Tag Archive | "Fred Wilson"

Viewpoint: Surf City Ideologues Reject Pension Savings, Opt for Fire Service Cuts Instead


Editor’s note: At a public meeting on March 31 City Manager Fred Wilson and Mayor Joe Carchio were asked about the city’s budget, contract negotiations with public employees unions and “unfunded liabilities” for employee pensions.

“Absolutely not. I think what they did wasn’t the right way to do things. I think that what we’ve done is to try to address the budget challenge more methodically. We’ve looked at outsourcing, but it’s on a very limited [basis], but trying to do it very inclusively with everybody at the same time. There’s been no one who’s said we need to do what Costa Mesa has done.”

Fred Wilson, when asked if any city councilmembers had suggested to him that Huntington Beach should take the same course as the city of Costa Mesa, i.e., to outsource and lay off half of its public employees.

“Probably, collectively, it’s over $100 million. That’s a big number. It sounds big and it is big, but just so you know, what that number is based on is what CalPers, which is a state agency, what they tell us it is.”

Fred Wilson, on the city’s “unfunded liabilities.”

“I think we’ve done a fair amount of contracting out. If you compare what we do to what Costa Mesa does, I think you’re going to see that a large number of services that we provide are contract services. We’re moving in that direction but we’re trying to do it more responsibly, more balanced, and not take that hard-line approach to say that this is the solution. And we’ve discovered that contracting isn’t the solution to every single one of the services that we provide.”

Fred Wilson, more on outsourcing.

“Part of the answer is that the pay difference between that Authority (Orange County Fire Authority) and our fire department isn’t much different. The real question about saving is what level of service do all of us want as residents. For example, we have, I think, seven fire stations. We respond in five minutes generally 90 percent of the time…So the solution to really balance the budget is to cut back on the local services that we are providing residents and nobody wants to do that.”

Fred Wilson when asked about outsourcing fire protection services.

“I would disagree with you completely. There’s no proposal to increase any taxes. I gave you one proposal for storm drain fees that the city council has to approve. And just to let you know, at the last meeting the city council considered an increase to our trash rate. And part of that increase was a 7 cent per month increase to cover our costs and they said no. But that direction that’s coming back to us is that they’re not prepared to increase fees. The point is, it’s symbolic. And they’re not prepared to increase fees and we’re looking at employee concessions and we’re looking at reductions in our budget…”

Fred Wilson, responding to a question about alleged city tax increases.

“The city’s not becoming insolvent. I think if you look at our three-year projections for the impacts of pension costs, the numbers are, I think, $5 million, $8 million and, I think, anther $4 million. But overall our budget is over $175 million. So, if you’re putting it into percentages, you’re talking anywhere between two to three to four percent we have to cut incrementally each year. If we can do that the next two to three years, I think that we can manage our budget with those pension costs. But far more, I think employees have to pick up the larger share of the pension costs. We’re working on those. And I think between the two approaches we’re nowhere near insolvency at all.”

Fred Wilson, when asked if any study had been done to determine at what point the city would become insolvent if it didn’t take drastic action on pension reform.

“Everyone of our employees knows what the situation is. They know. And they’re working really hard with us in being great partners in trying to make this work. Because they all know that we’re in a situation. They read the newspapers. They watch TV just like you do and just like I do. So, you know, they’re not playing hard ball. They’re trying hard to cooperate and we’ve found that they’ve been really decent about it…”

Mayor Joe Carchio, speaking about the city’s public employees unions.

By Gus Ayer
Analysis and commentary
Special to the Surf City Voice 

Is Huntington Beach following the Costa Mesa train to Crazy Town, opting for confrontation instead of common sense with their employees?

On Monday, May 2, the Huntington Beach City Council, in closed session, voted against a proposal that would save the city almost $1.3 million in pension costs over the next two years and would also create a second pension tier for future public safety employees.

On May 3, Councilmember Devin Dwyer told city employees that if they hadn’t been there very long they should start looking for another job. He also said that negotiations with the Huntington Beach Fire Department had broken down, but he was quickly corrected by the Huntington Beach Fire Association (HBFA) president, Darrin Witt, who expressed an interest in continuing to talk.

Welcome to the wonderful world of Orange County right-wing politics, where ambitious young pols like Don Hansen and Matt Harper seem poised to try to get some of the publicity that Jim Righeimer has been garnering in Costa Mesa. Term limits will open up one seat each for state Assembly, state Senate and Orange County Board of Supervisors, and the players want to be seen as pension fighters and union busters to appeal to the hard core of Republican primary voters.  

