Dissecting McKinley’s Phony Pension Reform

The other day we challenged retired police chief and $215,000 public pensioner Pat McKinley to put some real meat behind his dubious claim that he will “work to reform public employee pensions.”

Over the weekend we discovered a letter posted to McKinley’s website purporting to declare his position on pension reform. Exciting… until we read it. The letter actually commits to nothing and woefully understates the changes necessary to even begin correcting this problem.

Just say anything

Let’s run through Pat’s suggestions one by one. It’s important to note that McKinley’s letter says pension reform must contain ONLY ONE of the following:

Increase the amount contributed to the plan by Employee Contributions – Necessary, but wholly insufficient. While giving taxpayers some breathing room, demanding employees pay a little bit more does nothing to address the core issue, which is the unsustainable nature of pension guarantees when combined with the power of public employee union lobby. By itself, this change only slightly delays the pain.

Increase the amount contributed to the plan by Employer Contributions – Unbelievable. Increasing employer contributions is another way of saying we should raising taxes to pay for pensions. So now it would be safe to say that Pat McKinley wants to raise your taxes, but it’s really hard to believe he would write anything this dumb. For now, we’ll just assume that he has no idea what  he’s talking about.

Slow the accrual of pension benefits by returning the formula to its previous level – Legally a change like this change can only be made for new employees, which would do nothing to address the massive unfunded liability that we have already accrued. Furthermore, it leaves the door wide open for future abuse when the unions become more powerful.

Slow the accrual of pension benefits by increasing the normal retirement age to reflect the longer life expectancies of our City employees – Same problem as above. The commitments we’ve made to current employees cannot be changed without a bankruptcy. The only lever we really have left salary and to a lesser extent, contributions. Cut salaries, raise employee contributions… or go broke.

Slow the payout of retirement benefits by lowering the Cost of Living Adjustment in retirement – The cost of living adjustment is about 2% a year. Reducing that, if it’s even legal in California, is hardly enough to sustain hundreds of public safety employee’s earning 90% of their final year’s pay for the next 30 years. And once again, there’s nothing to prevent another band of RINO’s from reinstating this benefit the next time CalPERS overstates its assets.

So what have we learned? McKinley has thrown out a bunch of half baked ideas to fool you into thinking that he wants pension reform, but it really boils down to almost nothing useful. And of course, even after writing this letter, McKinley has not committed to any pension reform.

Woefully inadequate

We’ll say it again: Taxpayer-funded defined benefit plans must come to an end. The private sector learned long ago that they are completely unsustainable and also unnecessary. All new employees should be given defined contribution plans, while current employees should be made to pay as much as possible towards their own retirement, in order to mitigate the damage caused by their own unions and CalPERS through deception and poor planning.

A Colorfully Gesticulating Norby Loses The Skirmish, But Wins The Battle

Who will win the war? Follow the money.

The GOP Initiatives Endorsement Committee met this past Saturday to debate whether it should recommend to the State GOP to endorse Proposition 22.

Watch and see what happened during the questions and answer period. The proponents for Yes on 22 focused their argument on misdirected “local control,” and the fear that if it doesn’t pass Arnold Schwarzenegger will raid the cities’ Redevelopment funds and give them away to the schools. Hooray! The only problem is that by the time this is voted on Arnold will about as lame a duck as Daffy, and probably already reading the script for Terminator 5.

Did the most vocal Yes on 22 proponent, Jon Fleischman (hot dog alert @ 3:18), really think the voting members  in the room would be dumb enough to buy that “Arnold will cook up a bad budget” line? Well, they did – the vote was 9 Ayes and 8 Noes.  However, good news came on Sunday when the recommendation of the Initiatives Committee was tossed out by the GOP party who gave a thumbs down to the Prop 22 proponents.

Check out Chuck Devore, one of the few non-repuglicans in office. He gets it.

And yes, I really do have to wonder if Fleischman was on the Yes on 22 payroll. The Howard Jarvis group was no doubt bought off by the purchase of a slate mailer.

California GOP Initiatives Endorsement Committee Hashes Out Prop 22

Proposition 22 here, is an initiative supported by the California League of Cities and Redevelopment agencies and their lobbyists.

