Editorial: New glimmer of pension sanity

Billions of dollars in unfunded civil service retirement benefits are hanging over California public budgets like time bombs waiting to blow apart the state’s economy. Happily, what came out of negotiations for the proposed Belmont-San Carlos Fire Department in San Mateo County is a hopeful portent for other Bay Area jurisdictions.

The all-mail balloting to approve the new two-city firefighter merger does not close until Nov. 13-14. But the reorganizing fire district’s board and Local 2400 of the firefighters union were able to unite on presenting voters a contract agreement that slightly reduces retirement benefits for new personnel hired as of January 2007.

The new-employee retirement payment formula will be “3 at 55” instead of the current “3 at 50.” For readers who don’t know, the controversial age 50 eligibility for 3 percent of final salary per year of service has been a central goal of California public safety employees as of at least the dot-com boom.

This means police or firefighters who served 30 years in a department offering such a package could retire at 50 years old with 90 percent of their best salary for the rest of their life. A five-year eligibility delay for starting this payout — which is more common for non-safety public employees — could save millions for hard-pressed local governments.

Many city and state agencies became sold on the idea that they would lose their best people to competitive departments unless they kept up with the new retirement standards. During a bountiful period of the business cycle that numerous analysts claimed would last permanently, it was too tempting for politicians to sign up for costly ongoing programs that threw the general funds into deficit as soon an inevitable economic downturn arrived in 2001.

The concessions brokered by the four-member Belmont-San Carlos fire board and Local 2400 received virtually no detailed recognition, since the board obviously had nothing to gain by embarrassing the union and Local 2400 would not be eager to call attention to a deal that might weaken their negotiations with other fire agencies.

In these particular negotiations the fire board had a bargaining chip that other cities might not possess. The board was able to make a case that district voters would be more likely to choose subcontracting their fire protection from a larger service unless the union made some visible concessions to keep costs down. And the firefighters themselves strongly preferred to remain an independent two-city fire department.

However, the Belmont-San Carlos negotiations make a good example for other Bay Area governments to emulate, demonstrating that employee concessions on dangerously high public retirement benefits are possible when both sides have something to gain.

“Before going to the voters for more taxes, we should ask for concessions from the public employee unions,” said fire board member and San Carlos Councilman Matt Grocott.

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