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Redding City Council candidates answer Question 4
We asked the eight Redding City Council candidates to answer one question a week for nine weeks until the Nov. 4 election. Answers appear word-for-word in the order in which they were received.
QUESTION 4
Courtesy of Shasta Voices White Paper.*City of Redding employees currently do not contribute any portion of their salary toward the cost of their own Public Employee Retirement System (PERS) pension plan. Typically, employees contribute at least half the cost incurred by their employer for the purpose of retirement plans. For those who are covered by Social Security and Medicare, that amount is 7.65% of their wages, matched by their employer. A benefits comparison survey shows that many other cities in California, which are providing the same type of retirement programs as the City of Redding through the Public Employees Retirement System (PERS) and the Public Agency Retirement System (PARS) for “enhanced” retirement benefits, require a contribution equal to half the employer cost to fund the program. That amounts to an 8% to 9% salary contribution from each of the employees. Certainly, an 8% to 9% reduction in costs to the City of Redding would add much needed revenues to the City to maintain existing services and infrastructure, without continually asking taxpayers for more money.
A recent example of how the negotiation process works is the approval of a new contract with one of the unions that represents a group of city employees. Major provisions of the package include cost-of-living adjustments for the next 5 years averaging 3% per year. The first year of the contract, the cost-of-living adjustment is reduced to .72%, so that the other 2.28% can be used by employees for an enhanced retirement benefit through PARS, commonly referred to as 2.7% at 55. So, a portion of the “cost-of-living raise” pays for the enhanced retirement benefit the first year of the contract, and the employee still pays nothing for the regular retirement plan, and is rewarded with enhanced retirement benefits.
At what point should this discussion begin, and changes be implemented? Should city employees be required to contribute to their own retirement plan like everybody else?
MISSY McARTHUR
The lessons to be learned by our City Council from the experiences of cities like Vallejo and San Diego and their bankruptcy are that Redding needs to match revenue and expenses, just as any business or family must do.– I believe that for new-hire city workers we may need to look at changes in compensation and benefit packages.
– I would support retaining an independent actuary to help us better understand the financial implications of the City’s compensation and benefit costs.
– As a cost saving measure, I would look at privatization of some services as we did for the new Redding Library.
THE TIME IS NOW for the City Council to be realistic and pro-active: willing to make tough and possibly unpopular choices. I am ready to assume that role.
RUSSELL K. HUNT
Talks must begin immediately. All city employees must contribute half to their own pensions and at least 25 % for their health care benefits. Police and fire employees generous 90% pensions at age 50 must end as well. The majority of people of Redding have modest incomes. Yet, our public servants are being treated like royalty. Our current leaders are weak and have caved into the unions. This is not surprising since three of the current city council members received endorsements and/or campaign contributions from these very unions.Since the public trust has been grossly violated, we cannot reform this excessive from within. Instead we must contract with the county for police, fire, planning, road maintenance, animal control, building inspections and other alike services the county has that are similar to the City’s. Such a small community does not need to duplicate bureaucracies .Doing such will cut employee expenses by 30%. From there development fees and hook-ups fees on new homes can be eliminated and housing will become more affordable for all.
City utilities should be placed under private management. Such management will decide the benefits for their employees based on comparable ones in the private sector. Currently, 20% of electric revenue goes to prop up other city departments. Instead electricity rates should be reduced to its shareholders, you the people. Solid Waste services will be ended putting such services up to private bid. When this city utility loses $1.8 million a year and pays garbage collectors $56,000 a year in salary and benefits, it is beyond reform and must be completely turned over to private enterprise.
DICK DICKERSON
Discussions on this issue began four years ago on the City Council. Changes relative to employee benefit costs have been implemented:— Employees now share in prescription cost for medication.
— Those hired by the City after November 2008, will no longer be eligible for City paid health insurance upon retirement.
— More improvements, subject to bargaining with labor unions, are being considered.During negotiations in the past, many employees gave up pay raises to obtain city paid retirement. Changes to existing contract can only be accomplished through labor negotiations. The law limits the percentage of retirement costs that an employee can be required to contribute.
I am fully aware of the concern by some about this issue. I too am concerned, but improvement can only come through the bargaining process, and in compliance with State Law. No “stroke of the pen” unilateral action can address this issue.
KEN MURRAY
This situation exists because many years ago the, then existing, council bargained with the unions to give this benefit in lieu of raises. It must be changed. Under law the current council may not take away a benefit. We can however change who pays for the benefit. We can bargain with the unions during contract negotiations to reduce the City’s contribution to the retirement plans. A start in this direction has been made by the existing council with new contracts that eliminate paid lifetime medical for all new employees at retirement. Further, we are now requiring employees pay a percentage of their health insurance and have increased the employee cost of prescription drug programs. We need to change from a defined benefit plan to a defined contribution plan. The City of Anaheim took this step in union negotiations. I will be meeting with officials from Anaheim this week to see how they accomplished this feat. I do know it took them six years of labor negotiations. Again, by law the council cannot just wave a magic wand and take the benefit away. It must be negotiated. Some of this has been done, more needs to be done and I am working to learn how to legally take this step on a practical basis. We are certainly not the only city with this situation and learning from those who successfully negotiated a change, and implementing those changes, will take time. Bombastic campaign rhetoric will solve nothing and potentially hurts the process the tax payers of Redding deserve and can have with patient, thoughtful work.