Voting yes on 22 would prohibit the State from restricting the use of tax revenues dedicated by law to fund local government services, community redevelopment projects, or transportation projects and services. It would prohibit the State from delaying the distribution of tax revenues for these purposes even when the Governor deems it necessary due to a severe state fiscal hardship.

The question boils down to whether the State should have the authority to redistribute redevelopment property tax increment funds and use it for schools, and fire departments.

The clip below was taken at the GOP  state convention held this past weekend in San Diego and features the Yes on 22 proponents debating State Assemblyman Chris Norby at the Endorsement Committee meeting. Each party was given 3 minutes to make their pitch, the Yes on 22 proponents spoke for 3-1/2 minutes, however when Assemblyman Norby was only 2-1/2 minutes into his speech (6:58) one of the 22 proponents rudely interrupted Norby and yelled “TIME” even though Norby still had 30 seconds left of his 3 minutes.

My next post will feature video footage of questions and answers by both Norby (No on 22) and the Yes on 22 proponents. There’s also a little treat at the very end of the clip, enjoy!

16 Minutes of Pure Agony

Enjoy these two clips that feature an exchange between County Supervisors Shawn Nelson and Janet Nguyen. The issue is pulling the plug on the moribund Civic Center Joint Powers Authority, an agency that was created when Lyndon Johnson was president, and that has served no legal or practical function for almost ten years.

You would think that supposed “conservatives” would pile on to the opportunity of killing a government entity, especially one that doesn’t do anything. Well, you would have to think again. Just listen to the drivel that escapes the Board Chair’s lips and dribbles down her chin. Ay, ay, ay!

A Masterpiece of Brevity and Focus

The Grand Jury has reported on the OCTA’s budget mess and their deficiency in Bus service.  Here is how the report begins:

The mission statement of the Orange County Transportation Authority (OCTA) is a masterpiece of brevity and focus:

“Our mission is to enhance the quality of life in Orange County by delivering safer, faster, and more efficient transportation solutions.”

The report identifies how the OCTA had the right idea when it cut bus services and raised fares by calling the action prudent.  Then later the report notes that the rise in fares had negative effect on the ridership.  Ergo, we must lower bus fares but only after full state funding is restored.

The report also calls into question competing priorities with the federal handout of $2.25 billion for high-speed rail and the $143 million set aside for the Anaheim Regional Transportation Intermodal Center, which the City of Anaheim is not contributing to.  The Grand Jury points out that OCTA needs to review its priorities with these funds.  The Grand Jury says that the “governmental relations committee of the OCTA Board should urge Orange County ’s congressional delegation to lobby for legisla­tive modification of the $2.25 billion.”

The final recommendation by the Grand Jury is for OC’s political and transportation leaders to hold a series of public meetings, the goal of which would be aimed at creating a countywide transit agency that will have sufficient au­thority and funding to overcome parochial­ism in developing a modern transit system.

I love this gem from the report:

One member of the transit agency’s board char­acterized the economic impact this way: “The busi­nesses and industries in Orange County that depend on low-income workers would grind to a halt.”

It would appear that we taxpayers subsidize bus service (to the tune of more than 80% of the total cost) so that low-income earners can keep their low-income jobs which helps keep low-income employers staffed with low-cost employees…  Ergo, you and I subsidize burger stands, Walmarts, and rich people with nannies and maids.

Thanks OCTA!

C-Span Features Fullerton’s Friend & Fighter Jack Dean in Washington

Click on Jack and watch him go!

Dear Friends: The issue of Pension Abuse continues to dominate the National, State and local scene. If you haven’t already heard Jack Dean with Pension Tsunami speak on this important topic, hopefully today is a great relaxing day to do just that.  Happy August 1st, 2010!

“Would you support our efforts to make our neighborhood historic?”

I received this post from a Friend who wishes to remain anonymous for reasons that you may understand after you read this post.

Think historic neighborhoods. Immediately, one’s mind goes to such places such as Bungalow Heaven in Pasadena, Harper’s Ferry, West Virginia and others where houses, landscape, and layout reflect a distinct architectural coherence.

What we don’t think of is the hodgepodge of homes built over a span of more than fifty years within the boundaries of Skyline, Frances, Luanne, Canon and Lemon here in Fullerton. True, the neighborhood has a sort of charm. But this four block area (oddly denuded of trees) doesn’t fit the definition as historic.

