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The Farsider

March 8, 2012


Bill Mattos, Editor and Publisher <bilmat@comcast.net>
Leroy Pyle, Webmaster <leroypyle@sjpba.net>


The Farsider is an independent publication that is not affiliated with the San Jose Police Benevolent
Assn. The SJPBA has allowed the Farsider to be included on its web site solely for the convenience
of the retired San Jose Police community. The content of this newsletter does not represent or reflect
the views of the San Jose Police Benevolent Association's Board of Directors or its membership.



Most recent I.D. card photo

Badge 1182
Born May 19, 1932
Appointed Nov. 1, 1966
Promoted to Sgt. Oct. 1, 1978
Retired June 3, 1987
Died Feb. 28, 2012

According to Jay's son, retired Ofcr. Brad Martin, his father and mother were "snow birds" who spent winters in Yuma to escape the cold climate of Powell Butte, Oregon (near Bend). When Jay developed a bad fever and saw a doctor, stage 4 Lymphoma cancer centralized in the liver was discovered, and he was transferred from a Yuma hospital to a hospital in Phoenix for treatment. He passed away on Feb. 28th at the age of 79.

A memorial service is scheduled for March 31st at the Church of Christ, 925 NW 7th St., Redmond, OR 97756.

Brad OK'd the publishing of his cell phone number should anyone have any questions: 541-410-7044.

Following is an obituary that had been prepared for the Mercury News. We received it from Brad last Sunday:

~ ~ ~

W.J. Tilmon "Jay" Martin passed away unexpectedly on Feb. 28, 2012 in Phoenix, Arizona at the age of 79. He was born to Shavor and Lona Martin in the small town of Orange in Orange, CA on May 19, 1932.

Jay joined the U.S. Air Force in 1951 and served two years of his 4-year tour of duty as a sheet metal technician repairing aircraft during the Korean War. He received his honorable discharge from the Air Force in 1955. Two years later he and Marilyn Jean Davis were married and settled down to raise a family.

In 1966, Jay joined the San Jose Police Department where he served for 21 years before retiring as a Sergeant in 1987. He was considered a problem solver and highly respected by his peers during his police career. Following retirement, Jay and Marilyn moved from San Jose to Grants Pass, OR where the couple raised Tennessee Walkers as show horses. They later moved to Bend, OR so they could be closer to their children and grandchildren.

Jay loved riding horses and spending time in the mountains where he enjoyed the peaceful solitude they provided. He also loved hunting deer and elk from horseback with his friends.

The couple escaped the cold Oregon winters by spending time in Yuma, AZ where they soon became friends with other "snowbirds" as well as members of the Church of Christ, where they regularly attended services, and where Jay would become a church elder in the Church of Christ in both Grants Pass and Redmond, OR. Jay's faith in God was one of his strongest character traits.

Jay is survived by Marilyn, his wife of 57 years; a son, Brad Martin of Bend, OR, and two daughters: Shelly Dietsch, also of Bend, and Leslie Martin of San Jose. He also is survived by five grandchildren and three siblings: Dariel "Dee" Martin of Culpeper, VA, Merle Martin of Paradise, CA, and Beverly Horton of San Diego. Hay was preceded in death by his youngest daughter, Kristi Martin.

A memorial service is scheduled for Saturday, March 31, at 2:00 p.m. at the Church of Christ in Redmond, Oregon.


(L-R, mid-1970s) Jim Silvers; Stan Horton, Jim Cornelius, Jay Martin, Lloyd
Meister and Lyle Rice. (Stan, Jay, Jim Cornelius and Lloyd are deceased.)

Jim Silvers, who worked with Jay back in the '70s and learned from Brad about his father's passing last Friday, wrote and asked if I could find and e-mail him the photo above that he provided when I covered the death of Jim Cornelius. The Archives pointed me to the May 22, 2008 Farsider that included the photo in question. After I e-mailed it to Jim he replied with the following...

March 2nd


Thank you for the picture. I talked to Brad and got a forwarding e-mail address for the photo. The picture had been requested by Stan, and it hung in his office even after he had been promoted to Asst. Chief. Brad said he had just signed up for the "rag sheet" (Farsider) — my words, not his —  so I think the family would appreciate comments.

I worked with J.W. in the Fencing Unit, which preceded the Burglary Prevention Unit (BPU) where I also worked. J.W. and Lyle Rice worked together as did Corny and I. Lloyd Meister was the Admin. Sgt. and, of course, Stan Horton was the Boss (he was a Lt. at the time).

The concept of a fencing unit originated with the Portland (Oregon) PD. We were the second police agency in the nation to implement one, and we had some really good times. I remember J.W as the calm, level-headed one. When things went south, he could be relied upon to figure out what to do. And with our gang, things went south a lot.

As usual, when a friend passes it's not uncommon to ask ourselves, "Why didn't I stay in touch?" That is especially true in J.W.'s case. As Chaplain Bridgen would say, "It's something to think about."

(Silvers) <jimsilvers@silversmail.com>

• • • • •



Badge 1297
Born June 26, 1942
Appointed Nov. 16, 1967
Retired March 11, 1995
Died Feb. 20, 2012

The following obituary is from the March 5th Mercury News...

Richard S. Weiser — Resident of Aptos, California

Richard Weiser (a native to San Jose, CA and longtime resident of Aptos, CA) died at home in the company of family on Monday, February 20, 2012. Richard was a loving and devoted father, husband, friend and civil servant having proudly served both in the U.S Army and providing the San Jose Police Department 28 years of committed service. His generous nature and kind heart made a lasting impression on everyone who knew him. As a family man, he was a dedicated father to his two daughters, Charmain Weiser and Shereen (Weiser) Caswell. He was also a loving and devoted husband to Michelle (Engdol) Weiser whom he unfortunately lost to cancer in 2008.

Richard would most like to be remembered and honored for his years of service to the military, the San Jose Police Department and the community. In lieu of flowers please send donations in his name to Disabled American Veterans.

A private service will be held at a later date.

Friends can sign and/or view Rich's guest book by clicking on this link:

Darrel Richter was one of several retirees who became aware of Rich's passing earlier this week. He sent in the following:

March 5th

Hi Bill,

Rich and I were long time friends at the PD and enjoyed living our lives in Santa Cruz County. We hunted deer together all over Northern California, were 49'er season ticket holders, etc.