As Mayor Pro Tem Don Hansen said on his Facebook page during the last city council election: 

“Let’s take our city back! If you see a police car or fire truck on the mail – that’s code for ‘union owned.’ We need taxpayer advocates not union puppets now more than ever!”

Mailers supporting Hansen’s endorsed candidates echoed the attacks on public safety employees and their pensions.

After three months of bargaining, HBFA members thought they had a deal that would save Huntington Beach $640,000 a year for the next two years. The proposed side letter to their existing agreement would also change the retirement formula for new hires in order to lower pension costs in the future. After three months of negotiations with staff, Witt felt that “We had met all of the council’s goals set out in the strategic planning session at the beginning of the year.”

Instead of taking two scheduled 2 percent raises, one of which had already been postponed for 18 months, sworn fire officers would apply that money to their pensions thus increasing their pension contribution from 2.25 percent of their income to 6.75 percent of their income.

In return, the firefighters asked for guaranteed staffing levels so that they wouldn’t have to cut the number of paramedics and engine companies that were available to respond to emergencies.  

As the council kept moving the goalposts, the paramedics and fire fighters included a budget trigger which would void the guaranteed staffing levels if revenues drop, expenses rise unexpectedly or if CalPERS increases pension rates.

Monday, May 2, in closed session, the Huntington Beach City Council voted against the savings, moving instead toward further service cuts that would increase response times.

Cutting the budget could mean service cuts that might idle one of the eight paramedic engines or one of the two ladder trucks. Budget cuts could also reduce availability of one of the cross-staffed specialized engines.

Do you cut one of the paramedic engines that respond to over 12,000 (911) medical calls a year? Or do you leave partially idle one of the two ladder trucks that have the ability to put firemen at roof level and carry additional equipment like the “Jaws of Life”?

Even without more personnel cuts to HB Fire, the annexation of Sunset Beach, coupled with fewer available units for mutual aid in surrounding cities, will put pressure on response times in Huntington Beach. The HBFD has already cut six full-time employees, including a battalion Chief, after the city’s revenues dropped substantially during the Great Recession.  

In neighboring Costa Mesa, Mayor Pro Tem Jim Righeimer pushes the party line with staunch ideologue Steve Mensinger at his side and a bumbling mayor following along. Their hasty decision to issue layoffs to half the city has made Costa Mesa a laboratory for right wing political experiments in California. The result is clear: the continued exodus of police officers, firefighters and managers is crippling the city.

In Huntington Beach, it’s Mayor Pro Tem Don Hansen calling the shots, with Republican Central Committee member Matt Harper, and former Central Committee member Devin Dwyer as comrades. All three are close allies of party boss Scott Baugh, a lobbyist and perennial meddler in Huntington Beach politics.  Joe Carchio plays the role of the bumbling mayor whose deal to accept that office a year ahead of schedule has been repeatedly questioned.

Don Hansen, his Red County buddy Chip Hanlon, and their Tea Party allies were big losers in the 2010 election. Two Team-Hansen candidates who hired Hansen’s wife’s consulting business, Red Zone Strategies, lost in the 2010 election. Measure O, a ballot initiative that would have shifted money away from public safety, also lost decisively.

At the core are Hansen, Harper, and Dwyer, who have walked away from the deal that would reduce the city’s current and future pension costs, forcing service cuts instead of compromise.

Councilmember Joe Shaw, elected in 2010 without support from the fire union, refused to comment on what happened during closed session but indicated that he strongly supported the recommendations of the city’s pension consultant, John Bartel.

“We hired an expert who recommended that we work towards a second, lower pension tier for all new hires and move toward getting employees to pick up a greater share of their pensions while holding salaries down. That is exactly what the Fire Association proposed, and it could have been a model for our negotiations with all of our employees,” he said.

The public needs to see this choice debated in public, not hidden behind closed doors. Writing at Chip Hanlon’s Red County, Don Hansen seemed to agree as he expressed his love for country music. 

One effective strategy is to adopt a set of financial policies that would be debated publicly. These policies would set the parameters for labor negotiations. For example, you could adopt a policy that says “The goal of all labor negotiations will be to increase the employee’s contribution to pension costs.”  

 In Huntington Beach, the city recently gave direction to negotiate the elimination of pending salary increases by the end of February. Taking a public vote in a meeting keenly observed by many of the union leaders sends a signal that there is a solid vote for such a solution.

By setting a more transparent policy goal prior to the commencement of labor negotiations, elected officials become more accountable for the ultimate result. Further, if your community leaders are not committed to fiscally sustainable labor policy their position will be publicly vetted as well. The economic consequences of these decisions are too great to allow them to be hidden.

