on its own), it would likely be one of the ONLY communities to do so.”
A similar view was expressed last month when the Toto Project was presented in the Davis Downtown.
Should we wait for the state to bail us out? As one reader pointed out to me, given the fact that the state is in just as bad, if not worse, fiscal shape than Davis, given that the federal government is unlikely to be jumping in to provide funding any time soon, it is unlikely that the state will be the sole source of saving Davis from its fiscal woes.
There are two competing points that need to be addressed – one is whether Davis has self-inflicted wounds and the second is whether the state can jump in to save us.
Davis, through more resilient property values and an overall lack of debt, survived the Great Recession without having to declare bankruptcy. Once again, someone called me this week and suggested that Davis should declare bankruptcy, but the reality is that bankruptcy is not going to solve Davis’ problems because only a portion of Davis’ problems rests in compensation and unfunded pension/health care – a bigger problem is how Davis got into and chose to deal with the Great Recession.
Leading up to the Great Recession, the Vanguard was warning in early 2008 that the city’s compensation system was unsustainable, but that didn’t become evident to our leaders until it was too late. Decisions to put four fire personnel on an engine, increase pensions to 3 percent at 50 for public safety and 2.5 percent at 55 for others and then to give massive increases to compensation between 2000 and 2008 meant that, even with a sales tax revenue, the city revenues could not keep pace.
The city doubled down on the problem starting in 2009 because, instead of fixing compensation, it simply stopped investing in infrastructure – which ended up generating what is now a several hundred million dollar shortfall in deferred maintenance, for everything from roads to parks and greenbelts to city buildings.
Contrary to what anyone says, these were conscious decisions that Davis made that it did not have to make.
The result was that, by November 2014, while the whole state had a problem with roads, Yolo County was below average in the state in the rating system and Davis’ roads were worse than their counterparts in Yolo County – Woodland, West Sacramento and Winters. Yolo County in 2014 had a PCI (Pavement Condition Index) of 60, while the state had a PCI of 66.
Those who argue, well the roads aren’t that bad, are missing a point – as the roadway conditions deteriorate, the cost of repair goes up quickly.
The first chart shows how quickly in the life of the roads the conditions deteriorate:
The second shows how the costs go up from simple repairs to reconstruction:
The second problem that is Davis-specific is that we lack our own revenue sources to recover from shortfalls. As we reported this past year, Davis is near the bottom in terms of per capita retail sales tax, with the city generating about $8400 in a year per person in retail sales.
Woodland, West Sacramento and Dixon are really not that different from Davis in terms of tourism and geography, and yet they are racking up 2.5 to 3.5 times more per capita in retail sales.
The bottom line here is that, while Davis is worse off than others in the state in terms of roads and infrastructure, the city lacks its own economic base to overcome these problems.
Will the state bail us out?
Let us start with the pension problems. In December Mayor Robb Davis called the city’s unfunded liability situation “urgent.” For pensions, the unfunded liability has increased from $85.3 million up to $98.3 million in just a two-year period.
As Mayor Davis told the Vanguard on Thursday, “The most updated analysis by the City-contracted actuary indicates that even if employee salaries do not grow at all over the next five years, our required pension contributions across all employee groups (police, fire and miscellaneous) will grow by over $4.8 million per year compared to today.”
CalPERS (California Public Employees’ Retirement System) has been adjusting its expected contributions from unrealistic and unsustainable modeling to more realistic assumptions. While that is a good thing, each quarter percent decrease in their expected rate of return actually costs cities like Davis another million, which puts Davis more and not less in the hole.
There is little way out of it.
A year ago, Jerry Brown called CalPERS irresponsible for not going fast enough in its revisions to the expected rate of return.
“The CalPERS Board reversed course and adopted an irresponsible plan that will only keep the system dependent on unrealistic investment returns,” Gov. Brown said in a statement. “This approach will expose the fund to an unacceptable level of risk in the coming years.”
The result of that statement from the governor? Nothing. CalPERS ignored the governor.
So is there going to be a state solution here? Not likely, and certainly not one we can count on.
What can we do locally? Probably not too much. Observe that we put in place some reforms that have not yet taken effect for new hires with DCEA (Davis City Employees Association) and the fire department, because these groups have not agreed to a new contract and the city cannot impose new pension systems or rates on bargaining units.
