While the headline is somewhat focused on a local level the big picture comes to us from CalPensions.
I would urge incoming Mission Viejo councilman Dave Leckness to Agendize a rollback of the access to lifetime health care benefits for our part-time council members, an act which former councilman MacLean relinquished when recognizing that it was a major issue in the recent recall election.
It would be a safe act for our newest council member as both fiscal conservative council members Schlicht and Ledesma would support that idea and demonstrate that Dave is looking out for the best interest of all Mission Viejo taxpayers. As it now stands, if this benefit is left in place and members Kelley and Ury prevail one more time, it might cost the taxpayers around $500,000 going forward. Over 90% of incumbents are reelected.
Let’s show some local prudent leadership from this new 2010 city council.
According to CalPensions “retiree health care costs differ from pensions is their legal standing. In a series of court decisions, pensions are viewed under contract law as vested rights that cannot be reduced unless replaced by something of equal value. Retiree health care does not have similar legal protection. Last year, a federal court ruled in a San Diego suit that retiree health care was not a vested right, which some think allows benefit reductions. See text below.
Retiree health care: can $118 billion debt be cut?
By Ed Mendel San Diego officials think a federal court ruling will allow a cut in one of the biggest debts owed by California state and local governments — $118 billion or more promised public employees for retiree health care. The federal court ruled that San Diego’s retiree health obligation is not a “vested right” like public employee pensions, which are widely believed to be protected by court rulings that allow cuts only if replaced by something of equal value. San Diego officials think retiree health obligations can be reduced in negotiations with labor unions and, if there is no agreement, that a cut can be imposed through standard “impasse” procedures.
Jan Goldsmith, the San Diego city attorney, told the city council this month that “a big good step” was taken when several labor unions agreed to “analyze, evaluate and negotiate” the retiree health system under “meet and confer” rules.“This past summer we had an appellate decision that was in our favor that found — a 9th circuit federal court decision — that found that our retiree health system is not vested and may be negotiated,” he said.
“There are still some questions raised by labor organizations. But it’s one of those areas, in the future, that we can, we believe, negotiate reform.“As Mr. Goldstone pointed out — the meet and confer, which goes through the impasse process, if there is not success at the negotiating table. There are other pension issues that cannot go through that process due to the vesting issue, but retiree health is one thing that is open for discussion.”Jay Goldstone, the city chief operating officer, said in response to questions from councilmember Carl DeMaio that the city is paying $58 million for retiree health care this year, roughly evenly split between current expenses and future obligations. Goldstone said properly funding future retiree health, the “annual required contribution” in actuarial terms, would be an additional $60 million. DeMaio said the additional $60 million would boost the total city deficit to about $260 million. The councilmember asked what will happen if the labor unions do not agree to reduce the retiree health obligation.“I would imagine that we would end up declaring an impasse and be presenting this to the city council,” said Goldstone. “There will be a question that the attorney’s office would have to answer in terms of whether or not this is a vested benefit or not. We believe it is not a vested benefit. “And then if the council imposed a new health care plan, then we would take it forward, and labor would decide what response they would have to it.”
Gilbert comment. This post is not directed to health care benefits of any current city full time employees. It is directed at the five members of our city council who, by themselves or their predecessors, rewarded themselves of this self serving benefit without any voter approval.
We look forward to the date of this suggestion appearing on a future Agenda.
Leckness is the one who ran on a platform of “wave at a cop,” right? Sounds like he’ll be focusing all his energy on pushing that one thru.