Posted on 10 May 2011.
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.