He was a great guy and a particularly private family man whose wish was to remain so, thus a small private memorial to honor him will be held.

Thank you for all you and Leroy do for us! It is sincerely appreciated.
Darrel Richter, Lincoln, CA



Important note: Make sure you read my footnote at the very bottom of this item...

This touches on the subject of healthcare costs for retirees. That the cost of medical coverage for retirees under the age of 65 will be increasing appears to be a slam dunk. The question of whether those retirees over the age of 65 who are covered by Medicare will have to pay more isn't yet clear. We should be able to answer that question next week.

Last Sunday, March 4th, the POA sent a Membership Alert to all members describing its proposal to the City with the hope that it will be adopted by the Council in lieu of the City's proposal. Of special interest is the portion of that Alert that speaks to healthcare costs for active and retired personnel. (It's included below.)

Craig Shuey has been closely following everything related to the pension reform issue. After reading the lengthy March 4th Membership Alert, he had some questions about healthcare for retirees, so he sent POA President Jim Unland and VP John Robb the following message...

March 5th

Jim and John,

While you both are going 100 MPH in negotiations, I reluctantly ask you to clarify a point you made about retirement medical costs In the Membership Alert you sent out yesterday. You wrote:

"Our proposal would still offer retirees a free healthcare plan, but it would come with a high deductible. In order to keep the Kaiser plan they have now, they would pay the same 15% that active members are paying."

My questions:

1. When you say "retiree," do you mean current retirees, future retirees, or all of the above?

2. You indicate that your "proposal would still offer retirees a free health care plan...but...with a high deductible." However, you go on to say that "they" (I think you mean retirees) would "pay the same 15% that active members are paying," thus implying that the medical will not be free. My simple mind sees this as contradictory. Will retirees still have free health care but with higher deductibles, or start to pay 15% of the premium that members pay? Or worse yet, all of the above?

Thanks for your tireless hard work.

Craig Shuey #1459 (Ret.)

Jim Unland's answer was included in this e-mail we received from Craig...

March 6th

Here is the response I received from Jim Unland. It doesn't go unnoticed that he has alligators nipping at his ass, but I still don't understand how a "free" healthcare plan will cost us 15%.


Unland's response...

March 6th

This will affect “all of the above." The high deductible plan would be the “free” plan. If a retiree wanted to keep the Kaiser plan they have now, they would have to pay the 15% that the e-mail talked about.

Jim Unland

* See my editor's footnote at the bottom of this (partial) Membership Alert..


March 4, 2012

(I have reprinted only that portion of this March 4th POA Membership Alert that pertains to healthcare for active and retired personnel...)


Another area of change is in our retiree healthcare. Currently, active members pay 15% of the low-cost healthcare plan (Kaiser). For individuals, this amounts to $956.64 per year (79.72/month). For the family plan, this amount is $2,382.48 per year (198.54/month). Under our current plan, when you retire this 15% fee goes away. That is to say that retirees get Kaiser for free, but pay some money if they want one of the Blue Shield plans.

Our proposal would still offer retirees a free healthcare plan, but it would come with a high deductible. In order to keep the Kaiser plan they have now, they would pay the same 15% that active members are paying.

The City has been looking for a way to increase the costs to retirees by 25%. While this news will not be welcomed to our retirees, our active members are bleeding money. We felt that having retirees pay the same as actives beats the alternative.

That is probably the best way to sum up this email. No one wants to see our benefits reduced or our costs to go up. This proposal is an effort to find modest (a relative term) changes to our benefits package that still keeps all of us whole.  Considering the alternative, it's not bad.

Jim Unland
John Robb

Ed. — After I prepared this article on Tuesday of this week based on info provided by Craig Shuey, the question of how retirees who are over the age of 65 and are therefore covered by Medicare will be impacted, so I sent an e-mail to POA President Jim Unland and asked that very question. Within a couple of hours I received the following reply:


Great question. Let me see if I can get a clear and accurate answer for you over the next couple days.


As of press time there has been no reply. Logically, it makes no sense that retirees covered by Medicare will incur the same cost as retirees who don't have the coverage. Whatever the case, we'll have to wait for an official answer, which we should have by the time we go press next week.



If you act quick, you still have time to send the D.A.'s Office a letter expressing your opposition to Emile Thompson being paroled. Letters must be received prior to next Wednesday, March 14th, as Richard's killer goes before the Parole Board on April 4th.
Send them to:

Santa Clara County District Attorneys Office
Lifer Hearing Unit
Attn: Deputy DA Ron Rico/Maria Serrano
70 West Hedding, West Wing
San Jose, CA 95110

Re: Emile Thompson, CDC # B38349



Farsider readers,

Unfortunately, we have had to cancel the Cioppino Feed scheduled for this coming Saturday that was to benefit the Chaplaincy as we are nowhere near the number of ticket sales needed to make it possible.

We are going looking forward to this year's Golf Tournament and hoping for a better turnout. Please save the date for the San Jose Chaplaincy Golf Tournament on Oct. 8th at Eagle Ridge. More info to follow.

Juan M. Reyes



This Kiwanis Crab Feed is scheduled for Friday, March 23rd...

And this MMOC Cioppino Feed to be held on Saturday, March 31st...




Results from last week's poll...

For the full scope of state and national polling by Scott Rasmussen, click on this link:

For the most recent releases, click here:



March 3rd


Our wonderful Mayor was on a local Sacramento talk show this week speaking about our pension plan. He was able to get the two DJ's all fired up by alluding that we have a "free" lifetime medical plan. He also called any labor union challenge to his ballot initiative a "bogus" legal challenge. When asked what idiots were responsible for giving us such ridiculous benefits, he pulled out the Obama playbook and blamed prior City officials. He apparently forgot that he was one of those "idiots" who voted in favor of our 3% COLA. No doubt this man has bigger political goals and will do all he can to achieve them off the backs of the labor unions.

(Tomaino) <ltomaino@sbcglobal.net>

Reed may have felt he was a sufficient distance from Bay Area radio and TV  stations that he felt free to spin the facts to fit his agenda. If the lame duck mayor does have further political aspirations, the odds seem good that the $650 million hyperbolic pension cost projection will come back and bite him in the ass.