Those who think we can do something more radical like change our pension system are missing this fact.
Finally, there are the roads. Will the state legislature finally pass a roads bill? Here things are more promising. There is progress here, in that Senate Bill 1 cleared a major hurdle this past week, which would generate $6 billion for California’s local and state transportation network.
That sounds good, and the League of California Cities continues to support “the $2.2 billion in additional revenue annual for local streets and roads and provisions expanding the streamline review for projects in existing right of way for all cities.”
The problem is that state and local roads have a maintenance backlog of about $130 billion, and motorists are spending $700 annually on car repairs due to poorly maintained roads.
The League notes, “This backlog is divided between $59 billion for state highways and $73 billion for local streets, roads, and bridges. Without additional funding, this shortfall is projected to grow by $20 billion in the next decade.”
But, given that Davis is in worse shape than most communities but is likely low on the pecking order, even if signed is Davis going to get enough to make a difference? Maybe.
Right now we are spending $4 million from the general fund. We probably need to spend $8 to $10 million, and so another $3 million from the state could be huge – if we get that.
Should we wait for the state to bail us out here and elsewhere, or should we come up with our own solutions and then use state funding to enable us to shift priorities if and when it comes?
More on this shortly.
—David M. Greenwald reporting
First, I definitely do not believe that “we” the citizens of Davis should wait for anyone to bail us out. I believe very strongly in individual responsibility. If we want something, we should assume the responsibility for paying for it.
“Davis is near the bottom in terms of per capita retail sales tax”
What I think is being overlooked in this, and nearly every analysis that I have seen of the financial state of the city, is the assumption that what is needed is more production and sales of products for consumption. We have bet our economic well being ( locally, regionally and nationally) on a ponzi scheme of consumerism. From my point of view, what is actually needed is less consumerism. This does not mean less business. We have many, many real needs in education, in health care, in child and senior care, in science, in clean technologies. But much has been made by some of prioritizing our needs from our wants. Do we really need more peripheral shopping ? Another big box outlet ? A mall ? Outlet stores ? Even if the purported goal is more retail sales tax to be used for infrastructure ? I would strongly argue that these are conveniences, not needs, and that we should be putting actual needs above conveniences.
The innovation center isn’t necessarily based on more production and sales, but rather the development of research and development into market solutions.
“the development of research and development into market solutions.”
“Market solutions” in my mind frequently equals production of more and more products that no one actually needs. Plastics are one of my favorite examples. Plastic bags for example do very little for us that reusable or fully biodegradable bags or baskets would not also do. And yet, they became ubiquitous, accepted as the “convenient” norm despite their environmental problems. Single use plastic bottles are yet another example.
But does creating drought resistant food crops count? Or some of the biotech or medtech startups we’ve covered over the last few years?
Do we stop all research, and the development of new ‘advances’ simply because some of the past products were not perfect? If we take your logic to its extreme, all you would have to offer your patients today are a few herbs and folk remedies. I’m not sure that even you would think that society was better off back then.
If we take a big picture view, every ‘advance’ carries with it some detrimental attributes that are taken into account with the next ’round’ of research and development. Sometimes the choices move us forward as a society, some move us backward. Some, though detrimental, are viewed as necessary in the short term. Bad choices in retrospect, but important stepping stones to a better, cleaner, more sustainable future. The take home message is that advancement does not occur in a straight line, but in fits and starts that no one can predict.
“on a ponzi scheme of consumerism”
That is called free enterprise, dear doctor. While you may have sufficient wealth to carry your share of the services load, many do not and many more are at their limit. Sales taxes are one source of revenue that many argue fairly distributes the load among users. Are you seriously arguing that roads are a convenience?
As Mayor Davis told the Vanguard on Thursday, “The most updated analysis by the City-contracted actuary indicates that even if employee salaries do not grow at all over the next five years, our required pension contributions across all employee groups (police, fire and miscellaneous) will grow by over $4.8 million per year compared to today.”
