Ventura’s Pension Savings Illusion

VCStar Editorial – Feb 12,2011

On Jan. 10, with great pride and a little bit of creative math, the Ventura City Council approved an agreement with police and the Service Employees International Union requiring that members make payments toward their own retirement.

The city projected one-year savings of $1 million, thus offsetting most of the projected $1.2 million pension increase. The headline savings are real, only because the City Council chose to ignore parts of the agreement that may force the city to reduce services, increase costs, or both. More importantly, the city did nothing to address the massive $178.5 million unfunded deficit in the various pension plans.

Union concessions on pension contributions come with a price tag. The unions demanded and received an additional 35 hours for police and 27 hours for SEIU members of paid vacation time off each year. We estimated this vacation benefit will cost the taxpayers $673,000 including benefits.

The reason we calculated a cost for this concession is because the city did not.

The City Council faced a dilemma. If the savings from pension contributions were offset against the additional cost of new vacation benefits, the $1 million headline savings would evaporate. At that point, the City Council would be signing a contract that afforded minimal savings for the city, and guaranteed a reduction in services for the community as union members enjoy their newfound paid vacations.

Using Alice in Wonderland logic, the council solved its dilemma by concluding that awarding additional vacation time did not increase costs because police and SEIU members are paid the same if they are working, or while on paid vacation. Once the unpleasant task of dealing with costs that do not exist was dealt with, the City Council approved the agreement, claimed victory and adjourned for the evening.

Police and fire unions use their political clout to elect those who set their pay — the council members.

In exchange, these unions are rewarded with contracts like we see today, whose pension provisions now threaten the city with service cuts.

In response, police and fire unions demand more and higher fees and sales taxes to pay for gold-plated pensions.

The unions are politically dominant in this city, and only persistent taxpayer attention can overcome that reality. These unions and the City Council members will make as few changes to pensions as possible while hoping that an economic recovery will ease the city’s budget woes — and public scrutiny.