I read with interest the letter to the editor by John Sensenbaugh, and applaud him for his straight forth appraisal of the candidates for City Council (“Identifying my front-runners for Napa City Council,” April 21).
However, there is one main issue that seems to be overlooked in the discussion, which always focuses on affordable housing, road repair, homeless, etc. but never does the topic arise regarding the sustainability of the public employees’ retirement and health care costs.
I recently received an email from Ms. Mary Luros, one of the candidates, which had the tag line "breaking news" which announced that she had the endorsement from SEIU, Local 1021, and stated "we are thrilled to share with you that the NCEA/SEIU Local 1021 has given an early endorsement".
To this, I responded directly to her with this question "Ms. Luros, How will you solve the out of control pension and health care costs for those represented by this union? Perhaps a letter to the editor to explain how and when this effort will be begin, Respectfully"
To this, I received the response:
"Good question, and thank you for reaching out. You didn’t specify whether you’re talking about unfunded liabilities or future pension costs, so I’ll address both.
"While I was on the city council we proactively established a Section 115 trust, which is a useful tool for prefunding pension benefits. Using this trust, we can offset our unfunded liabilities on our books without making a payment straight to CalPERS (and our investment strategies are far less conservative than CalPERS, resulting in higher returns).
"The bigger question is how to come up with the $20mm+ that we will eventually need. The answer is one day at a time, and only with a PLAN. If our city can come up with over $90mm for a civic center, we should be able to bring down our unfunded liabilities and prepare appropriately for future pension costs. Without cutting staff, and without cutting services for our citizens. But let’s stop burying our head in the sand and actually start putting some money away."
My response, slightly edited to reduce words, "Ms. Luros, Thank you for your prompt response. If I read your comments correctly, your solution appears to be for the tax payers to continue to pay the cost of pensions and health care, regarding of whether it is future costs, or current unfunded liability. Your response says nothing about a possible solution by reducing the expense side. Eventually this type of planning will run out of other people’s money."
A few years back, a Santa Rosa man, Jim Letty was running for a state office, and I invited a group of local business people to meet him and ask some questions. I asked one, "What will you do to help control the cost of public union pensions and benefits?" His response astounded those in attendance, with the response, "Jim, this is not an issue of spending, it is an issue that these programs are merely underfunded." In other words, we, the taxpayer were going to pay the bill, period. And that was some 20 years ago.
I went on to explain to her some various ways to fund pension plans, such as a defined contribution approach, versus the current defined benefit method. And one issue I failed to mention to her was the fact that the voters, headed by then-Councilman Harry Martin, voted for a "binding arbitration" that in effect binds the hands of our local City Council. This must be re-visited.
And in closing, I believe that not only is our city and county in trouble, most public entities using the defined benefit plan, all will face the same issue, and staying this course, will eliminate a majority of the services we enjoy, and will place a tremendous tax burden on our citizens. And please do not call me anti-union, as I was a union contractor throughout my business career, and served on local and national labor committees, only to come to the conclusion that in most cases the unions are merely "for profit businesses," and their survival is more important than the costs passed on to customers and the public.
Perhaps it is time to begin to look at private contractors to provide the services now being performed by members of public unions. When a contractor is hired, payment is made, with no further costs involved. With a public union, the employee is paid for the work, and then the tax payer is responsible for the well-being of that employee for the rest of his/her life.