Bond holders vs. Calpers – who gets priority when CA cities go BK

[no_such_reality]

[quote=bearishgurl]
I see this as a time and money-wasting uphill battle for a city who should probably concentrate on getting (and keeping) their house in order regardless of how the court rules. If that means layoffs and RIFs, its citizens will have to get used to less services. If they can’t staff enough employees for their state and Federally mandated programs, then they will have to seek funds from the state/Federal govm’t to run these programs or send those patrons elsewhere to apply for benefits.[/quote]

Vallejo is how looks.

Bond holders eat it.

City services shredded, RIFs of 30%, 40% or 50% of staff, including police and fire. The Police department is reduced by 38% of peak staffing in 2004, the fire department reduced 30%.

Increased contributions to pensions for the remaining workers to actually pay as you go.

Concessions from unions on Pensions.

And a 1% sales tax.

That is the future. Get used to it.

[bearishgurl]

[quote=no_such_reality][quote=bearishgurl]
I see this as a time and money-wasting uphill battle for a city who should probably concentrate on getting (and keeping) their house in order regardless of how the court rules. If that means layoffs and RIFs, its citizens will have to get used to less services. If they can’t staff enough employees for their state and Federally mandated programs, then they will have to seek funds from the state/Federal govm’t to run these programs or send those patrons elsewhere to apply for benefits.[/quote]

Vallejo is how looks.

Bond holders eat it.

City services shredded, RIFs of 30%, 40% 50%, or 60% of staff, including police and fire. The Police department is at 38% of peak staffing in 2004, the fire department at 30%.

Increased contributions to pensions for the remaining workers to actually pay as you go.

Concessions from unions on Pensions.

And a 1% sales tax.

That is the future. Get used to it.[/quote]

The Vallejo City Council fvcked themselves (and their constituents) royally over the Mare Island redevelopment project(s) debacle after the Navy closed the base and gave the land back to them. Again, this was primarily caused by its Council pandering to Big Development and in the end, not getting their fair share of taxes or a fair cut of the their sales profits.

A few months ago, I was working on a “study” of the depth and breadth of these blunders and how it affected Vallejo’s finances adversely and I had to stop due to to other commitments. I’ll made an effort over the holidays to complete it and post a thread here.

There was absolutely no reason whatsoever that this VERY well-located waterfront small city with multiple industries should have EVER had to succumb to BK! None at all! This city is VERY conveniently located, VERY well established and had no open space available for tract OR multifamily development that wasn’t “gut & rebuild infill,”….that is, until the Mare Island base reverted back to them.

I’ll get on PACER as soon as I can and try corroborate your story, NSR.

[no_such_reality]

BG, most politicians in most cities are being just as stupid as the ones in Vallejo.

That’s the point those of us on the reign Government in side have been making. As you say, they shouldn’t. Well, they have. And most of the others have too.

That’s the point.

[bearishgurl]

[quote=no_such_reality]BG, most politicians in most cities are being just as stupid as the ones in Vallejo.

That’s the point those of us on the reign Government in side have been making. As you say, they shouldn’t. Well, they have. And most of the others have too.

That’s the point.[/quote]

I agree, NSR, because I’ve seen it first hand … countless times. HOWEVER, the main thrust of Pigg assertions on this board has been that long ago contracted for (and codified in state law) PUBLIC PENSIONS were the source of the BK’s.

Nothing could be further from the truth.

[no_such_reality]

The pensions, the work schedules, the lax management, the staffing levels, and the politico pandering all go hand in hand.

The pensions are just the most obvious piece that is out of whack. It’s the easiest piece to see how poorly the politicians have been at being stewards of our resources.

[CA renter]

[quote=no_such_reality]The pensions, the work schedules, the lax management, the staffing levels, and the politico pandering all go hand in hand.