Yet, for over twenty years, this neighborhood has been besieged by a small but persistent group to designate itself as such. The original movement came about when a neighbor (who has since moved away) decided the mix of 60’s ranch homes, 30’s Spanish Mediterranean  and 80’s boxes needed to be protected.

Why? Because the empty lot behind her house, which she had enjoyed as her own personal open space, was going to have a house built upon it.  This led to a movement asking for historical designation, with one very vociferous neighbor putting out a letter decrying such crimes as pink flamingos in yards. It ended when a flock of roving pink flamingos went from yard to yard, to rebuke this snobbishness. It was clear then, as it is now, that the historic designation is more to control everything from the color of homes, the installation of skylights, solar panels, to pink flamingos in yards.

In more recent years, the issue was raised again when a member of the Fullerton Heritage group moved into the neighborhood.  This woman could often be seen taking photographs of her neighbor’s homes. She personally crossed the boundaries of neighborliness by posting a photo of one on their website as an example of “muddled and conflicted” architecture. Battle axes were raised when during a neighborhood meeting, an argument ensued. This busybody sat in the back, mute –rendering herself all but invisible. At no point did she offer any explanation why this issue meant so much to her that she was willing to pit neighbor against neighbor.

The reasons for not wanting this ridiculous designation are simple.

1.     There’s no consistent architectural coherence in the boundaries of Lemon, Skyline, Frances, Luanne and Canon. While there are individual examples of historically significant architectural styles, as a neighborhood – it lacks consistency and coherence.

2. It would give Fullerton Heritage – and the City Planning Department far too much power over our neighborhood. Note, they already have ultimate veto power over designs submitted to the city for everything from new development to remodeling in other neighborhoods designated as a historical zone. In one neighborhood, they vetoed the homeowner’s request to install a skylight. Such oversight is petty, and subject to the changing whims of the board.

3. This will lead to more “fake old” McSpanish architecture. Another uninformed member of the Fullerton Heritage group noted at a meeting at Hillcrest Park that she thought the predominant style in the neighborhood should be “Spanish Mediterranean,” whatever that means.

4.     The $1000 fee for the designation doesn’t even begin to cover the costs of actual staff time. In addition, this doesn’t cover the costs of ordered revisions by the owner’s architects or engineers. Fees like this are never gotten rid of, rather, the fee could be raised and the neighborhood would have no control over the amount they have to pay.

5.     The city of Fullerton has a permit process already in place. This is an added layer of bureaucracy with not only more additional staff time needed, but oversight from an outside organization (Fullerton Heritage).

6.     A small cadre of neighbors has already been vociferous to the point of rudeness about things they don’t like: the color of a neighbor’s home, plantings, flamingos, and more. Worse, their gossip has hit people in ways that have become personal. While we realize they are voicing their opinion, we’d hate to give them permission to authorize or disapprove on any official level.

At some point one must work with and trust the neighbors.  Most of the neighbors who support this notion have lived in the area for 40 years without the intervention of the city. Why they think they should leave future generations with a law to be enforced long after they have enjoyed their own latitude –is for reasons of ego.  While the notion of a historic neighborhood seems appealing, in reality it is cumbersome, vague and will leave future homeowner’s with no choice but to deal with more government and bureaucracy. It was clear twenty years ago as it is now:  these people need to get a life.

All we can do is work with one another, and be neighborly but not meddlesome.

Martha Montelongo on the Air Live with Jack Dean

Join Martha Montelonga live and her guest Fullerton Tax Fighter Jack Dean of Pension Tsunami, tomorrow (Saturday) morning at 10:00A.M. to noon on Outlook with Martha, possibly the name for her new show, on CRN Digital Talk Radio on the story about the $800,000.00 annual salary for the City Manager of the City of Bell, CA.   Could this be the story that breaks the public employee compensation and pension abuse of the public trust and budgets?   Will it be the match that lights a fire under the taxpayers, to cause a productive and revolutionary revolt?

If Bell City Manager retires now, he stands to reap over $30 million dollars in retirement funds.  He’s not the only one with outrageous pensions.   He’s just the worst case by far, but we’ll look at the more common, and yet still, very unjust overcompensation awarded to various officials and ex-officials, all on the dime of the taxpayer, who is on the hook to pay, no matter what.