Sometimes a picture is worth 1,000 words. The following are three graphs from the actuary’s report to the FBC in October that show how annual Pension costs will grow in the coming years
Annual CalPERS Pension Costs for Non-Safety employees
Annual CalPERS Pension Costs for Police Safety employees
Annual CalPERS Pension Costs for Fire Safety employees
We are spending $8.2 million on pensions now ($5 million plus $1,934,000 plus $1,347,000)
In five years, FY 2020-21 we will be spending $13.4 million ($7,670,000 plus $3,152,000 plus $2,579,000).
In nine years, FY 2024-25 we will be spending $16.7 million ($9,506,000 plus $3,971,000 plus $3,242,000)
All of the above projections by the City’s actuary, John Bartel, were based on an official CalPERS investment rate of return of 7.5%. Last year CalPERS actual rate of return was 0.61% and in the year before it was 2.4%. Continued poor investment performance by CalPERS will mean the City’s costs for pensions will increase substantially over the actuary’s projections.
Matt
What does “normal cost” mean in the above graphs ?
Normal Cost is what the City would be paying each year if it had not allowed the unfunded liability to build up over the years. If past Councils had exercised the same amount of fiscal discipline as the City of Fresno (see http://www.fresnobee.com/news/local/article65349437.html) then the City’s annual costs would be equal to the Normal Cost amounts in each graph. The UAL Payment amount shown in the graph is what the City is paying in order to address the unfunded portion of the pension liability. The Total line in the graph is the sum of the Normal Cost and the UAL Payment.
Bartel’s report to the FBC included a graph that showed that the City’s pension liability went from 101% funded in 2002 to 56% funded in 2009. Since 2009, the City’s commitment to making UAL payments has slowly brought the funded percentage up to 66%.
That means that 34% of the City’s Pension liability is earning nothing rather than the 7.5% that CalPERS calculates as necessary.
It isn’t fair to blame the Councils from 2001 through 2009 alone for the problem. The City’s pension liability was 156% funded in 1999, so there was a steady decline from 156% in 1999 to 101% in 2002 as well. So the Councils from 1998 through 2002 shoulder some of the responsibility as well. The drop from 1999 to 2009 was from 156% funded to 56% funded.
John
“Free enterprise”, ponzi scheme consumerism….just two different sides of the same coin. As I have stated frequently, I would not mind paying a higher percentage in taxes than those who are less affluent. However, that is not how we have designed our economic system. We remain adherent to an ideology of a “free market” and “free enterprise” even when the most “free market” amongst us ( Frankly) will admit that this is anything but what we currently have.
Since you raised my personal economic status, let’s use that as an example. The only reason that my compensation is so much higher than others who perform equally if not more valuable services to our community ( police, firefighters, garbage collectors, field laborers) is that my profession successfully managed to limit practitioners thus artificially driving up the compensation of the few who manage to get credentialed. This was done by limiting the number of training positions in medical schools and residency programs. Who got to set the criteria for who could practice and how they had to be trained ? Well of course, the doctors who were already in practice who did not want competition. If you think this results in the best medical care possible, then I have a nice gynecologic procedure I would like to sell you ( fully aware that your gender identification by name is male).
This is the way our economy tends to work overall. Those in power get to set the ground rules for those who are not. In an Orwellian twist, we call this “free enterprise” when it is anything but.
While the trepidatious Don and David choose to censor my comments, I’ll try again to respond to you.
I agree with your response entirely. The best care I have received in the USA has come from your employer. There is no doubt much wrong with the capitalist model, but that is what we have in the USA. until the phony president (Can I call him that without your girdle binding too tightly, Don?) turns us into an oligarchy. I can’t imagine that a few more shops and professionals hanging up yheir shingles will turn Davis into Cleveland, or even Wichita Falls and the increased revenues might help keep the parks green and tennis courts serviceable. Now about those roads…
Yet “another” 15 minutes of infamy, for me!
Glad that I’m not the only one who thinks.
Coming tomorrow – yet another article regarding this subject, or perhaps the vacancy rate. Which one will it be? 🙂
Keep trying, guys!
You don’t get infamy when you post anonymously and your name isn’t cited.
You might be too young to remember the “unknown comic”, from the Gong Show.
https://en.wikipedia.org/wiki/The_Unknown_Comic
Hey – I finally learned his actual name, by looking at the link above.