Because no one knows what goes on behind closed doors.

There are three simple questions for the councilmembers who rejected the fire union’s concessions:

1)      What policy are you advancing by refusing exactly the type of pension reform that your own expert recommends?

2)      When are you going to have the public debate on whether the residents and business owners in Huntington Beach want to sacrifice response times for your ideology or not?

3)      Are you looking for sustainable budget solutions or just pandering to Republican primary voters so you can get some of the attention that Jim Righeimer has been hogging?

Photo: L – R: Don Hansen, Matt Harper, Devin Dwyer. Courtesty of Calitics

Gus Ayers is a former mayor of Fountain Valley. He writes for Calitics, where this column was originally published. Huntington Beach Councilmembers Hansen, Harper and Dwyer have been invited by the Surf City Voice to respond to Ayers.

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Vote by Unvigilant Council Usurps Treasurer’s Office and City Charter


By John Earl
Surf City Voice

If you have read the Huntington Beach City Charter and think that you have the right to elect your city treasurer, don’t be so sure.

Section 311 of the City Charter—the city’s equivalent to the U.S. Constitution—calls for the treasurer to be elected by the voters at large. But budget cuts and other changes approved Dec. 20 by a 6-0 majority of the Huntington Beach City Council (Connie Boardman was absent) leave little more than a figurehead for a treasurer instead of the vigilant watchdog intended by the charter.

The Director of Finance, who is appointed by the council and answers directly to the City Manager rather than the electorate, will assume the treasurer’s core duties if the legal wording behind the new policy is taken at face value.

The apparent coup d’état was performed by eliminating Section 2.16 of the Municipal Code, which explained the duties and powers of the City Treasurer in detail based on the City Charter, and then attaching several of its provisions to the end of Section 2.15 of the Municipal Code that explains the duties and powers of the Director of Finance.

Outgoing City Treasurer Shari Freidenrich warned that transferring the treasurer’s duties as proposed would be in “direct conflict with the charter and state law.” Eliminating staff would cause the treasurer’s investment decisions to suffer, she said, and went against the will of the voters, who had voted to keep their elected officials elected many times.

Freidenrich was elected to the office of Orange County Treasurer in November. She received kudos earlier at the council meeting (her last) from City Manager Fred Wilson for15 years of service in which she “restored the honor and integrity to the City Treasurer’s position” after the notorious 1994 Orange County bankruptcy.

But Wilson had presented an entirely different analysis than Freidenrich’s in his presentation to the council, saying that the city would save over $100,000 a year by making the treasurer a part-time position and consolidating the City Treasurer’s duties with the Finance Department while preserving the authority and independence of the office. “[Only] the duties and responsibilities not required by the City Charter to be performed by the City Treasurer shall be migrated to the finance director,” Wilson said.

Councilmember Keith Bohr asked City Attorney Jennifer McGrath if the city was in compliance with the law. “Yes, we are,” McGrath answered, “The charter does not speak to whether this position is part time or full time. And by deleting the ordinance you are actually taking it back to the core responsibilities as dictated in the charter.”

City Manager, Fred Wilson. Photo: Arturo Tolenttino SCV

Councilmember Joe Shaw asked if the City Treasurer’s office would retain its ability to act as an independent oversight in order to provide the checks and balances that it is intended to provide as an elected office. In the future, will the City Treasurer be able to do that? 

“Absolutely,” Wilson answered.

Based on McGrath’s two sentences of legal analysis and Wilson’s word, and without cross checking Freidenrich’s assertions with the City Charter, all six council members present were satisfied with the plan. But if they had bothered to read the outside analysis which Wilson cited in his written report as the basis for the final recommendations or to double-checked the charter for themselves before voting, they might have had second thoughts.

The report, “Final Report: Organizational and Staffing Evaluation of Limiting the City Treasurer to Core Charter Responsibilities,” written by Ralph Anderson & Associates, a government consulting firm, does recommend changing the treasurer to a part time position, limiting its range to powers and duties outlined in the charter, and transferring non-core duties over to the Finance Department.

But the Anderson report notes only one non-core function spelled out in chapter 2.16 of the Municipal Code: the collection of money. The report correctly notes that although the charter requires that the treasurer ultimately “receive” all city funds it does not prohibit the initial collection of the money by other agencies. The report recommends that function—and only that function—be transferred to the finance department.

