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Firefighters' Pension Deal Inked, But Skeptics Still Fretting Over City Costs

Today also marks statewide pension-reform vote in Sacramento.

The hotly debated pension contract for local firefighters — which now calls for them to kick in more from their paychecks toward retirement — was partially finalized this week, but the debate is not over as critics warn that Pleasanton and Livermore still face looming debt and financial fallout.

"It was a step in the right direction," said community activist David Miller of the latest firefighters' contract signed this week.

"But will this avert a fiscal crisis?" He doesn't think so.

The new pension and benefits plan for the was ratified Tuesday by and Local 1974 of the International Association of Firefighters union, which represents LPFD's unionized employees.

On Sept. 10, the union proposal goes before Livermore City Council for its approval, said Troy Brown, Livermore assistant city manager.

"We are certainly amenable to the contract," said Brown, who expects ratification from Livermore officials.

LPFD operates under a joint-powers agreement between Livermore and Pleasanton, and policy decisions must be approved by both cities, Brown said.

Under the new package, firefighters, whose previous pension and
benefits were at one time fully paid by both cities, will contribute 6 percent of wages toward retirement, with that figure rising to 9 percent in July 2013.

This contract is estimated to save Pleasanton and Livermore a combined $2.13 million — $1 million or so to each city, according to reports.

Firefighters are among a shrinking class of workers, along with such public servants as teachers, police officers, park rangers and judges, still offered traditional pension plans — a lifetime of guaranteed retirement payouts.

Most private-sector industries ditched pension plans in recent years, offering instead to its workers 401(k)-retirement packages, or "hybrid" pension-401(k)-style plans.

Today in Sacramento, meanwhile, "pension reform" is front and center with a final vote scheduled for new proposals laid out by Gov. Jerry Brown.

Lawmakers are squabbling and panicking over soaring costs of government workers' pensions and retirement costs — a purported $2.7 billion in fiscal year 2013. Honoring the pension commitments in a sagging economy strains state and local governments — and is often cited as contributing to municipality bankruptcies in such cites as Stockton and Vallejo.

Brown's proposal could save the state up to $60 billion over the next 30 years, and would require public-sector workers to chip in more toward their retirement benefits, along with other revisions, according to some reports.

The still-sketchy details are expected to be unrolled today to legislators — on the last day of this year's session.

Not surprisingly throughout California, worker contributions to their pension plans are being upped routinely as various contracts are renegotiated, and second tiers are often added with less generous benefits for new hires.

for Livermore police added a 5-percent kick-in toward retirement from officers' wages, for an estimated city savings of $374,00 over the next two years, according to the Livermore Police Officers Association.

officers agreed in February to a new contract, akin to LPFD, with the eventual 9-percent contribution to retirement, along with significant concessions for an estimated two-year city savings of $2.4 million, reports state.

So with government employees adopting concessions and stepping up to help fund benefits, are pension naysayers merely "Chicken Littles" worrying the sky is falling?

Pleasanton's Miller, for one, an engineer by trade, is among a small coalition of vocal activists opposed to contracts recently approved locally for fire, police and city workers.

Miller emphasizes he is not anti-police, anti-firefighter, not a union basher and dislikes references to civic employees as a rarified "protected class." In fact, he clarified, safety workers top his list of city priorities and he believes they should be well-compensated.

"I want them paid appropriately," he said.

The problem, he contends, is pension-style retirement is a financially  disastrous formula for cities when stock markets and economies slump.

"In a few very short years, we won't be able to sustain these pensions we promised to our city workers," Miller said. "That's not fair to either side."

Pensions and benefits for more than 1.6 million public employees, retirees and their families statewide, including LPFD, are managed by the giant California Public Employees' Retirement System.

CalPERS investment portfolios, which earned high rates of return in such go-go years as 1995 (25 percent) and 2003 (23 percent), recorded a measly 1.1 percent growth in 2011, and a negative-27 percent in 2008, according to published data.

Such under-performance leaves state and city entities on the hook to fund shortfalls for the guaranteed retirement payments, which legally cannot be restricted.

Miller said this "unfunded pension liability" in Pleasanton is between $125 million and $176 million, depending on varying calculation tables.

"And that's a growing number," said Miller, adding it is a hefty number, as well, for a city with an annual budget of roughly $85 million.

A portion of the Pleasanton liability figures falls to Livermore, however, as the cities share fire services, said the city's Brown.

As for unfunded pension liability on the books in Livermore, Brown said $34 million is estimated for "miscellaneous employee" packages — referring to personnel in non-public-safety positions.

Given such data, Miller advocates swapping the traditional public-servant pensions to a hybrid 401(k)-style program where retirees' investments, which dictate associated risks and subsequent payouts, are selected by the workers, themselves, as in the private sector.

"It puts the responsibility of managing that on the retirees," he said.

"I'm trying to raise awareness," Miller said. "My whole goal is we need to solve the problem at the state and city level."

The contract approved by Pleasanton lawmakers and soon headed to Livermore council chambers, he added, does not go far enough toward needed reform. 

The Livermore-Pleasanton Fire Department's newly negotiated two-year package affects more than 100 personnel who work from 10 stations: five in Pleasanton, on Nevada Street, Stoneridge Mall Road, Santa Rita Road, Oak Vista Parkway and Machado Place; and five in Livermore, on East Avenue, Rincon Avenue, Scenic Avenue, Cordoba Street and Airway Boulevard.

An LPFD training facility is on Busch Road in Pleasanton.

Rich Buckley September 03, 2012 at 07:08 PM
Well thank you. I hope no one is injured as well. The reality remains that retirement benefits need adjusting and the median age of productive years continues to increase. If statistics prove out 57 years for pulling hoses, walking roofs, and grabbing and lifting weights with no warm-up that doesn't necessarily mean other productive public sector services can not be rendered cost effectively.
John McWho September 04, 2012 at 07:35 AM
Nobody needs firefighters!! I vote: cute their salaries and pensions!!!!
The Real Anon September 04, 2012 at 04:43 PM
Why do public servants need defined benefit pensions? Pay them cash like everyone else and offer them a standard 401k, what's the problem?
The Real Anon September 04, 2012 at 04:45 PM
You should have a problem with it. Why do public servants need defined benefit pensions? What's wrong with a 401k? Why must taxpayers buy retirements for our public servants?
Terry Givens September 04, 2012 at 07:13 PM
John McWho your an idiot!.. Why are we bashing the firefighters for their pension and our problems funding it. Their 3% at 50 retirement was something that they bargained for. They were not just handed it they bargained for it by giving up other things. There is sound reasoning for them asking for and getting this retirement package. An average firefighter is 3 times more likely to get killed at work than the average person. Their life expectancy is 57 years of age, while the national average is 78! Due to inherent risks, physical and mental stresses, and exposures to toxic and carcinogenic compounds released in smoke. (source: US Bureau of Labor Statistics). That's right they live about 22 years less than the average person. Remember it takes two sides to bargain. We elected people to represent us and to bargin for us. They thought the pension was fine or they would not have agreed to it. So if you have a concern then it should be with the elected officials not our firefighters. And if your not sure why not get the facts straight from a firefighter. Ask them what their job risks are and why anyone in their right mind would knowenly give up 22 years of their life to perform. It's because they LOVE helping others even a John McWho!! Remember kids always wave at firefighters, and firefighters always wave back.

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