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City pensions worry Central Coast taxpayers

September 27, 2012

Sustainability of city finances has become a growing concern of late in California.

Director or Research of the Davenport Institute at Pepperdine University Dr. Steven Frates spoke to San Luis Obispo property and business owners Wednesday on the state of city finances in San Luis Obispo, as well as throughout the state.

Frates, also president of The Center For Government Analysis, authored a report five years ago stating that the city of San Luis Obispo would be heading for fiscal hardships in five years. At the San Luis Obispo Property and Business Owners’ Association luncheon Wednesday, Frates said the city is now in “very bad shape” because its pension obligations are only about 70 percent funded.

In order to overcome its unfunded liabilities, Frates said the city must either cut salaries and benefits, allocate more money to employees while cutting other expenditures, or raise taxes and fees. Though the city council will face political pressure for choosing any of those options, the analyst said the worst option would be to finance the retirement benefits through pension obligation bonds.

“Every time you go into debt to finance pensions, you are taking operating revenue away from municipal services,” Frates said. “What you are doing is cheating the future generations.”

Frates also discussed the fiscal fate of other California cities. He said the city of Los Angeles is on a path toward bankruptcy due in large part to a collapsing teacher pension system. A high percentage of Los Angeles Unified School District teachers are expected to retire soon, and many will be healthy females with multiple decades remaining in their lives. Frates said it would take drastic cuts to public services to pay for their pensions.

California as a whole now has nearly half a trillion dollars in unfunded pension liability, which makes up almost one tenth of the nationwide pension debt of between five and six trillion dollars.

“Retired firefighters in California make more than the Joint Chiefs of Staff,” Frates said.

Yet one state is in even worse fiscal shape than California: Illinois. Frates said the pension system in Illinois is now only 40 percent funded.


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I attended this meeting and heard Dr. Frates on the Dave Congalton show later in the afternoon. He is right on the money just like he was several years ago when he predicted this mess. We owe a debt of gratitude to the SLO Property Owners Assn. for bringing him here at that time and back again this week.


When Katie Lichtig arrived in town, she had a window of opportunity as the new city manager to turn things around. Instead she made things worse. She needs to go. And everyone who voted for hiring Katie should also be kicked out of office – like our current Mayor Jan Marx, who seems quite content to let things drift along like this because hey, we are the happiest city ever!!! We need more than caretakers in office. Throw the do-nothings out!


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Sustainability of city finances has become a growing concern of late in California.

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Nah, really? You’r not just joking?


Where you people been for the last 30 years. This didn’t happen overnight. CA has been spending money it never had for more than 20 years now. Do you people even remember why the governator wa elected and Gov. Davis booted?


CA owes 40b and currently takes in 75b and spends 100b a year. Get ready because we’re going down. We can’t print money like the Federal Government.


And it’s a democrat dominated state. The Democrat dominated legislature has been giving it away for decades. All in the name of votes. And now we all are about to pay.


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I had to read this story twice to be sure it was not about Paso Robles. Can any voter honestly believe that

funding pensions for city employees is exactly where most of the ‘much needed’ 1/2% slaes tax increase will be spent – if it passes. This tax must be voted down – by an overwhelmiimg majority. Anything less than 80% against will be a victory for this very inempt city council. They are just ‘brilliant’ enough to put it on the ballot again and again.


It is a crime and a crying shame that the residents of this state, this county, and this city (Paso Robles) has allowed this to happen. To be taken in by slick people in white suits (Fred ‘get another grant’ Strong) and

others. And, yes, we did allow this to happen. By not looking at facts, by being swindled by our public officails, and on and on.


Do we really want a change or do we just talk about it. If we really want it – then vote and get your friends and their friends to vote. Strong and Gilman need to be kicked out. Hamon and Steinbeck need to have a strong message sent to them for 2014.


The time to stop talking and take action is getting closer. Do the residents have the guts to make change happen?