The pensions are just the most obvious piece that is out of whack. It’s the easiest piece to see how poorly the politicians have been at being stewards of our resources.[/quote]

It’s the easiest to see because it’s the most transparent. If you’ve seen what (I’m assuming) BG and I have seen, you’d know that there is a ton of fraud and abuse, and the vast majority of it is related to **private** contractors (ever hear about the $40 screwdrivers, etc.?) and other “special interests” like developers who end up costing taxpayers millions or billions of dollars…but by the time the problem becomes obvious, they are long gone, leaving public sector employees as the convenient scapegoats for the eventual economic consequences.

Mind you, the reason you’re hearing so much about public pensions is NOT because they are what’s causing the financial problems (3-5% of the state’s budget, for instance), but because the private interests who are looking to take control of public assets and revenue streams are trying to get unions out of their way. They are trying to villainize public sector employees and unions because unions are the only thing standing between them and their goals.

http://alecexposed.org/wiki/Privatizing_Public_Education,_Higher_Ed_Policy,_and_Teachers

I can assure you, the “private market” Utopia does not exist. If there is any evidence to show that, over time, the privatization of goods and services traditionally provided by govt entities results in improved services for similar or lower costs, I’d like to see it. All that we’ll get from privatization is the loss of the few remaining decent jobs that are available to the general public. Taxpayers/consumers of public goods and services will not benefit from privatization. There is no **evidence** to show that they will, not even from right-wing sources.

http://government.cce.cornell.edu/doc/viewpage_r.asp?ID=Privatization

[davelj]

[quote=CA renter]
Big difference: the PBGC is a public *insurance* entity for *private* pension plans, and they have little control over these pension funds (especially before the Pension Protection Act of 2006), whereas the state and local pension funds are NOT insurance funds for pensions; they are the pension funds themselves, and have more control over the types of investments and contribution requirements for covered pensions.
[/quote]

Which is why I specifically stated “it’s not an apples-to-apples comparison.”

California’s state constitution is its own beast but – and I quote Gene Fama here – “Most state constitutions provide that the state first has to service its debt, then make its pension payments, then pay for services. What remains to be seen is whether this order will be enforced when – not if – a state declares bankruptcy.”

Interesting times…

[davelj]

A side thought experiment on the topic of public unions.

As has been discussed before, the vast majority of metro areas in the US are serviced by volunteer fire departments (these tend to be small markets, but they are numerous). However, virtually ALL of the major metro markets (not a lot of markets – by definition – but lots of population) are serviced by a full-time, paid fire department.

Clearly, there are lots and lots of folks who would be happy to volunteer to help out the fire department, even here in SD. They’d go through the training, etc etc… and work essentially for free.

If the unions were amenable, we could start integrating such folks into the current fire department and have them working for and alongside the full-time folks. Over time we could strike a balance between volunteer and full-time workers that better fits our financial wherewithal.

So, why doesn’t this happen? I know the answer but I’m wondering what others think is the barrier.

[SD Squatter]

CALPERS trying to rewrite city bankruptcy rules

Bloomberg:
“The California Public Employees’ Retirement System is trying to rewrite the rules for bankrupt cities, claiming that it should get paid before almost everyone else, including bondholders.”

http://www.bloomberg.com/news/2012-12-12/calpers-bankruptcy-strategy-pits-retirees-vs-all-others.html

[SK in CV]

[quote=SD Squatter]CALPERS trying to rewrite city bankruptcy rules

Bloomberg:
“The California Public Employees’ Retirement System is trying to rewrite the rules for bankrupt cities, claiming that it should get paid before almost everyone else, including bondholders.”

http://www.bloomberg.com/news/2012-12-12/calpers-bankruptcy-strategy-pits-retirees-vs-all-others.html%5B/quote%5D

That’s opinion that is not consistent with bankruptcy law. Chapter 9 is pretty unique, and there isn’t all that much in the way of precedent. But the rules regarding priorities of claims remains. And debts to employees are priority claims, even in chapter 9. Calpers is not trying to rewrite any existing law. The law simply does not exist.