GARY CADD
The creative explanation given in the question above was the “shell game” used to explain this raise to the council. To the taxpayer, the reality is the current incumbents on the council gave away a 15% salary raise and a 6% pension spike while doing nothing to reduce the estimated $94 million liability in unfunded retiree benefits.Is it fair to the rest of the taxpaying public to give raises and pension spikes when businesses are being asked to scale back to offset higher fuel and product costs and even the city is seeing a decline in tax revenues? Public employees should be paid fair compensation that would compete with similar occupations in the private sector. Save the salary competitiveness for those occupations in extreme high demand and/or public priorities such as public safety.
With strong leadership on a new city council, we must step up fair but positive negotiations with the eight city employee groups recognizing a bankrupt city is bad for its citizens and employees. We must make real progress to ensure benefits are paid for upfront and that employees share at least as much responsibility for their own futures as taxpayers do.
JIM McDILDA
The present council has already begun to address the situation on employee contributions. This is common knowledge to those who have been following City Council meetings over the past several months. The time has long past on leaving such an overly generous employee benefit on the table.The question on the amount the employees contributes towards that benefit package should be the real question to be answered. I would first want to research what other cities of comparable size have their employees contribute. I feel that it should be a fair so that both sides come away from the table feeling like “they both gave more than they should have”.
I would like to apologize to the voters of Redding for not getting my answers to the “WHITE PAPER” in on time. I was extremely busy preparing for the Ducky Derby preventing me from completing it on time. The refusal by the Chamber to accept my late entry was their option. The money Ducky Derby raises for the schools will far outlast anything this “White Paper “contributes to this election. It’s about PRIORITIES! The money for education trumps special interests and long winded self serving agendas.
Terry Oxley did not respond.
John Wood did not respond.
Previously:
QUESTION 1
QUESTION 2
QUESTION 3
*Reprinted here from White Paper, with permission from Shasta Voices Executive Director Mary Machado, in conjunction with Greater Redding Chamber of Commerce.
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The answers of Mr. Dickerson and Mr. Murray are from experience. This does not mean I support either, however, after working for the city for many, many years, and seeing many councilors come and go, their answers demonstrate what they have learned. Every election, we hear the same issues come up; overpaid civil servants, too high of salaries, too good of benefits, employees don’t do enough on their jobs, etc. Then someone is elected, and within a short time of becoming a member of the council, they realize, wow, the city does follow rules. There are laws in place and those laws are being followed strictly by the city fathers. Monday morning quarterbacking is great. Privatize our electric…you’ve got to be kidding!?! A money maker like that? Give it to someone private? And our rates will match that of PG&E.
Mr. Murray is right to speak to Anaheim. They have a very similar set-up in that they have their own electric company, which only a handfull of cities in California do. Yeah, the got Disneyland too…lucky ducks.
And one more time for the record…I have worked many years with the city and I have a good position. I DO NOT make the “median” or “average” salary that is published from time to time in the media. Far less, and most of those behind all the counters do not either. But we do make a fair salary…and the majority of us work very hard. We have given up quite a bit to get a little. And the majority of us are very appreciative of that fact.
Just because we are tax-paid for does not mean my tax dollars don’t pay my salary, too. My salary pays the private sector salary in that I shop at your place of businesses and if I get good service, I return. (Well my cell phone experiences is another matter…have to have it…bad service all around…but oh well).
Remember pre-union United States? (Norma Rae where are you?) What’s it look like now? Wal-Mart and other box stores do not offer benefits (or limited) or living wages. Go after them. They can pay better and offer more so everyone is equal. Don’t take from the working “haves.” Work for the working “have nots” and get their billionaire owners to give a piece back to those who do the actual work.
The following summarizes the County’s retirement plan. The County shares with the employees in the cost of PERS contributions for the first 1-5 years of employment. I feel certain that the City would realize savings if they were to adopt this plan.
“The County of Shasta is in the Public Employees’ Retirement System (CalPERS) coordinated with Social Security (note - not all Safety members’ benefits are coordinated with Social Security). Members not in the Safety plan are covered under the 2% @ 55 formula, and Safety members are covered under the 2% @ 50 or 3% @ 50 formula, depending on bargaining unit. The employee (except for managers, and for DSA Sworn Unit personnel who are vested in PERS and laterally transfer from another law enforcement agency) pays 7% (9% for Safety members) of his or her salary, on a pre-tax basis (DSA not pre-tax) for a period of time as specified in his or her labor contact, or Personnel Rules as appropriate (this varies from one to five years). Thereafter, the County pays the employee’s share of the retirement contribution.”
