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.
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.
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.