[CA renter]

[quote=davelj]A side thought experiment on the topic of public unions.

As has been discussed before, the vast majority of metro areas in the US are serviced by volunteer fire departments (these tend to be small markets, but they are numerous). However, virtually ALL of the major metro markets (not a lot of markets – by definition – but lots of population) are serviced by a full-time, paid fire department.

Clearly, there are lots and lots of folks who would be happy to volunteer to help out the fire department, even here in SD. They’d go through the training, etc etc… and work essentially for free.

If the unions were amenable, we could start integrating such folks into the current fire department and have them working for and alongside the full-time folks. Over time we could strike a balance between volunteer and full-time workers that better fits our financial wherewithal.

So, why doesn’t this happen? I know the answer but I’m wondering what others think is the barrier.[/quote]

That’s already been discussed here:

http://piggington.com/comment/reply/13991/168241?quote=1#comment-form

[quote=CA renter]

In general, volunteer departments are in rural areas where paid fire departments are not needed, or where they can’t afford one. If you look at a map of the U.S., you’ll quickly see why we appear to have such a large volunteer force. Things are different from department to department, but in many (most?) cases, these departments would not have a staffed station. If a call comes in, the volunteers carry radios around with them and they meet where the call is located (usually one or two will go to the station first to get the engine, or it’s possible someone might bring the engine home). Can you imagine the reponse times in an urban/suburban setting?

In urban/suburban areas, if there is a volunteer component to a paid department, it would be used for training new recruits. Of course, the promise/hope of a job in the paid force is the incentive that makes these kids work for “free” (it still costs the department WRT administrative and training costs, equipment, insurance, etc.). If they don’t think the volunteer experience will land them a job, or significantly increase their chances, I guarantee you there would be precious few full-time volunteers, if any (and the ones who would volunteer F/T are the weird “groupie” types that are actually very dangerous — nobody wants to hire those).[/quote]

AND…

[quote=CA renter][quote=davelj]
That makes sense but if 73% of all fire fighters are indeed volunteers and we know that a huge proportion of the total population in the U.S. is in urban areas, then there must be a lot of volunteers in some major metropolitan areas as well. I agree that the rural model doesn’t translate perfectly to the urban model, but clearly a lot of folks are willing to do this work on a very part-time basis for free. In my view, we should figure out how to use these folks.[/quote]

I could be wrong, but I think you’ve just nailed one of the biggest reasons why 73% of firefighters are volunteers. If each part-time FF is considered a “volunteer,” then it makes sense that more firefighters are volunteers vs professionals. Many of them might work for a day or two a month (maybe more, maybe less), so you need far more of them to get the same coverage. The professional departments would have fewer firefighters because everyone is full-time. Just guessing this, but your post actually made me realize this is a big reason for the population difference between volunteer and professional departments.

Trying to clarify it a bit: it’s possible that 73% of the firefighters are covering only 10-20% (or less) of the calls. I don’t know this, though. Will try to find numbers…[/quote]

And this…

[quote=CA renter]
While looking around for more info on volunteer departments, I just happened to come across this. Of course, they are blaming the unions for the volunteers’ poor performance! (Isn’t it ALWAYS the union’s fault? /sarcasm)

Supporters and critics of the reserve program seem to agree on one thing: performance at some of the reserve stations is weak. Critics are pushing to an end to the program while backers hope to revamp the existing system.

Of the stations that could be cut during Thursday’s meeting, Midway City boasts the best volunteer performance in the first six months of 2010. The 13 volunteers there responded to 51 percent of 156 calls the station received. Station 24 in Mission Viejo — with 16 volunteers — responded to less than half of its 283 calls.

Other stations fared far worse: Station 23 volunteers in Villa Park managed to respond to one of the 59 calls they were dispatched to.

“There’s no question, the numbers stink,” said Brad Reese, a Villa Park councilmember and member of the OCFA board who supports the reserve program.