The Anderson report goes further. In order to create a part-time treasurer and still provide the support necessary for that position to fulfill its charter mandate, it recommends that the City Treasurer have “primary support from the Finance Department to accomplish the Offices’ (sic) responsibilities.”

The report, which the six present council members apparently did not read because—although cited—it inexplicably was not attached to Wilson’s written report and probably also because they didn’t ask to read it, did not recommend cutting sections of chapter 2.16 that enumerate the charter mandated duties and powers of the City Treasurer and pasting them into chapter 2.15, which explains the duties and powers of the Department of Finance, but that’s exactly what Wilson did.

The result is a conflict between the city’s municipal code and the city’s charter, and a virtual coup d’état, either by design or by sloppy staff work, and by sloppy council oversight. Nobody on the city council bothered to check, but comparing the wording in the charter to the wording of the amended city law proves the point.

“The City Treasurer shall have the power and shall be required to,” according to the charter, “Receive on behalf of the City all taxes, assessments, license fees and other revenues of the City…”

But now, under the amended city code 2.15(k), the Director of Finance “Receives all City monies including taxes, fees, water, sewer and trash fees…”

Again, the City Charter states that the City Treasurer shall “Have and keep custody of all public funds belonging to or under the control of the City or any such office, department of agency of the City government and deposit or cause to be deposited all funds coming into his hands in such depository as may be designated by resolution of the City Council…”

But now, according to the amended city code 2.15(h), the Director of Finance “Establishes and controls all bank accounts, negotiates services and contracts with bank, makes daily deposits,…” and, regarding investments, in 2.15(l) also “maintains all trusts, bonds, security agreements, and funds for the City including depositing…”

Nowhere in the amended city code does it state that the City Treasurer has any authority over her transferred duties or powers, another indication that the supposed “consolidation” is at best an accidental transfer of power with the potential for future legal headaches or, at worst, a deliberate takeover.

September 15, 2009

At a town hall meeting held by the city’s Charter Review Commission, residents of Huntington Beach were asked to comment on possible changes to the City Charter, including the idea of changing the elected offices of city attorney, city clerk and city treasurer to appointed positions.

It was one of several meetings where the topic would be discussed along with many other charter reform ideas. At the end of the commission’s term various charter reforms were proposed to the council for placement on the ballot, but converting elected positions to appointed positions was not one of them.

Although strong arguments were made on both sides of the debate of elected versus appointed city officials, the question had already been put to the voters many times and their response was always crystal clear: ballot measures to have an appointed city attorney failed seven times; an appointed city clerk failed four times; and, an appointed city treasurer failed five times, most recently in 1996.

Due to the likelihood of yet another rejection by voters, the commission went with a proposal for stricter eligibility requirements for city treasurer instead of creating an appointed position, and that was passed by the voters.

In the past, the voters seemed to have said that they wanted accountability directly to the public in order to provide better checks and balances in local government. Freidenrich, speaking at the town hall meeting, noted the pressures that could be placed on an appointed treasurer to produce interest income, pressures that might lead to risky investments for the taxpayers. “An elected treasurer can be independent and unbiased an select the most important investments for the city,” she said.

Outgoing City Treasurer, Shari Freidenrich. Photo: Arturo Tolenttino SCV

In contrast, speaking at the Dec. 20 council meeting, member Don Hansen suggested a way for assisting the new part-time city treasurer to provide the “safety, security and liquidity” for the city that had been Freidenrich’s trademark by all accounts: investment bankers. They will be at the new city treasurer’s disposal, he said, and “we can’t dismiss their responsibility and commitment to the city in providing their services and experience…”

Whether the residents of Huntington Beach retain their right to elect their city treasurer in reality or in name only, and the extent to which they will have to rely on the recently proven commitment of investment bankers to to protect the public’s best interests, may depend on what happens at the second reading of the amended ordinance at the next city council meeting.

In response to a Voice inquiry, McGrath defended the quick legal opinion she gave to the council, and said the council’s actions were “wholly consistent with the City Charter, the Municipal Code and state law.” As for not answering Freidenrich’s assertions, it was not her responsibility to respond “unless asked by my client.” Only Bohr asked her a question. To that extent, she says, “I responded accordingly and there were no further questions.”

McGrath assured that she would be working closely with the city manager, finance director and treasurer to make sure that law is properly followed. But she also acknowledged that—in response to the concerns raised by the Voice—her office will “follow-up” by taking another look at the language of the ordinance, and “if an amendment is necessary to clarify any ambiguity, then it can be made at second reading on January 17 (sic), 2011.”

Note: The city council meeting will actually take place on the 18th due to Martin Luther King Day on Monday.

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