The Gong Show was before my TV watching time.
“You don’t get infamy when you post anonymously and your name isn’t cited.”
But just like POTUS, you can certainly claim that your “infamy” is much greater than it is.
Ok,ok….just kidding. No need to pile on.
You do get Jimmy Stewart to buy you a martini though.
http://youtu.be/bKECvqSVWPA
Perhaps the vanguard needs to implement a screen name policy that has Harvey as the default screen name for imaginary posters.
[tongue firmly in cheek]
You realize what you said, right? If intentional, funny… kinda like the old poem about the little man who wasn’t there…
https://en.wikipedia.org/wiki/Antigonish_(poem)
Read the poem… might fit better than you’d think at first glance… [tongue not in cheek]
If you have proposed the poem as a motion, I will second that motion for the purposes of discussion.
FWIW, I got a telephone call a little over a week ago from one of the occasional posters here in the Vanguard, who referred to the imaginary poster as “one of his minions.”
My thoughts when I heard that reference channeled Arte Johnson … “Verrrry interesting”
“Who are you? What are you? I think you’re evil, EVIL!!”
https://www.youtube.com/watch?v=l4DHknZNTwQ
moderator: post removed. Until you stop name-calling, I am going to remove your posts. Contact me if you want to discuss this.
David and Mark
“But does creating drought resistant food crops count? Or some of the biotech or medtech startups we’ve covered over the last few years?”
I have consistently stated my support for biotech or medtech “startups” as good fits for Davis because of the location of the university. What I do not feel is good fit is larger scale manufacturing which I feel is a better fit for a larger, more industrialized community or one with widespread desire to become one. I believe from previous conversations here that you both know that to be true and thus question the reason that you even raised that point.
That is why I prefer a case by case approach rather than a “grow as fast as we can” or “block everything approach”. Does either of you really disagree with that ?
There is no nuance in your position when you describe the free market economy as a Ponzi scheme.
Davis should not try to predict what businesses will be successful, or identify businesses that are ‘good fits.’ That is what we tried when we decided to protect downtown businesses and property owners from competition, determining that the new entities were not ‘good fits’ for the community. Our current lack of commercial tax revenues (tot, sales, and property) are a direct result. Continuing with what has been proven a failure is not a smart approach.
“Davis should not try to predict what businesses will be successful, or identify businesses that are ‘good fits.’”
And yet this is exactly what Councilmember Swanson was doing when she stated that it was important that we make every effort “to keep the businesses we have” when promoting the expansion of Schilling. How is this any different from your frequently cited disdain for “protecting” our downtown businesses. I also think that it is a good illustration of how picking “winners and losers” is antithetical to the “free market” that some claim that they support. I believe that it is unrealistic to believe that a community has no business determining what kind of businesses it favors over those it does not. I am sure that there might be a demand for an exotic dance club in Davis, or a marijuana dispensary, or an “escort” service, and yet I suspect there might be significant push back against these businesses. Is that not also “picking and choosing” on the basis of perceived “fit” with the community?
Councilmember Swanson did exactly nothing except make a statement. One person. No effect.
Schilling Robotics is already a successful company that provides high-paying jobs and has a history of providing support to organizations in the community. In short, they have proven themselves to be both successful and a ‘good fit’ for the community. It would be foolish to not recognize those facts and work to keep the company in the community. That is not an example of choosing winners and losers in advance, as would be involved if we followed your advice, but one of demonstrating that we want to keep the winners in place working to make the community stronger.
Protecting the downtown businesses from competition involved preventing competing business from locating in town, which is exactly what we have enshrined in our Municipal Code. That is nothing like your example regarding Schilling as we are not working to prevent their competitors from opening here.
Any community is welcome to decide that there are types of businesses they do not want to have and ban them. However, once we have decided that a certain type or class of business is welcome, then we have no business trying to pick and choose which ones of those types will end up as ‘good fits.’ The businesses that are a ‘good fit’ for Davis are the ones that become successful here. The way to maximize the number of successful ‘good fit’ businesses is to maximize the number of start-ups and then provide locations for the successful ones to expand when needed. It is the expanded, successful businesses that are best able to give back to the community with quality jobs and support for local organizations and non-profits. If all we have room for are the start-ups, we lose out on most of the benefits of those ‘good fit’ businesses.