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How about this:


I worked 26 yrs for a private sector company that had a defined benefits pension.


My wife worked the public sector for 25 yrs and has a pension. Although I made more money over basically the same time, her pension is twice mine. No complaint here. Just want to thank all you you taxpayers for my good fortune.


Oh, her pension has COLA, mine doesn’t. Public pensions are a serious problem, a problem taxpayers cannot continue to support without big tax increases.


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Still waiting for somebody to tell me what good comes from government.


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Morals have little to do with pensions or bargaining, it is purely political…

Unfunded pension packages were knowingly allowed through several legislative loop holes and pandering techniques by our legislature.

They did not work when approved and they certainly do not work today, today are bankrupting most states. And the individual firefighter or policeman has little to do with the arbitration, union stewards and union bosses do. They openly encouraged and have gone along with this political maneuvering and now we have to reorganize or go down in flames. It is simple math 101, if you do not have the funds to pay then it has to be cut… Why should we all pay for unfinded pensions, which the few will benefit at our cost in the form of high taxes or fees.


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At first I thought I had a hit on the Post Office bulletin board. When Isaw the attached photo of the culprits who are one of the main reasons for the financial conditions of most cities.


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I am willing to bet that the city council will opt for the pension obligation funds. The *(*(&((8%%$#%$ that run this town have a singular goal to maximize their welfare checks at the end of their gravy jobs so the obligation funds are the best for them. Since the good citizens of SLO continue to sit back and allow this it would appear that the obligation bonds are the best for the citizenry as well. The graft and incompetence of the SLO administration is the gift that keeps on giving


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What a disaster. There is no easy solution to this problem and it will be painful for the employees, citizens and the eleected officals who must be honest and show leadership in resolving this problem. California has more in common with Greece than our shorelines. This whole economy is going to fail before it will even fully recover. Bank of America, Deere Tractor, Verizon, Campbell Soup, Cisco, Lands End, HP, Motorola, JC Penny’s, GM in Canada are all laying off hundreds and thousands of employees but the spin is we are in recovery, unemployment is down – low because people are no longer getting benefits – we are headed in the right direction. We are sinking, sinking, sinking. Printing money instead of borrowing it, prices keep going up, regulations still be imposed, coal industry raising costs and putting additional thousands out of work, are killing the American economy. Remember Ronald Reagan statement “Are you better off now than you were four years ago?” We need really change, strong leadership, and people who want to work to change turn this economy around. We are in a true mess and nothing is getting better for the middle class, hard working, devoted Americans.


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True and while we continue to crash and burn, the SLO assistant city manager has announced that they will hire additional employees so that the current staff who are experiencing low moral won’t have to work as hard. Oh booo-hoo.


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I think you had right the first time… LOW MORALS!


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Give me a break! The SLO City employees have far more time than many other employees working in other cities. The citizens of SLO have to get control of these actions. Communities are filing for bankruptcy, people losing their jobs and homes, and many cannot afford health care. The assistant city manager’s position should be deleted and replaced with someone who actually works. The city manager and assistant city manager have far too much time on their hands if this is the type of plans being developed.


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Don’t you just love it?


Lichtig and Condon’s policies and implementation of those policies is what has created the problem of low morale amongst the staff.


To fix that problem it is obvious that Lichtig and Condon should be replaced by professionals who know how to lead which produce results, and don’t undermine the will to live of the staff they lead.


Instead, Condon announces they will hire more staff, which will have to suffer under the same Lichtig-Condon leadership that produced the current low morale in staff.


Condon’s pathetic solution will do nothing but expose new staff members to the same poor leadership which has caused the problems with SLOCity staff, creating a new bunch of suffering staff members.


Policies and how they are implemented impact the organization as a whole, but also impact each employee. So adding more employees is only going to expose new people to the problems Lichtig & Condon should be fixing.


I suppose Condon thinks this is all CCN’s fault too?


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