• • • • •


March 4th

Hi Bill,
We recently moved so I attempted to do opt outs for Zaba Search and Spokeo. In the process, I found that previous opt outs were not acted on, and they are no longer honoring opt outs of any kind absent a court order. When I checked, I found both sites had every address I have lived at since the early '80s, as well as names of other relatives, etc. This appears to be a losing game. Thought you might want to check with your readers to see if the opt outs they thought they had are still in place.

(Gummow) <boca2@roadrunner.com>

Hi Bob: A Google search for "how to opt out of zabasearch com" will yield several links to a solution that should work for you and other concerned readers. Likewise with Spokeo. Just search for "how to opt out of spokeo." (Readers who have already opted out of either or both websites might want to drop Bob and e-mail.)


• • • • •


March 4th

I hope you are well. I retired in January after more than 27 years and am now busy managing elder parents and in-laws. Not quite what I expected to be doing, but I am grateful that I have the time.
I would like to join the Farsider subscription list, and I hope that over the next 6 months I will able to join the PBA and attend a meeting. I look forward to catching up with those who went before me and keep in contact with the organization as a whole.
What information do you need/want? The basics are listed below.

(Jennifer Dotzler) <jdotzler@yahoo.com>

You provided all the info we need, Jenn. Leroy and I each maintain identical Farsider rosters and you have been added to both. By now, you should have received the notification that Leroy sends out each week advising of a new Farsider after we get it posted to the PBA website. Welcome to our growing family. You are the 812th subscriber.


• • • • •

Gary Leonard sent in a link on March 3rd to an obituary published in the Sacramento Bee along with the following notation...

March 4th


I worked many cases with Phil Morris while at SJPD. He was a very good detective and a good friend.


Philip L. Morris

Beloved husband, father & grandfather Phil Morris passed away on February 25, 2012 in Chico, CA, at the age of 76. Phil was born in Ohio and graduated from Fremont High School in California. Phil worked as a deputy sheriff and detective in Santa Clara County before moving to Sacramento to work for the Department of Justice as a special agent. After retiring from the State, Phil worked as a private investigator. He enjoyed his 35-year career in law enforcement.

But what brought Phil even more joy were his family and friends. Phil was one of the true good guys. He had heart of gold and was always willing to help others. He had a great sense of humor, an infectious laugh and was quick with a smile and a wink. He will be dearly missed.   He is survived by his wife, Bonnie of Chico; his son Chris of Austin, Texas; his daughter Kim and her husband Jeff DuFour of Chico; his daughter Cathy and her husband Errin Norlie of Chico; and his 3 adored grandchildren Kristen, Jenny and Zach.

An open house celebration of his life will be held at the home of Kim and Jeff in Chico, on Saturday, March 24 from 1:00 to 4:00 pm. In lieu of flowers, the family requests that you make a donation to a charity of your choice.


• • • • •


March 5th


FYI, the SJPD Badge #259 listed on eBay did not sell. It had 11 bidders, however, they all failed to meet the reserve price. I'm sure it will come up again one day.

Jack (Baxter)

This is a screen capture (photo image) that made up the rest of Jack's message...



• • • • •


March 6th

Bill & Leroy,

I don’t know if you remember me, but I was with San Jose PD, Badge #1860, from January 1977 – March 2003, when I accepted a job as a Special Agent with the FBI.  I stayed with the FBI until December 2010, when I retired. I am currently working as a Police Officer with the Anchorage Police Department. I happened to run into Glenn Kaminsky today while he was teaching a group of new Anchorage PD FTOs.

I would like to be added to the Farsider list.  Here is my contact information:

Kevin Fryslie

We never forget a name, Kevin. Sometimes a face, but never a name. As the 813th subscriber, welcome to the Farsider Family. If Glenn is still there and you run across him again, give him our regards. If you don't see him, he will probably see this since he is one of our longtime subscribers. (Hi Glenn!)



—See the "Local News for Out-of-Towners" column below for the news articles—

March 1st — Lawsuit for Breach of Fiduciary Duty


March 2nd — Police & Fire Offers Pension Reform that Guarantees Savings


March 5th — Legislators Pursue State Audit of Chuck Reed




In chronological order, here are the pension reform articles, editorials and letters to the editor that were published in the Mercury News since we went to press last Thursday morning. The final two articles and single editorial from yesterday and today's paper tell the tale, so you might want to consider scrolling way down to the bottom of this column if you're looking for the meat...

It’s Time to Put Pension Reform on June Ballot

Editorial — Mercury News — March 2, 2012

Time has run out, and so, apparently, has the inclination for civil debate. Tuesday is the last chance for the San Jose City Council to place a reform measure on the June 6 ballot, so it needs to approve a final version of its ever-evolving pension reform proposal.

Until a few weeks ago, we clung to the Pollyanna hope that San Jose and at least some of its unions — particularly police and fire — could reach agreement on pension reform and avoid a bitter fight over the ballot measure. But time has run out.

While San Jose’s financial outlook is improving, it does not change the fact that the city’s two pension funds, laden with unfunded liabilities, are not sustainable at current benefit and cost-sharing levels. Reductions in long-term liability in the actuaries’ most recent projection are a result of pay cuts and reductions in staffing, including about 200 fewer police officers and firefighters. This has dramatically reduced levels of service; it’s no answer for employees or for residents. We can’t cut our way out of the pension trap.

The proposed measure today is magnitudes better than the overreaching first-draft put forward by Mayor Chuck Reed in May. In fact, it’s close to an alternative suggested by Councilman Don Rocha but dismissed at the time by the council majority as too timid.

The measure resets fixed pension benefits at a fair level — still greater than the private sector offers, but that’s necessary to keep San Jose competitive with other cities in recruiting talented workers. If benefits elsewhere remain higher, San Jose will have to increase salaries to compete.

That way, taxpayers will be paying for the services they’re receiving. Padding pensions pushes the burden onto future generations.

The city bears some of the responsibility for failing to reach agreement with the unions; Reed has hardly set a conciliatory tone. But last month, union leaders and their lobbyists trashed any remaining possibility of civil debate.