Other stations, however, such as Emerald Bay and Modjeska Canyon have responded to more than 90 percent of their calls.

http://www.ocregister.com/articles/program-267638-firefighters-reserve.html
—————

It needs to be said because there will be some people who still don’t get it, professional firefighters respond to 100% of their calls. Quite frankly, even I’m surprised at these stats. That’s scary, IMHO.[/quote]
———————-

And this is regarding the shortage of people willing to volunteer.

…

“Nationwide, volunteer fire departments are responding to more calls but with fewer volunteers.

Since 1984, the number of volunteer firefighters in the United States has declined by more than 8 percent, while the number of calls to fire departments has more than doubled since 1986, according to the National Volunteer Fire Council.

“It just seems to be an overall trend across the country, of departments struggling with getting new volunteers in,” said Kimberly Ettinger, director of communications for the council.

For many small and medium-size communities, volunteers serve as the first line of defense during an emergency. As volunteer fire departments dwindle in size, many have been asked to do more with less.

…As older firefighters retire, fire departments struggle to find younger volunteers to replace them.

“The challenge is quite simply recruitment of people who are willing to take the time to get the certification it takes to be a firefighter today,” said Michael Hunt, chief of the Clearwater Volunteer Fire Department in Beech Island, S.C., an Aiken County township of about 4,000 people.

About 19 miles from Beech Island in Belvedere, S.C., Assistant Chief Todd Durance of the Belvedere Fire Department also has a recruiting problem, and sees it as a twofold challenge: People are busy, and training is more demanding, said Durance, explaining that South Carolina requires volunteers to complete 300 hours to become become certified.”

http://abcnews.go.com/US/busy-fire-departments-cope-fewer-volunteers/story?id=10371047&singlePage=true#.UMlePKyaBXs

[CA renter]

I would also add that there are many people from different professions who volunteer their time. People like doctors, nurses, lawyers, accountants, etc. Should all hospitals, law firms, CPA firms, (and banks, for goodness sake!), etc. use as much volunteer labor as possible in order to reduce costs for consumers?

Not saying that’s a bad thing, necessarily. Maybe that’s one way we can tackle our spiraling healthcare costs…require more doctors and nurses to become volunteers.

[davelj]

[quote=CA renter]

“The challenge is quite simply recruitment of people who are willing to take the time to get the certification it takes to be a firefighter today,” said Michael Hunt, chief of the Clearwater Volunteer Fire Department in Beech Island, S.C., an Aiken County township of about 4,000 people.
[/quote]

All true – including the points from your post above – but… clearly there are still a reasonable number of folks who want to be part-time volunteer fire fighters. Yes, all of the limitations you note apply. But that doesn’t mean that we couldn’t integrate some small percentage – say to reach a goal of 15%-20% of the total over a decade or two – into our current workforce. The reason this doesn’t happen is simple: the unions won’t stand for it, as it diminishes their power.

And therein lies the problem. We have budget and pension issues that could be largely solved at the margin (where everything important happens) by increasing – not substituting with – a volunteer component. The unions, however, won’t have it – they’re all or nothing. And that does not seem to me to be a reasonable position.

I’m not anti-union, per se. But, wowsers, these unions take some outrageously unreasonable positions that are real head scratchers. And the total and complete opposition to integrating any volunteers into anything is one of them. Great for the union reps, not so great for everyone else.

[CA renter]

Again, I agree with you about some of the pension issues, and have been opposed to the pension boosts enacted in ~2000 since day one.

Still, there are LOTS of people who are overpaid, many of whom are far more overpaid than union employees, and we ALL have to pay for it, whether they are “private sector” employees or “public sector” employees.

The financial problems currently being experienced at the local, state, and federal levels was not caused by union members — not by a long shot. They should not the the only ones who shoulder the burden of the crisis caused by **many** self-interested parties. I

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