Letters to the Editor: Council should okay new safety contracts

Letters to the Editor: Council should okay new safety contracts

Letters to the Editor

“The comedy of #Alameda elected officials downplaying great economic news because it undercuts austerity plans is very evident (at the April 16 special City Council meeting on the budget). - Steve Tavares, Twitter

During the above-referenced meeting, it appeared that some city leaders ignored or glossed over the city’s improved financial position in an attempt to justify opposing a proposed contract extension to public safety workers that would help the city reduce its retiree health benefit (OPEB) costs. The council is to vote on the contract on April 29.

But elected leaders have a responsibility to follow the law and be accountable to the truth and facts of municipal government, particularly when it comes to its finances.

The truth is that Alameda’s financial news has, for the first time in more than a decade, been good. That was achieved by the hard work of the prior City Council and a partnership with our public safety workers. And that hard work has put the current council in the enviable position of being able to reduce its long-term liability for retiree health:

  • Our prior council left the city with an $11.5 million budget surplus and an increased general fund reserve of approximately 37 percent - far above the city’s minimum 20 percent requirement.
  • The new fiscal year budget projects an additional surplus of over $8 million in part because of the 2008 property transfer tax revenue (Measure P).
  • The independent financial rating agency Standard and Poor’s upgraded the city’s general obligation bond rating from AA to AA+, citing Alameda’s strong financial management.
  • During my eight-year tenure on the council, we had no budget surpluses of note. Rather, we regularly had to cut services to avoid steep deficits.

The prior council lived through one of the worst economic downturns of our generation, and we recognized that negotiating with our employee unions would put the city on sound financial footing. The policies put in place during that time have worked. City Treasurer Kevin Kennedy acknowledged this last September, saying that “given the recent history of the municipal bond market and the difficulties of Detroit, Vallejo and Stockton, it’s noteworthy that the rating agencies rewarded Alameda for its fiscally sound policies. I attribute this to the city’s strong reserves.”

The other truth that cannot be ignored is that the city has no power to unilaterally change pension or health benefits. Alameda is part of the pool of the California Public Employees Retirement System in providing pensions to its employees. We are fortunate that our public safety employees agreed to pay for a larger share of their pensions (15 percent) than the law requires (12 percent).

Similarly, Alameda cannot unilaterally change any benefits or force employees to pay for any part of OPEB. That requires negotiation. The city asked police and fire staff to share in the payment of OPEB, and they agreed to do so, in exchange for an extension of their current 2010 contract to 2021 (the current contracts expire in 2017).

We worked long and hard to put ourselves on a solid financial ground. The truth is, we have the funds to solve this problem, and the truth is we cannot do so without the agreement of our public safety partners.

Let’s hope our new city leaders recognize this truth and take advantage of this rare opportunity on April 29.

Lena Tam

Comments

Submitted by Robert Sullwold (not verified) on Wed, Apr 22, 2015

Former Councilwoman Lena Tam writes, “The other truth that cannot be ignored is that the city has no power to unilaterally change pension or health benefits.”
This is a canard, and no amount of repetition by friends of the firefighters’ union like Ms. Tam will make it true. To cite two recent examples, the California courts of appeal approved unilateral reductions made -- in one case by the City of South Pasadena and in other by the County of Sacramento -- to amounts paid for retiree health insurance. (For a fuller discussion, see the Alameda Merry-Go-Round: https://alamedamgr.wordpress.com/2015/04/05/fixing-the-opeb-problem-lega...).

Submitted by Gaylon Parsons (not verified) on Wed, Apr 22, 2015

I'm not a lawyer, so I had to read Mr.Sullwold's post a couple of times. I don't think the examples are persuasive. In the South Pasadena situation, the MOUs lapsed. The council, not in contract and presumably not in active negotiation, acted unilaterally. And then had to pay for a lawsuit. Our city manager, in contrast, stayed in negotiation, won additional % paid by union members and avoided a costly lawsuit. This seems like a good deal to me, necessary but not sufficient to solve the OPEB problem. The Sacramento one is harder for me to judge because I don't know what exactly makes the test for an implied contract "tough" and the post at Mr. Sullwold's blog leaves those details out. There's another case, from San Diego, he brings up that seems to be more about when the MOUs take effect than about retiree health benefits per se....but I'm not a lawyer and I have a full-time job to get back to. I do hope the council does the right thing here and confirms the contracts on April 29.

Submitted by Kate Quick (not verified) on Wed, Apr 22, 2015

During the time of Interim City Manager Gallant, the City and the Public Safety Unions were "at war". There was a lot of demonizing on both sides and despite open negotiations for a long time, nothing got done and the City got no concessions. She was perceived as being "tough". Under Mr. Russo and a new Council, there were concessions (albeit not sufficient to "cure" the unfunded liability problem) for the first time. Now, a new plan has been introduced with support from both sides which will move the City even further toward reduction of the unfunded liabilities. Some think it is wise to wait until the City has a "tough" negotiator again to try for even larger, faster acting concessions. Having seen what a "tough" guy can do (made things way worse and couldn't achieve a contract)I think we might consider going with what a tough and smart guy has come up with. Adversarial bargaining is rarely effective; interest based bargaining works better. I was in HR work for 25 years and I know this to be true.

Submitted by LB (not verified) on Thu, Apr 23, 2015

Is this the Lena Tam who has received tens of thousands of dollars in campaign contributions from the Alameda firefighters union? The Lena Tam who leaked internal documents to the Alameda firefighters union at a time when it was in contract negotiations with the city? (You scratch my back, I'll scratch yours, right?) So you wrote this letter with the City's best interests in mind and not your own political career aspirations, correct?

"We worked long and hard to put ourselves on a solid financial ground. The truth is, we have the funds to solve this problem..." Great, so then there is no problem?

This truth is we do *not* have the funds to solve this problem. The truth is that former City Councils (all put into office by union campaign contributions) created uncapped and unfunded future liabilities.

I, for one, hope the current City Council has the audacity to tackle the OPEB problem sown by previous Councils instead of continuing to kick the can down the road.