And we do mean trashed. They trumped up controversy over a worst-case pension estimate used by Reed last year, fired off ethics and other drama-laden complaints purely for the publicity value and falsely asserted that the years-away estimate had influenced unions’ concessions to save jobs in the current year.

What a crock.

The unions think they can reverse some of the ballot measure reforms in court.

Maybe they can, although the current proposal looks more defensible than earlier ones.

The city should plan now to expedite the resolution of inevitable court challenges.

This week, council members agreed to put off consideration of a tax or bond measure until after the June election. That was smart. Residents are not happy with closed libraries, fewer police patrols and crumbling city streets — but they know pension costs have tripled over the past decade from $73 million to $245 million out of the general fund that pays for police officers and librarians. Voters need to know that pensions are under control before they’ll agree to pay more to City Hall.

If pension reform paves the way for a revenue measure, and the economy continues to improve, San Jose will be able to rebuild its workforce and restore services without digging itself into another deficit hole. That should be everyone’s common goal.

The current proposal is magnitudes better than the overreaching first draft put forward by the mayor in May. And time has run out for union negotiations.


• • • • •

This story made the front page of last Saturday's paper. It's as close to "good news" in terms of the City's budget woes as has been seen in some time...

Glimmer of Hope in S.J.’s Budget

—No deficit forecast for next fiscal year, but leaders warn that not all is rosy—

By Tracy Seipel
Mercury News — March 3, 2012

After enduring a decade of budget deficits, San Jose finally expects a reprieve next fiscal year: no budget shortfall, and perhaps even a modest $10 million surplus.

Still, no one is breaking out the Champagne, because deficits are predicted for the two years that follow.

“We’ve been falling into a deep hole for a long time — and even if it looks like we might have finally hit bottom, we still have a long way to climb out of it,” said City Manager Debra Figone on Friday after releasing her five-year forecast.

Only a few months ago the city had expected its 11th consecutive budget deficit for the year starting July 1 — with at least a $25 million shortfall. But a few key factors have turned that around. Property and sales tax revenues are increasing, and key employee benefits will cost less than projected, including retiree health care, employee sick leave and workers’ compensation.

The latest figures could complicate Mayor Chuck Reed’s efforts to maintain momentum for a pension reform ballot measure that the council is expected to finalize Tuesday. On Friday, Reed contended that the seemingly good news does not mean those reforms are no longer needed.

“It’s good news that next year is up, but we’re not really out of the woods yet,” he said, citing pension costs that will continue to escalate and ravage the city’s budget unless they are contained through fiscal reforms and a June 5 pension reform ballot measure that would shrink retirement costs.

In fact, Figone forecasts a $22.5 million budget deficit in 2013-14, propelled by a $29.5 million increase in retirement expenses. However, the last two years of her forecast show notable surpluses, though they could be altered by a variety of reasons.

Reed said estimates suggest that employee pension costs will grow for an additional 12 to 13 years, until 2025, and “everybody should be worried about” that cost. But if the ballot measure passes, city staff members said at a Feb. 13 council study session, the city could initially save $48 million, plus additional savings from new employees being placed in a lower-cost retirement plan. Figone’s five-year budget projection does not take into account the pension reform measure or other factors.

That kind of savings, the mayor said, could help pay for the city’s $100 million annual road maintenance cost as well as increase the city’s contribution to its retirees’ health care.

“Other than that, things are wonderful,” quipped Reed, who said he expects few if any layoffs next year and hopes the 2012-13 budget can help restore some service cuts.

City officials said pension costs are estimated to grow only slightly, from $245.5 million this fiscal year to $245.8million in 2012-13. But that’s primarily due to hundreds of workers being laid off last year and employee salaries being slashed by 10 percent.

For the same reason, said Employee Relations Director Alex Gurza, an estimated $400 million in retirement costs for 2015-16 now have been reduced to closer to $300 million.

But Reed and other city officials say layoffs and pay cuts are no way to solve the city’s budget problems.

“We reduced our payroll last year by 24 percent,” Reed said. “We don’t want to do that again.”

“We want to build capacity and meet the city’s basic service needs — and be a good employer,” Budget Director Jennifer Maguire said.

With a one-year budget respite, Figone and Maguire say now is the time to stabilize the city’s costs and focus on San Jose’s fiscal reform plan, which they contend will save money and allow the city to add back employees and services.

City officials said at the Feb. 13 study session that modifying the lowest-cost medical plan for employees and retirees would save the city $14 million annually. Eliminating sick leave cash outs, where employees save their sick days over the years and then receive that accrued pay when they leave their city job, would save about $7 million annually, he said.

San Jose officials, who have been accused by unions of inflating estimated retirement costs, emphasized that the numbers released Friday comprise only a forecast. Employee unions have called the city’s pension reform measure illegal.

In advance of Tuesday’s meeting, five unions representing the city’s police officers, f irefighters and engineers and architects, among others, submitted on Friday a new set of pension cuts that they say will guarantee savings and avoid “a long, drawn-out legal battle.”

“We are elated that the budget picture is improving, but that does not negate the need for legal pension reform,” said Tom Saggau, a union strategist.

• • • • •

The article above was followed by this update on page 6B of the local section of the same (Sat.) paper...

San Jose Unions Make Last-ditch Pension Offers

—Workers offer revised concessions to head off ballot measure—

By John Woolfolk
Mercury News — March 3, 2012

Five unions representing San Jose police, firefighters and other workers offered new pension cuts late Friday just days before city leaders are set to vote on finalizing a ballot measure that would reduce the costly perk. In their revised offer, the unions say they would accept additional pay cuts to guarantee cost savings to the city if not enough volunteer for a reduced pension plan. They also offered reductions in a costly retirement health plan benefit and several other changes sought by the city.

“Today police officers and firefighters again responded to the call for legal pension reform,” said Robert Sapien, president of the San Jose Firefighters union. “Our proposal will ensure that the City will be able to count on savings, protects the taxpayers we serve and provides our members with a fair retirement benefit.”

The new concessions came as City Manager Debra Figone revised budget projections showing the city faces its first budget surplus in a decade this year, largely due to recent layoffs, pay cuts and higher tax receipts. Deficits are expected in later years as pension costs rise.