It is unfortunate that the Chamber of Commerce chose not to include any information in their brochure about how those who received the brochure and read the candidates responses.
The brouchure begins with the question: How do the City Council candidates answer these quesitons?
The candidates have answered these quesitons. No mention of that fact in the brouchure.
Also missing from the brouchure is any nformatin as to how the questions were formated.
The author claimas that “hundreds and hundreds” of people were interviewed.
If so, how was that done. Were the interviews conducted in person, on the telephone or by a written survey?
Were the same questions asked in the same way?
Were the questions opened-ended, or were they leading quesitons, designed to elicit desired answers?
I believe that these are important quesitons that should be asked by those who receive a brouchure.
Transparenty is good in government , it should apply to all.
To read the responses from all the candidates, go to my website dickdickerson.com and link to it.
There are many Cities, Counties and School Districts in California that pay all of the employee’s share of CalPERS. The rational behind the practice, was that it saved money for the public entity. If the agency had the funds to give a salary increase of say 5%, that increase had to cover the cost of CalPERS, Social Security & Medicare, Workers Compensation, and Unemployment Insurance. But, if the public agency picked up 5% of the employee’s contribution to CalPERS the the employee received more in takehome pay and the cost to the public Agency was 5%, it was a win-win situation.
Eliminating Employer paid employee share of CalPERS will not save money for the public agency. It is a negotiable item and if the unions agree to give up the employer payment of PERS, the the employer will have to give equal compensation to the employees.
Mr. Troutmask,
I’m not sure if you work for the REU, but if you do perhaps you should do a lot more research concerning how the energy is purchased, or generated to meet our demand and how this affects the monthly cost of the Redding ratepayers.
Is the REU(particularly the power generation division) there to make large sums of money which in turn is either “loaned out” to other departments or accumulated in an account to be used for capital to build even more questionable generation capacity? As more and more is being spent for generation, one important point needs to be made. The approximate cost, as of August 2008, to generate a megawatt of energy from the most efficient generating unit loacted at the Clear Creek project is $120.00 - $135.00 per/MWHr. That cost only reflects what the City pays for the natural gas, transmission rights, estimated wear and repair of the particular generator, debt service and a few other ancillary costs. It doesn’t, on the other hand, reflect the cost of the operations, maintenance, and supervisory personnel. If they were added into the equation the cost of the same MW would be exponentially higher based on what an average power plant operator(11) is currently making annually(approx. $80,000.00 plus overtime) or a supervisor(4)($115,000.00). The salaries have already been verified by the loacl newspaper.
The same MW of energy can, except for very specific situations be purchased by the System Operations “Real Time” operators(also loacted at the Clear Creek site) for considerably less than the firm cost we quote from the City’s generator. When a true accounting is made of what can be saved by utilizing the knowledge and experience of an expanded System Operations Department to purchase energy, electrical transmission requirements and “real time” tracking of the electrical demand it will undoubtedly prove that privatization of portions of the REU would in fact save the ratepayers now and for many years to come.
Utility Insider,
It is called the cost of doing business. Every utility has the same overhead to generate electricity, the people to sell or buy it and to move it across transmission lines. Redding is lucky to have had the foresight to purchase transmission rights, build generation, and start marketing energy. That is why the rates are the second lowest in the state. The “Profit” goes in a fund to stabilize the rates and keep them low. Have you looked at the 4 tiered rate structure of PG&E?
What would happen to the lights if all Redding did was buy energy? When the current carrying capacity on the three 500kv lines is reduced and Redding isn’t able to bring energy to the city, do we turn out the lights for hours at a time to EVERYONE until we can buy more energy? When every utility is having the same problem bringing energy from the north, there are very few sources for energy from the south…so no lights! The local generation is for reliable service, cover NERC requirements to help stabilize the entire interconnected electric system, and to run when it is cheaper to generate than to purchase.
You know just enough to give people the thought that you might be correct. There is so much more to “keeping the lights on” than what most people know.
Dear EIEIoHNo,
I am not sure where you got your limited information from, but obviously it was from someone who does not know the City’s generation capabilities, electrical distribution, or very complex power purchases and contracts.
If your sources had a better understanding of the Clear Creek Project and Whiskeytown Hydroelectric Project, they would know that due to the very small generators(in relationship to the electrical grid) that the City owns, we can effect very little if any difference on the stability of the grid in terms of voltage or VAR control. As far as foresight to build generation, why did the City purchase three simple-cycle GE gas turbines that are so outdated that spare parts are not even available from the manufacturer anymore?And why do these same gas turbines have emmission control catalyst that can only be operated a maximum of 40 days a year before it has to be replaced at the cost of $1.5 million? And lastly, I guess they don’t know that if the capacity of the 500 KV is curtailed due to line failure, earthquake or whatever there is absolutely no physical means for the City’s power plants to get power to the citizens because there is no procedure with which to do so and you can not parallel the City’s generator’s up against a dead bus!!!
I guess you are starting to get the picture EIEIoHNo. I do know what I am talking about.