Friday, January 27, 2012

Leaders Volunteer Maximum Pension Rate(Amended)***

City of Costa Mesa Communication Director Bill Lobdell issued a press release Friday afternoon announcing that the city's top leaders have volunteered to pay 39% of their pension costs. The text of that press release is below:

City of Costa Mesa leaders volunteer to pay 39% of their pension costs, one of the highest employee contributions in the state

COSTA MESA, Calif. - The top leaders for the City of Costa Mesa have volunteered to pay 39% of their pension costs—the highest rate possible—saying they need to set the example of contributing their full retirement share to help insure the city’s finances are sustainable. The employee contribution will be one of the highest in California for public workers.

“We don’t know of any city in the state where public employees are contributing this high of a percentage to their pensions,” Mayor Gary Monahan said. “It makes me very proud that Costa Mesa’s leadership team is leading the way when it comes to pension reform. This is a landmark for Costa Mesa and its residents.”

The move to increase pension contributions will affect eight city executives, including Chief Executive Officer Tom Hatch, Assist. Chief Executive Officer Rick Francis, Economic Development Director Peter Naghavi, Police Chief Tom Gazsi, Finance Director Bobby Young, interim Public Services Director Ernesto Munoz, and interim Development Services Director Khanh Nguyen.

Interim Fire Chief Tom Arnold is not paying into the retirement system and will be unaffected, but his successor will pay his or her full pension share.

The estimated annual taxpayer savings from the increase contributions, including the fire chief’s share, is more than $50,000.

Non-public safety executives are currently paying 31.49% their pension costs. The contribution increase will go into effect as soon as it’s approved by the City Council, likely at its Feb. 7 meeting.

Police Chief Gazsi currently pays 11.61% of his pension costs (as do other Costa Mesa police officers), with the City picking up the remaining 88.39%. Police officers are allowed to pick up 48.633% of the cost of their pensions. Gazsi and CEO Hatch are currently working on a plan to move the police chief toward this maximum contribution level.

When hired, the new fire chief will immediately begin paying 49.32% of the cost of his or her pension, if the City Council approves the increase in employee contributions. Currently, the fire chief would be paying 12.92% of his pension costs, with the City would be picking up the remaining 87.08%).

Recently, due to an expired clause of a labor agreement, Costa Mesa firefighters (excluding battalion chiefs) dropped from paying 12.92% of their pension costs to paying 2.15%. The City now pays 97.85%. In real terms, the firefighters now pay $103,000 annually to their pensions, and the city pays $4.7 million

In recent negotiations, the City has asked the firefighters to pay the 29.92% of their pension costs.

“Our leadership team felt like we couldn’t be asking employees to make their full pension contribution unless we did it first,” said Chief Executive Officer Tom Hatch. “In these times, it was the right thing to do for our City and its residents.”

However, others feel this announcement left out some important details. For example, Jennifer Muir, Communication Director for the Orange County Employee Association, sent this comment in response to the press release: The true leaders in Costa Mesa, the City’s rank and file employees, have been paying nearly 40 percent of their pension costs for years. And we’re supposed to be celebrating that the City’s leadership is following that great example? I guess it’s better late than never.”

Saturday afternoon Communication Director Bill Lobdell sent me an email refuting the "facts" provided (above) by Jennifer Muir. Here's what he wrote to me:
"Muir is flat out wrong.

1. Until now, all general employees -- managers and rank-and-file -- made the made the exact same contribution. This fiscal year it's 31.5% of the total pension costs.

2. Muir apparently used LAST fiscal year's numbers, when ALL non-safety employees paid about 38% of their pensions. But pension costs went up this year and the employee contributions stayed the same, reducing the percentage paid by employees down to 31.5.

By the way, Muir knew her information was wrong late Friday afternoon because the Register and Voice of OC reporters told her, but I guess she didn't bother to correct it with you.

Only Muir could take what is a positive step forward for the City and is residents and, using false information, twist it into something divisive."
So, the beat goes on...

OK, this is it now on this post on this subject. Jennifer Muir read Bill Lobdell's reply and offers the following rebuttal. This will be the last entry on this post on this subject... it's getting too complicated to follow. Anyhow, here's Jennifer's comment from today, Monday, January 30th:

"Bill Lobdell is correct that I was using last year’s PERS rate when I emailed you. I only realized later that the rate had subsequently changed. That said, the employees demonstrated true leadership when they agreed to that contribution level in 2010 – a level that is virtually the same as what executives are agreeing to now. The only reason managers and executives shared the same contribution rate back then is because CMCEA employees led the way by negotiating those contribution levels. I pointed that out to you because it’s deeply disappointing to employees when the City’s media machine consistently fails to acknowledge efforts and sacrifices the rank and file have made these past several years. Plainly, that is what’s been divisive."