City unions have offered increasingly generous pension cuts and city leaders have softened the proposed ballot measure over months of talks. But key sticking points remain, including the unions’ assertion that the city cannot legally force its workers to pay more for their pensions if they don’t switch to a cheaper plan.

The latest union offers got a chilly reception from Mayor Chuck Reed and other top city officials. Reed and four other council members Friday issued a memorandum urging the City Council to proceed with his proposal for a pension reform measure on the June ballot, arguing only voters can adopt many of the needed changes.

A narrow council majority approved ballot language in December, but Reed wants to replace it Tuesday with milder terms to reflect employee concerns raised in mediation. The deadline for June ballot language is March 9.

“A negotiated solution alone will not solve our longterm pension problems,”Reed said in the memorandum also signed by Vice Mayor Madison Nguyen and council members Sam Liccardo, Pete Constant and Rose Herrera. “We must go to the voters to achieve lasting change and gain control of pension costs that have already cost services and city jobs.”

The unions however said they want the city to take their offer to voters instead of the proposed ballot measure.


• • • • •

Last Sunday the Mercury News tried to explain to its readers what the pension reform issue is about and what the measure would do if it appears on the June ballot and is passed...

Making Sense of San Jose’s Pension Battle

—Before Tuesday’s vote, we examine conflicting views of mayor, unions—

By John Woolfolk
Mercury News — March 4, 2012

On Tuesday, San Jose City Council members will decide whether to modify a June pension reform ballot measure that Mayor Chuck Reed says will ease the growing costs of employee retirement.

To pay those costs, San Jose has cut staffing and the services that go with it.

The modifications address some employee concerns.

City employee unions still say the measure would violate their legal rights and have accused Reed and other top city officials of exaggerating the severity of the problem.

What’s all the fuss about and how are voters supposed to sort out the conflicting perspectives? Here’s a pension primer to help make sense of it all.

Question: How do pensions work?

Answer: Pensions are employer-provided benefits that pay a regular monthly sum in retirement, typically a percentage of salary for every year worked. While they remain a standard government perk, private employers have been replacing pensions with 401(k) savings plans in which the employer may contribute toward the employee’s retirement but doesn’t promise a fixed benefit.

Question: How are those costs estimated?

Answer: Trustees who oversee pension funds hire actuaries who recommend how much the employer and workers must set aside out of each paycheck to cover the future cost of the lifetime retirement benefit. The trustees regularly review those contributions to determine whether their assumptions match actual experience.

Question: So what’s the problem?

Answer: San Jose and many other government employers have been underestimating pension costs and overestimating investment returns. Since the 1990s they have boosted benefits while putting less money into the pension funds than will be needed to cover employee retirement costs. A September 2010 San Jose audit found total pension benefit payments had grown sevenfold over 20 years and exceeded contributions to the retirement funds for a decade. It said the city’s $4 billion pension plans were short some $2 billion needed to cover future benefits. Since then, pension trustees have adopted more conservative assumptions and sharply increased how much the city is paying toward the pension fund.

Question: Employee unions say the mayor and city overstated the pension problem and hyped a bogus assertion that pension costs could hit $650 million in a few years. Is it possible the pension problem isn’t so bad?

Answer: Estimates of future costs guide trustees in overseeing pension funds and help city leaders plan for cost increases in their budget. But those projections can vary greatly depending on the assumptions used to make them, which change over time. The city projected last year that annual costs to the city budget could reach $400 million; now it expects a total closer to $300 million. Actuaries largely attributed the reduction to the recent layoffs, higher investment returns and 10 percent pay cuts. But while projected future costs have dropped some, the city still faces a growing retirement bill that already has risen from $73 million a decade ago to $245 million this year. Unions argue the higher costs are being driven by assumptions they consider overly conservative.

Question: That’s bad, but not $650 million bad. So why did the city cite the higher figure if it appears unrealistic?

Answer: The figure was an estimate the city retirement director offered at a public meeting a year ago when asked how much higher city pension costs could rise above official projections under more conservative assumptions. Though he’s since backed away from that estimate, others who studied the city’s retirement system last year made similar gloomy forecasts. Unions said the city should have acknowledged months earlier that layoffs and pay cuts would shrink the future cost projections, but also acknowledge that higher projections are possible under more conservative assumptions.

Question: Still, if San Jose’s future pension bill is now expected to be lower than either the gloomy $650 million figure or the $400 million official projection, doesn’t that show the problem’s not as big as once thought?

Answer: Effectively, San Jose has brought down its future pension bill by shrinking its workforce. The city has shed more than 2,000 jobs in the past decade — more than 1,200 of those just in the past two years, leaving a work force of 5,400. San Jose now has almost 200 fewer police officers and firefighters than it did two years ago. The city currently supports more retirees and their survivors through its pension system than it has employees paying into it. And while the city has cut employee pay 10 percent, employee costs overall have grown as the city pays higher rates for pensions. In the past couple years, the percentage of payroll San Jose pays for retirement has more than doubled for officers and firefighters and grown by a third for other workers. The work force likely will continue to shrink unless pension costs grow more slowly or the city gains more revenue.

Question: Isn’t the pension problem mostly driven by the 2008 market crash, and won’t it ease as the economy recovers?

Answer: The market crash worsened what already was a problem. The city was paying out more in benefits than it put into the pension funds for many years before markets took a dive late in 2008. San Jose’s pension funds, like many others, lost about a quarter of their value in the 2008 market crash. Because the funds had assumed annual returns of 8 percent or more, the city has to make up the roughly $1 billion in market losses over time.

Question: How did things get so out of whack, and who can we scream at for messing up?

Answer: Many had a hand in the city’s pension failure. State leaders approved more generous retirement packages for state workers in the late 1990s, prompting local employee unions to demand similar increases. San Jose police and firefighters enjoy voter-approved arbitration rights that weakened the city’s ability to rebuff compensation demands. The pension system until recently was overseen by city leaders, employees and retiree trustees with clear conflicts of interest and little background in financial management.

Question: What would the mayor’s pension reform ballot measure do?