Here are two things I would like to see us consider/try. One is to make a citywide effort to try to boost downtown as an arts and tourist destination. The other is for the city of Davis to join with other cities, perhaps starting with Woodland and Dixon, to brainstorm about statewide solutions to the CalPERS problem, and then join with other cities to advocate for those solutions. Neither of those involves us waiting to be bailed out.
Good suggestions Roberta.
The City has been working on achieving the arts and tourist destination goal for quite some time. The many examples of the downtown mural project, as well as Second Friday Art About, are examples. The monthly Science Cafe is another potential magnet that could be expanded.
The CalPERS suggestion is a tough one though. The biggest challenge to it is that all the people who would be part of the effort currently have pension benefits with CalPERS. Some people see that fox in the hen house situation as a significant hurdle that needs to be overcome.
Yes, good point – I should have said that the City could build on and expand the efforts that have been made so far.
As someone who has some stake in CalPERS (from my time in the CSU system), I disagree. It’s to our benefit to have this system be workable for the state and continue in a healthy form. Also if some of the people working on a solution have a vested interest, the solution is less likely to be draconian and more likely to be palatable to a majority of Californians. In other words, having CalPERS people work on a solution might preclude some solutions, but the precluded solutions would be ones that would be likely to raise a big stink and be rejected anyway.
Be sure to propose the same type of solutions for the UC pension program, which made neither employer nor employee contributions for many years. At least PERS always had the employee share coming in, whether actually paid for by the employee or the agency.
I see no reason to change PERS without the same, hard, look at STRS and the UC systems… they all should be looked at… the UC and STRS systems are more underfunded than PERS. Has been true for many years…
We also need to look at SS/Medicare… those are both underfunded.
Inconvenient truths…
UC has, in fact, been making changes to the pension system for new employees. Unfortunately, however, our retirement plan was one of the things that we could use to attract new faculty, given that we are underpaid relative to other equivalent universities. These changes will make it harder to attract and retain faculty. That is also reality. The percentage of state funding for the UC system has declined, declined, declined. We need to decide whether we want to support higher ed in this state (I am including the CSU system and the CC system here as well). Even thinking only economically, we ought to be supporting higher ed more than we are, given the huge financial returns to the state in many ways both direct and indirect.
As have local agencies…
Every thing you said also applies to local agencies… pretty much equally…
Wish Napoleon Pig as still around…
Guess all public employees are equal, but some appear to be equal than others, from your apparent perspective.
I could say the same as to whether folk want to support clean water, decent roads, flood protection, social services, etc.
But you are right… higher public education is sacrosanct… my bad, again…
Yep. Where have I said that we should cut funding to local agencies?
Please stop accusing me of saying things that I don’t believe and never said. Go back and look at what I said about CalPERS above. You will find no support for you accusation. None.
Moderator/Don: I am really tired of being attacked by this person, who seems to have some kind of bone to pick with me.
Roberta… had you recognized the commonality, instead of focussing on “higher education”, I would have not responded… you are not under attack by me… your wording is… I am more than content to let Don and/or David, or the larger group of posters judge…
You started out looking for a critical review of PERS (in the context of City issues)… never including other public retirement systems, in your words… when I said all should be looked at, your response appeared to be focused on UC/higher ed. That they were already “singled out” (not your words, but implication seemed clear).
It is clear that you have no animus towards me… except that I’m semi-anonymous ***, ****, etc. [self-moderated]
I pointed out that higher education is no different than other areas of public service, but you only had defended one. [admittedly, in a somewhat salty way].
I hope Don and David, and/or the general audience censure/ban me if they agree with your view that I am trolling, or that it was a personal attack… you have repeatedly accused me of BOTH.
Roberta, your “As someone who has some stake in CalPERS …” statement is very, very logical. Unfortunately, in situations like the current CalPERS one, logical arguments and logical thinking take a back seat to political calculations, and especially to personal political calculations.
It is crystal clear based on the article linked HERE that CalPERS can’t be relied on to police itself. When they thumb their nose at Governor Brown, their biases are there for everyone to see.