Also missing in this dialogue is that fact that - despite mention being made of recent negotiations with the firefighters - as I understand it, no overture has been made by City management to ANY of the individual bargaining units during the past 12 months requesting a discussion of modifications to the current pension rates. Instead, the elected (and appointed) leaders of the city have chosen to create a hostile, adversarial atmosphere and attempted to violate their own rules by issuing premature layoff notices to nearly half the staff.


While this gesture by the top leaders in the city is certainly noteworthy and is much appreciated, the reported $50,000 savings to the city represents only a drop in the bucket. It is hoped that the C
ity management will actively engage the bargaining units in sincere, meaningful discussions about pension contributions, and do it soon. It is my understanding that each of the individual units would welcome those kind of conversations. I guess we'll see...

Labels: , ,


Anonymous Eric says said...

I think this release is using some "RIGGY MATH". It just doesnt add up. The release list 8 heads of departments, with an avg salary of OVER $125,000/yr ( Hatch makes $160k+)

So if the city admits to ONLY A $50,000 / YR SAVINGS, that is about $6000 a year per person. OR ABOUT $500/MONTH PER "HEAD"

So, look at it this way.....

8 HEADS x Avg $125,000 = $1,000,000 in salary.

The city is crying about PERS requiring over 40% cost per employee. THAT IS $400,000+. (not all true)

NOW- they state each head will pay 39%, or $390,000 of city cost.

Currently the avg "Head" pays 10-12% or $120,000 of city cost.

SO IF YOU BELIEVE THE "Lobdell lie release", the city would have a savings closer to $270,000.


And I seriously doubt Hatch would take a $43,000 pay cut ( that is his payment for his additional 27% contribution).

Riggy likes to use FUZZY MATH AND SLIGHT OF HAND TO TRICK THE PUBLIC.... remember his statement that he received 75% of all votes at the election..... yet barely 10% of the citizens voted.

I WOULD LIKE TO ADD..... it sounds wonderful the HEADS OF THESE DEPARTMENTS ( the last rats of the sinking ship ) ARE WILLING TO PAY $500 / MONTH MORE TOWARDS THEIR PENSIONS...... BUT REMEMBER....


So lets call apples, apples and oranges, oranges.

1/27/2012 11:35:00 PM  
Anonymous No said...


1/28/2012 01:39:00 AM  
Anonymous Are voters ign'ant? said...

Well, with this party propaganda piece, Lobdell is earning his money. It's ALL b.s.

Riggy is betting that the voters are too stupid to see through this. Time will tell.

1/28/2012 06:33:00 AM  
Anonymous X said...

5 same public comment speakers on every item @3
minutes=15 minutes X 4 items = 60 minutes. That is about 1/6 of total time to conduct a council meeting.
So, look at it this way....5 speakers cause us to pay more every meeting for staff and lawyers, stifle progress, create ill will, and generally drive other residents away. And they are crying to "slow down" even further. apples to apples, ready fire aim, shiny objects, memos.......ugh!

1/28/2012 06:57:00 AM  
Anonymous Thank You said...

Thank you City of Costa Mesa leaders for taking this important step in reforming pensions.

It is recognized and appreciated.

1/28/2012 07:10:00 AM  
Anonymous Wyatt Earp said...

Eric, thank you for that breakdown. I was kind of scratching my head wondering where those numbers came from because they didn't sound anything like what has been talked about in recent memory. As I understand it, most of these leaders are new meaning they are not yet at top step salary. Therefore, they can absorb these increased costs knowing they will make it up over time.
I can only also say it is about time since all line level employees have saved the city millions through pay and benefit cuts since at least 2008. That should be reported every time an issue like this comes up.

1/28/2012 07:26:00 AM  
Anonymous Wyatt Earp said...

Eric....That is also why the press release gives percentages rather than raw numbers. It is fair to say the raw numbers are rather underwhelming while the percentages seem to indicate large scale savings. The city is just trying to trick people again. They hope the folks are asleep at the wheel.

1/28/2012 07:29:00 AM  
Blogger Joe said...