A Employees hired in the future would have a less costly retirement plan, which could combine a 401(k)-type plan and Social Security with a smaller pension that would have higher retirement ages and lower cost-of-living increases. The city also would increase current workers’ contributions toward their pensions unless they switch to a cheaper plan for their remaining years on the job. It also would make changes to disability retirement and allow the city to suspend cost-of- living raises for current retirees if the city declares a fiscal emergency.

Question: Why didn’t the city negotiate pension changes with employees instead of going to the ballot?

Answer: San Jose officials spent months negotiating with employee unions on pension changes, and both sides moved closer together during the process. City leaders have softened the ballot measure in response to union criticism. They reduced the additional amounts current workers would have to pay toward their pensions if they don’t sign up for a cheaper plan, made the retirement plan for new hires a bit more generous and backed away from cost-of-living cuts to retirees. Unions have made substantial concession offers. Police and firefighters, for example, offered that new workers could have the same pension plan the city had offered in the early 1990s before a series of enhancements. But key sticking points remain, including the ability of the city to require current workers to pay up to twice as much toward their pensions.

Question: Are there alternatives?

Answer: The mayor has cited Vallejo’s 2008 bankruptcy as a grim alternative to his pension reforms, though it’s unclear how realistic that is. Stockton is flirting with a bankruptcy filing in part because of pension costs. San Jose could seek further pay cuts from employees, but with their salaries already slashed 10 percent that may be unrealistic. The city could raise taxes, and the mayor and City Council are exploring several possible revenue measures to put before voters later this year. But that may not be enough to solve the problem. The quarter-cent sales tax that preliminary polling suggests is most likely to win voter approval would raise $35 million a year, while the annual retirement bill is expected to rise at least $50 million in coming years. The city could sell pension obligation bonds, but critics liken the practice to paying a mortgage with a credit card and say it will saddle tomorrow’s residents with the costs of today’s workforce. The city could outsource more work, as it has already done with janitorial work, graffiti abatement and some park maintenance. The city also could muddle along indefinitely with a smaller staff and fewer services.


• • • • •

Don't read this column that was also in last Sunday's Mercury News if you are easily pissed. It was authored by Daniel Borenstein, a columnist and editorial writer for the Contra Costa Times, which is owned by the Bay Area News Group that also owns the Mercury News. It doesn't take a dyed-in-the-wool conspiracy theorist to suspect that the Merc brought in this "big gun" to help convince the paper's readers that San Jose's public employees are the bad guys and gals in this drama about pension reform. But to be fair, he's also tough on California's public employees as you will see if you click on this link:

Pensions a Likely Train Wreck for S.J.

By Daniel Borenstein
Contra Costa Times columnist and editorial writer


Recent San Jose actuarial reports show $3.5 billion of city debt for underfunded pension and retiree health benefits — a shortfall that works out to about $11,000 for every household in the city.

Yet, as Mayor Chuck Reed proposes substantive pension reform, workers and a local television reporter are hyperventilating about irrelevant numbers that distract from the ballooning debt. If not for major layoffs and salary cuts last year, the shortfall would be much worse. It would also be much larger if the city used more realistic investment earnings assumptions rather than relying on overly optimistic forecasts.

Nevertheless, the calculations show the city’s retirement programs combined have only 56 percent of the funds they should. Put another way, the unfunded liability equals about eight years of city payroll.

To understand what’s going on here, keep in mind that employees earn additional future retirement benefits for each year that they work along with their salaries. So the city and its workers should invest enough money annually to cover the future costs of those newly earned benefits.

The city has three problems: First, the amount that should be set aside for those newly earned benefits has increased. Second, even that greater amount isn’t enough because the payment calculation relies on those optimistic investment assumptions. Third, past reliance on unrealistic assumptions, retroactive benefit increases and actuarial changes have caught up with the city, leaving it with huge unfunded liabilities for pensions. As for retiree health benefits, only small amounts have been set aside for future benefits.

The resulting debts are treated like mortgages, with annual payments spread over as much as 30 years, thereby passing costs to the next generation. The city must pay off the entire pension shortfall; workers have no obligation.

For retiree health, workers make a small contribution toward the debt.

The benefits driving this are:

• Retiree health care. The city provides free lifetime insurance to workers who retire from San Jose after 15 or more years of service. Spouses and dependents are also covered. The plans are only 9 percent funded with a $1.9 billion shortfall.

• Pensions. The plans are 74 percent funded with a $1.6 billion shortfall. Pension benefits are based on age at retirement, top annual salary and years on the job. Retired firefighters and police who worked 26 to 30 years are collecting an average $92,900 a year.

Retirees from other departments with the same experience average $60,432 a year.

While city workers contribute to the pension and retiree health care plans through payroll deductions of about 12 to 19 percent of their salaries, a much larger burden falls on the city.

For police and fire, the city expects to pay 66 cents additional cost for every dollar of payroll in the upcoming 2012-13 fiscal year.

For other workers, the city will pay 52 cents. That works out to a total of about $251 million for the year, a figure expected to rise to $320 million by 2015-16.

Before the staff reductions and pay cuts implemented last year, the city was looking at a tab of about $400 million for 2015-16. The union and NBC Bay Area furor focuses on past comments by the mayor and retirement system director that the number might be larger than $400 million. In fact, it probably should have been much more, a point the unions and the reporter ignore.

The retirement system forecasts hinge on investment assumptions of 7.5 percent annual returns, which they have a less than a fifty-fifty chance of meeting. Using more realistic assumptions, the original $400 million forecast and the current $319 million projection would increase significantly.

Moreover, the unions and NBC miss the bigger point: These amounts include only a small payment toward the unfunded liability, a debt for work that has already been completed.

For pensions, the city is making the minimum payment on its mortgage, leaving most of the balance for future generations. For retiree health, it’s worse: Only part of the minimum payment is being covered. This is a potential train wreck left for future generations to clean up. The mayor deserves credit for trying to avert a disaster.


• • • • •

Assemblyman Jim Beall, who was supportive of Police and Fire when he was a San Jose councilman, has jumped into the fray of the pension reform issue. This story was part of Monday's paper...