“The CalPERS Board reversed course and adopted an irresponsible plan that will only keep the system dependent on unrealistic investment returns,” Governor Brown said in his November 2015 statement. “This approach [by CalPERS management] will expose the fund to an unacceptable level of risk in the coming years.”
The article goes on to say that “lowering the expected rate of return on a faster timeline would place more burden on the state budget in the near term. That’s because budgeting for lower investment returns increases the amount taxpayers have to contribute to cover the fund’s obligations. But it also lowers the potential consequences of a risky investment going awry, an event that would leave taxpayers on the hook to pay even more money to CalPERS.” That is political calculation in all its glory.
Roberta said . . . “Unfortunately, however, our retirement plan was one of the things that we could use to attract new faculty, given that we are underpaid relative to other equivalent universities. These changes will make it harder to attract and retain faculty. That is also reality.”
Roberta, the above statement confuses me. Can you help me out of my confusion. What I hear you saying is that the UC pension structure should be exempted from the same rules that the rest of California’s pension system is subject to … because UC uses generous pensions as a faculty recruiting and retention tool. Am I reading your words correctly?
Gee, Howard, why would I have “singled out” CalPERS? Hmm… let me wrack my brain…. so hard to figure out… Oh, here it is – THE TOPIC OF THE ARTICLE IS CITY FINANCES. And other retirement plans have what to do with city finances? Nothing. The City is not paying for UCRP. They are paying for retirement plans for its employees.
So, in other words, you went out of your way to find something that you could pick on me for and put words in my mouth, something that is completely off topic.
In fact, my whole point was to have those who are involved in CalPERS be part of the decision making w/r to CalPERS. How you could spin that in being anti-public-employees is beyond me, unless, again, you are going out of your way to pick a fight with me.
Don’t you have better things to do with your time? I’ll say it again: If you have something productive to say, say it. But otherwise, leave me alone. I don’t have the time or the energy to squabble with you because you’ve got a stick in your craw when it comes to me, for reasons unknown to me.
The UC retirement plan and the state retirement plan are completely separate entities in every respect, and so it will not be surprising if they end up with different rules. All I have advocated for w/r to CalPERS is that localities (including employees who are in CalPERS) should brainstorm solutions. I haven’t said what those solutions would or should be. I would likewise say that people under UCRP should be involved in discussions about what to do with UCRP. There is no inconsistency.
I am talking about a grassroots effort to try to fix CalPERS, one that has enough people behind it so as to force change from CalPERS and the state.
I’d like to thank you for making a suggestion which deals directly with the problem. It’s unfortunate that some seem to be more interested in arguing with you, instead.
If I recall correctly, you also made an argument that the air quality at Nishi should be studied further (without a pre-conceived “conclusion”), but were met with unending “nit-picking” resistance to that idea, as well. (I will refrain from speculating on others’ possible motivations for doing so.)
Regarding CALPERS, I suspect that a system-wide “solution” will eventually emerge, throughout California. (Even if your idea is not implemented.) Perhaps this will occur the next time that the stock market takes a substantial/sustained dive, since CALPERS is dependent upon it. Actually, it’s “overdue” for such a correction, based on historical cycles. (And, the contribution expected from cities/counties is already overly-optimistic – as others have noted.)
At 1:52 pm Roberta said . . . “Also if some of the people working on a solution have a vested interest, the solution is less likely to be draconian and more likely to be palatable to a majority of Californians. In other words, having CalPERS people work on a solution might preclude some solutions, but the precluded solutions would be ones that would be likely to raise a big stink and be rejected anyway.”
At 6:21 pm Roberta said . . . “I am talking about a grassroots effort to try to fix CalPERS, one that has enough people behind it so as to force change from CalPERS and the state.”
Now you have me even more confused Roberta. This afternoon you proposed a solution coming from within CalPERS, and this evening a solution coming from grassroots external to CalPERS. Can you help me with my confusion?
Matt said, “Can you help me with my confusion?”
Yes, I can. You have to read the whole conversation, not just selected bits.
First I said that I would like for “the city of Davis to join with other cities, perhaps starting with Woodland and Dixon, to brainstorm about statewide solutions to the CalPERS problem, and then join with other cities to advocate for those solutions.”