Das Riggmarshal touts a supposed 50K savings, then turns around and blows six figures on legal fees the following month.

Sounds like a loss to me.

1/28/2012 07:41:00 AM  
Blogger Angry White Man said...

I can't believe they actually think this is an accomplishment....
It took a $150,000 a year guy to write this press release to celebrate a group of either recently created and arguably not needed executive positions plus the interim promotions of the development services director and public services director positions. So it looks like the city spent about $500,000 to save $50,000 so we are now in the hole another $450,000.
Wow...great job council, will that $50,000 go to the out of control legal costs?

1/28/2012 08:37:00 AM  
Anonymous This City is Sh!#% said...

Great post Eric, there does seem to be some strange addition with these numbers. Stand by for a new release from the spin-master.

1/28/2012 08:56:00 AM  
Anonymous Phil said...

More poison and hate from the thugs at OCEA. They should stay out of our City's business.

1/28/2012 09:14:00 AM  
Anonymous lipstick on a pig said...

Don't forget when they pass the charter city. they can vote themselves raises,cars,retirement deals. All without press releases. Just another diversion, watch your six

1/28/2012 10:17:00 AM  
Anonymous Barry said...

And what do CM police and fire pay? Oh yeah.

1/28/2012 10:26:00 AM  
Anonymous Central Valley Farm Animals said...

X/Little Steve:

"5 same public comment speakers on every item @3
minutes=15 minutes X 4 items = 60 minutes. That is about 1/6 of total time to conduct a council meeting.
So, look at it this way....5 speakers cause us to pay more every meeting for staff and lawyers,"

Sure: No speakers, no 1st Amendment in the USA/Costa Mesa = More money for you and your developer and carpetbagger friends. What a wonderful world it would be- just you and your pals in charge, telling all us little people what to do.

With your great business acumen and experience, coupled with your vast football knowledge, the voters will happily revoke the Constitution and let you chest-bump your way to become Emperor.

1/28/2012 10:41:00 AM  
Anonymous Wyatt Earp said...

Nice try Barry. The cops and FF's were the first in 2008 to volunteer pay and benefit decreases to help out the city, and they have continued to do so. Remember, it was you beloved city council that refused an offer from the FF's to save the city $300,000 to $500,000 in the short term while they continued to talk about ways to save in the long term. So, in reality, your beloved council has actually COST you $250,000 to $450,000 with their stupid ways. But thanks for throwing in your two cents.

1/28/2012 11:22:00 AM  
Anonymous RacistBoy said...

..MM is also Barry and Phil

1/28/2012 01:15:00 PM  
Anonymous Tom Egan said...

To "Eric says,"

I think the difference between their $50k estimate and your $270k estimate has to do with what they have already been paying toward pensions.

Buried down in the sixth paragraph is the observation that "Non-public safety executives are currently paying 31.49% their pension costs."

Easy to miss among all the words.

So, they've signed up for paying just an additional 7.51% in order to get to the maximum 39% allowed by Calpers.

Using your estimate of $1m for all eight, the yearly hit for them would be $75,100. This is closer to the media release's $50,000.

This is perhaps the first time in recorded history that city hall has understated the benefit from one of their maneuvers.

Perhaps feeling guilt over being truly conservative (as city hall used to be before Righeimer and Hatch), the city's spinmeister then spewed a lot of confidential info and withheld some critical info about contract negotiations.

Here's what he said and didn't say:

"Recently, due to an expired clause of a labor agreement, Costa Mesa firefighters (excluding battalion chiefs) dropped from paying 12.92% of their pension costs to paying 2.15%. The City now pays 97.85%. In real terms, the firefighters now pay $103,000 annually to their pensions, and the city pays $4.7 million

In recent negotiations, the City has asked the firefighters to pay the 29.92% of their pension costs."

First of all, when did it become OK to reveal such details of negotiations? Is this some newfangled innovation from the business side of life? It's not something that's done in municipal life.

(btw, keep that word, "municipal" in mind; if Righeimer's charter is approved, they'll be able to do anything that is a "municipal" matter, unless it is spelled out in the charter.)

And second, the spinmeister did not mention the counteroffer the firefighters made.

Taken together, the excess and deficiency of info leaves the reader with the impression that city hall is the white knight and the firefighters are scurvy dogs.

This is shameful behavior, especially for a city that contends it is "transparent."

Attention, Funk & Wagnalls: looks like city hall has created a perverse definition of "transparent."