Audit of Pension Costs Urged

—Lawmakers reveal plans amid mounting criticism of mayor’s push for reform—

By Howard Mintz
Mercury News — March 5, 2012

Stepping into the conflict over the scope of San Jose’s public employee pension problems, a group of state lawmakers on Monday plan to reveal a campaign for a state legislative audit of the city’s finances and pension debts.

Led by Assemblyman Jim Beall, a group of seven South Bay legislators will ask the Joint Legislative Audit Committee to conduct the audit, saying it is needed to resolve a heated debate over Mayor Chuck Reed’s projections of the city’s pension woes.


Assemblyman Jim Beall,
leading effort to seek audit
of city's pension debt.

The audit request comes on the eve of a City Council meeting Tuesday to consider whether to modify a June pension reform ballot measure that Reed is pushing to ease the growing costs of employee retirement. Employee unions have criticized the mayor for his estimate of $650 million in future pension costs, saying he inflated the figure by hundreds of millions of dollars to solidify his political arguments.

“This request’s purpose is to get a neutral and independent evaluation of the city’s pension costs, which has become a source of contention,” Beall said. “I hope this audit will produce solid information that both sides at the table can accept to, perhaps, develop new strategies.”

State Sens. Elaine Alquist, D-San Jose, and Ellen Corbett, a San Leandro Democrat and Senate majority leader, have joined in the audit request, along with Assembly members Luis Alejo, Paul Fong, Rich Gordon and Bob Wieckowski. Last week, San Jose City Manager Debra Figone told a City Council committee that her office will prepare a memo by the end of March outlining the origins of the $650 million estimate, which Reed has called a worst-case scenario for pension costs by 2015. Five council members backed by employee unions had previously demanded explanations for the estimate of the city’s pension obligations.

• • • • •

Just hours before the City Council voted on the pension reform ballot measure the Mercury News published this editorial...

Pension Reform Vote Can’t Wait Until November

Editorial — Mercury News, March 6, 2012

The prelude to Tuesday’s San Jose City Council vote on a pension reform ballot measure has devolved into a three-ring circus — with the clown imported from Sacramento, where Assemblyman Jim Beall wants a legislative committee to audit San Jose’s pension system for purely political purposes.

Meanwhile, unions continued to suggest reform alternatives that would not work, and council members opposing the measure lined up their “Of course we all want reform, but ... ” arguments.

Enough. Tuesday is the last chance to put a measure on the June ballot. The council majority must move ahead. Waiting until November would leave too little time to resolve disputes in court and implement the cost savings in 2013.

This week’s performances were nothing compared to the union-orchestrated extravaganza last month over Mayor Chuck Reed’s use of a worst case pension cost estimate last year. But Beall gave it his best shot Monday. The former San Jose councilman blustered in front of City Hall, showing that either he doesn’t understand how San Jose pension forecasts are developed and utilized, or he has completely sold out to unions.

Or both.

About a year ago the city retirement director, responding to a council question, gave a worst case rough estimate of pension costs that Reed picked up on. Even if the number were totally fabricated, it would change nothing about City Council decisions since. Independent actuaries and San Jose’s two pension boards produce and approve the official cost projections on which the City Council has based every single action on pensions, and on which it will base Tuesday’s decision.

Reed and some council members are trying to succeed where Sacramento consistently fails. They are working on long-range fiscal reforms so the city can weather future downturns, provide services more economically and ensure that costs are paid by people benefiting from them, not pushed onto future generations like the state pension system.

Columnist Dan Borenstein calculates the unfunded liability for San Jose’s employee pension plans at $11,000 per city household.

Significantly lower pension costs for the current year are a result not of bad estimates but of last year’s layoffs, including police officers, and corresponding service cuts, from shuttered libraries to scaled-back anti-gang work. San Jose needs to restore those and other services. If it does not reform pensions before it starts rehiring, then the bills will just shoot back up.

The ballot measure is imperfect. It includes an opt-in provision for existing employees, something unions first proposed but the Internal Revenue Service has yet to approve. We believe it will stand up. Some object to the provision that voters have to approve any future increase in benefits — but that’s how San Francisco, that well-known anti-labor bastion, does it.

San Jose workers have taken pay cuts and gone years without raises. They deserve better. The city will have to offer better pay in the future to compete with other employers. But future increases should be in salaries. Workers can decide to save some of it for retirement on top of their pensions, or not.

Council members Rose Herrera, Sam Liccardo, Madison Nguyen, Pete Constant and Pierluigi Oliverio are expected to join the mayor in forging ahead with reform Tuesday. We hope others join them.

Enough. Tuesday is the last chance to put a measure on the June ballot. The council majority must move ahead.

November would be too late.

Did this editorial actually refer to former San Jose Councilman and current Assemblyman Jim Beall as a "clown from Sacramento?" Had a conservative newspaper run an editorial that referred to an elected official as a "clown," the Mercury News would be all over it like stink on a block of Limburger cheese.


• • • • •

It's hardly a coincidence that the paper selected this letter to the editor to be positioned next to the editorial above...

Audit San Jose? What About Your Own House?

Letter to the Editor — Mercury News — March 6, 2012

Very interesting. State legislators, led by Assemblyman Jim Beall, want to audit the city of San Jose on its pension costs.

This independent look coming from legislators that can’t even get their own budget problems solved?

Seems to me that they ought to concentrate on how to get their own house in order.

Carl E. Cookson, San Jose

• • • • •

Perhaps Mayor Reed and State Assemblyman Jim Beall should don some rain gear as it looks like they are engaged in a pissing match. On the front page of the local section of the same (March 6th) paper was this article...

Mayor Fires Back Against Calls for City Audit

By Mark Gomez <mgomez@mercurynews.com>
Mercury News — March 6, 2012

Mayor Chuck Reed said a call Monday for an audit of the city’s finances and pension costs is another attempt by unions and their political allies to derail a pension reform measure proposed for the June ballot.

The request for an audit came from seven local state legislators just as the City Council is scheduled Tuesday to vote on revised ballot wording for the measure, underscoring the high stakes for the city government and its employees.

“Our city hall unions know very well that there is strong voter support for pension reform,” Reed said. “They’re doing everything they can to keep it off the ballot. And they have a lot of friends in the state Legislature. There’s no secret about that.”