You replied, “The biggest challenge to it is that all the people who would be part of the effort currently have pension benefits with CalPERS.”
Then I replied, “As someone who has some stake in CalPERS (from my time in the CSU system), I disagree. It’s to our benefit to have this system be workable for the state and continue in a healthy form. Also if some of the people working on a solution have a vested interest, the solution is less likely to be draconian and more likely to be palatable to a majority of Californians. In other words, having CalPERS people work on a solution might preclude some solutions, but the precluded solutions would be ones that would be likely to raise a big stink and be rejected anyway.”
From that context, it’s clear that “CalPERS people” refers to people who have pension benefits in CalPERS, not people who work for CalPERS.
I never proposed a solution coming from within CalPERS.
Roberta, one other comment of yours in this conversation is confusing. Specifically, “As someone who has some stake in CalPERS (from my time in the CSU system)”
Are you saying that UC and CSU are not in the same retirement system?
That is correct. They are completely different retirement systems. CSU is in CalPERS, but UC has its own retirement system, UCRP. Lots of info online if you want to search and check. There is “reciprocity” between the two systems, but for most people that mainly means that your final salary in system A is relevant for determining your benefit in system B. (You also vest earlier than you otherwise would).
It’s also worth noting that UC employees are not technically state employees. They work for the Regents of the University of California.
Thanks for that clarification Roberta. That was/is not intuitively obvious to the uninformed, and I was one of those uninformed until this moment. For anyone not aware of that reality, your statement ” “As someone who has some stake in CalPERS (from my time in the CSU system)” did not compute.
Thanks again for the clarification.
Sure.
For all… since CSU has been brought up, thought this might be of use for background… perfectly on topic, City employees have similar ‘grandparenting’ things, and reciprocity with other public systems… new hires, unless grandparented, are subject to the 2% @ 62… note that if you retire @ 67, it’s 2,5%.
http://www.calstate.edu/HRS/benefits/retirement/index.shtml
For what it’s worth…
Also, (but not as easy to drill down to numbers):
http://ucnet.universityofcalifornia.edu/compensation-and-benefits/retirement-benefits/ucrp/
Again, for what it’s worth…
All taxpayers contribute to all public pensions… UCRP is no exception… but they can raise tuitions without any sort of taxpayer approval… UCRP is indeed, taxpayer funded, one way or another. Some folk wish the State covered more of UC costs, so either tuitions could be lowered, and/or UC employee compensation increased…
Local agencies do not have the option of unilaterally increasing revenues… UC does.
But as it has been pointed out, accurately, UCRP has “nothing” to do with the City’s or State’s CALPERS. I see the light… I was clearly off-base to bring up anything other than the City CALPERS issue.
Oh, and then there is CALSTRS, but that would be off-topic, right? Doesn’t affect taxpayers…
Indeed, you were.
Or, if you have some proposal by which the City of Davis can make changes to UCRP that will improve the City’s finances – the topic of this article – I’d be very interested in hearing them. The topic of this article, you will note, is not pension plans. Pension plans of City employees are discussed only because they are part of why the City is in financial straits.
Did a “dumb-thumb”… my post following Roberta’s comment was intended to be under Matt’s… yet, applies to both…
Was not attempting to single Roberta out, yet it may come across that way… my bad…
Ron, thanks for your reply. Indeed, I have urged many times that we do an air quality study at Nishi, a suggestion that was not taken up. In both cases I am advocating for our decisions to be guided by good process, whether that is good scientific process or good social scientific process.
Meant as an honest question… what does the term mean?
Not familiar with it…
All I meant was a process that includes stakeholders, people with relevant expertise, research into the issue, open and honest discussions about pros and cons, open-mindedness about possible solutions, and a determination to find and advocate for the best possible solution. If you think I have a solution secretly in mind, again, let me assure you that I don’t. I just don’t think it makes sense for every City in CA to try to solve the exact same problem without putting heads together to try to find a more general solution. And that is true even if David is right (as he no doubt is) that pensions are only one part of our financial problems.
Fair answer.
I’M AWAKE !!!
Now, if we can get others to achieve the same status…
But are you woke?