We report. You decide.

1/28/2012 01:58:00 PM  
Anonymous Tom said...

All department heads hired in the past ten years are "at will" employees. Pay up or get replaced!!!!

1/28/2012 03:12:00 PM  
Anonymous Thomas Jefferson said...

The General City Employees last year according to the email from the city spokesperson to the Cauldron admits the General City Employees paid 38% of their share. I do not remember a sounding of the trumpets for them last year. In fact I believe some vilified the General City employees at council meetings as being tone deaf and evil. Sadly what they got were new or extended lay-off notices for their efforts. Also of note when the city does release info on the General City Employees and what they pay they like to use the percentage of their salary and not the percentage of what is paid because the former is a much lower number. The city doesn't want the public to see the 31% or last years 38%. They want the public to only see that employees are paying 8.5% of their total salaries because that percentage is lower than the 38% of last years numbers of their total percentage paid.

1/28/2012 05:38:00 PM  
Anonymous A shill by any other name said...

Oh Lobdell, you are such a shill. Jennifer may of been wrong on some of her facts, but so are you. Instead of percentages, why don't you put it in actually dollars. Another thing, per the agreement with PERS, employees can only pay a certain percentage of their salary to PERS. They can't pay the entire amount. You like to twist things around to confuse people. Use Hatch as example. State his salary, health benefits, car allowance, etc. State how much he now pays toward his retirement based upon what he was paying before. It will not be that significant.

1/29/2012 09:54:00 AM  
Anonymous OC Memory said...

Lobdell and Swaim used to be great, respected writers.

Look at them now.

Say what you want about Mr. West, he never sold out.

1/29/2012 11:17:00 AM  
Anonymous Jon said...

How can anyone take Lobdell seriously after accepting a salary greater than most public employees currently on staff (3,000 x 52 weeks a year) and also publishing a diatribe against public employees in OC Metro in 2010? Lobdell makes more than a hundred thousand dollars a year more than I do. He was hired by the same people who are trying to demonize public employees and lay them off using TAX PAYER MONEY!!!

1/29/2012 07:58:00 PM  
Anonymous Facts don't lie. said...

The spin on here is absolutely hilarious.

Wyatt Earp, the facts don't lie:

Look at the top 50. How many are NOT police or fire? How much are police and fire contributing?

1/29/2012 09:25:00 PM  
Anonymous Lies are Fact said...

Billy Lobdell--take it easy, you don't need to be so hot under the collar, just because somebody disagrees with your info. Take a second and level your head out. You do a job where the puppetmaster gives you the orders and you spin it, you have to prepare for some flak.

1/30/2012 09:32:00 AM  
Anonymous Wyatt Earp said...

Facts don't lie...exactly what are you talking about? The facts are the your city would be in complete dire straits (its not, $3.8 million surplus due to the concessions made by employees the past 4 years) if not for the employees and the voluntary concessions. But, since as you say facts don't lie, it is a fact that the FF's alone attempted to save $300,000 to $500,000 for the city over the next year as they discussed further and greater cost savings. The $50,000 is savings on behalf of these executives pales in comparison to the FF savings alone, not to mention the cost savings from general employees and the savings contained in the cops most recent contract (remember another fact, the city could have save even more money on the cops' backs but chose to ignore them for 4 months costing you and I $500,000 increased costs. Gee that sounds just like the city game plan towards the FF's).
Nice try. Better luck next time and remember to bet on black.

1/30/2012 10:41:00 AM  
Anonymous ?? said...

Wyatt Earp,

True or false:

Employee offers to contribute more are tied to contract extensions.

Those offers to contribute are less than asked for by the city.

1/30/2012 12:48:00 PM  
Anonymous Wyatt Earp said...

??...Of course they are. The employees gave something for nothing back in 2008 to 2010. Extending a contract at current pay and benefit rates (not including pension contributions) regardless of if the city gets windfalls in revenue in years to come versus immediate savings and continued savings for the duration of the contracts? Seems like a no brainer win-win for the city. Except, of course, for the brainless unfab four on the council.

1/30/2012 01:52:00 PM  
Anonymous X Marks the Spot said...

Don't kid yourself. The executive managers did not volunteer to pay more to PERS regardless of what Lobdell puts in his press release. They were told to. You people are so gullible to the works of the spin master.

1/31/2012 12:51:00 PM  

Post a Comment

Links to this post:

Create a Link

<< Home