During a press conference Monday morning outside City Hall, Assemblyman Jim Beall said he and six other local legislators are asking the state auditor to look at the mayor’s worstcase projection that escalating pension costs could reach $650 million a year. Unions allege Reed’s estimate is inflated by hundreds of millions of dollars.

The legislators are also asking a state audit committee to review the city’s operating budget for the past three fiscal years and all actuarial reports projecting pension obligations.

The request for the audit was signed by Beall and state Sens. Elaine Alquist and Ellen Corbett and Assembly members Luis Alejo, Paul Fong, Richard Gordon and Bob Wieckowski, the only other of the seven to attend the press conference.

If the audit committee approves the audit, it will then vote whether to give it priority status.

The pension predicament in San Jose is very similar to several other cities in California, Beall said.

When asked about the San Jose ballot measure, Beall said the city should “hold off until state laws and pension reform efforts are conducted.” He also said the state is considering several bills that could affect city pensions. He added that California cities fall under a 1937 Pension Act and thus are governed by state laws. But after San Jose officials disputed that, Beall later said he misspoke and that only county pension systems are governed by that law.

Reed called the move by state legislators “one of many efforts to try to get us to not to ask the voters to vote on this in June.”

Nonetheless, Reed said the city “would not object to an audit of the city’s pension obligations that is fair and objective and follows nationally recognized government auditing standards.” Jim Unland, president of the San Jose Police Officers Association, said his group welcomes the audit.

“We’ve been suspicious of this number of $650 million for about a year now,” Unland said. “Is that number a professional staff estimate, or a guesstimate?”

The mayor’s office projects the pension reform will save taxpayers “hundreds of millions of dollars” over the next 10 years.

Annual pension costs in San Jose have tripled over the past decade from $73 million to $245 million out of the general fund that pays for police officers and librarians, according to city officials.

In December, a divided council approved a pension reform measure for the June election, but held off sending it to the Santa Clara County Registrar of Voters to allow for changes based on mediation talks with workers.

Since then, there have been 20 mediation sessions with city officials and San Jose’s 11 unions, and the language on the ballot reform has changed seven times “in response to things we heard from the unions,” said Michelle McGurk, a senior policy adviser and spokesperson for Reed.

The city must submit the language by March 9 to meet the deadline for the June 5 primary election.

Under ballot wording that the council will consider Tuesday, new city employees would pay half of the cost of their retirement benefits in a lower-cost plan, according to the mayor’s office. Current employees would also have the option to choose a lower cost plan and avoid paying higher costs.

The ballot measure also would reform disability retirement rules to prevent abuses, eliminate bonus payments to retirees, and require voter approval for any future retirement benefit increases.

“We have severe needs in the city that are not being met,” Councilman Sam Liccardo said. “We are not going to meet them by paying pensions and retirement benefits that nobody can reasonably afford.”


• • • • •

As nearly all of you know by now, Mayor Reed's pension reform measure will be headed to the June ballot, and it doesn't take a mind reader to realize it will pass by a vast majority of the voters. Here's the story of Tuesday's 8 to 3 City Council vote from yesterday's (Wed.) paper.

Pension Fight Heads to Ballot

—Despite union pleas, council advances measure to give voters say in cutting benefit—

By John Woolfolk
Mercury News — March 7, 2012

After years of cutting budgets and months of postponing a tough vote, the San Jose City Council on Tuesday put a measure on the June ballot that would trim city worker pensions whose ballooning costs have devoured funding for city services.

The 8-3 vote after three hours of debate and testimony was a key victory for Mayor Chuck Reed, who has made pension reform a centerpiece of his administration. It promises to make the city a focal point in the national push for pension reform, heading into what is certain to be an expensive and bitter campaign.

“The time has come for the council to take action,” said Reed, who has spent years working to change the pension system. “Today is the time to act and give the people of San Jose a chance to decide.”

Councilmen Ash Kalra, Kansen Chu and Xavier Campos were opposed, siding with city labor unions who argued the city must negotiate benefit changes with its workers and that a ballot measure would be needlessly divisive and legally risky.

“I realize the pension system is broken and we need to fix it,” Chu said. “The question for me is how harsh should the pendulum swing? We’re dealing with human beings and their lives, not just raw numbers.”

But the surprisingly wide margin for approval on an issue that has divided the council reflected a sense among the city’s elected leaders of voter anger over a decade of cutbacks in city services — from police and fire protection to libraries — to cover rising costs for benefits more generous than those offered by private employers.

“My first obligation is to my constituents,” said Councilwoman Nancy Pyle, who argued pension reform will be key in seeking voter approval this year for a tax measure. “They have spoken, long and hard.”

The vote came amid growing outcry from unionized city workers who argued it would be illegal and who have sought to sow doubt in recent weeks about the city’s assertions about the pension problem. Five unions representing city police, firefighters and other workers said in a statement after the vote that “the mayor and his supporters scored some political points today, but only time will tell what the ultimate cost to our city will be.”

A firefighter speaks out against the pension
proposal at the City Council meeting.

Reed’s pension reform proposal has drawn national interest, with San Jose among only a few California cities moving to give voters a say over growing costs of public employee retirement benefits that have become a concern throughout the country.

San Diego also is seeking a June ballot measure to shrink pension costs. San Francisco voters in the fall approved the milder of two pension reform measures on the ballot.

The issue drew a capacity crowd to San Jose’s council chamber Tuesday. Most were city union members and their supporters.

“My union and I personally have been scapegoated,” said Yolanda Cruz, president of the city’s largest employee union, whose workers include librarians. “Imagine how the past year could have been if the city manager and city leaders had worked with employees to find a negotiated solution.”

Reed noted that the proposed ballot measure has been softened substantially in more than a half-dozen revisions to reflect eight months of talks and mediation with city unions. Tuesday’s vote was about replacing language the council had approved in December with milder terms to address concerns raised in mediation. Friday is the deadline for submitting language to the registrar of voters for the June 5 ballot.

City workers had offered pension concessions in negotiations. On Friday, police, firefighters and three other unions made a fresh proposal that called for employees to pay more if they don’t switch to cheaper retirement plans.

But city leaders have argued the union offers are insufficient. Councilman Sam Liccardo said the latest offers fell short because they didn’t require workers to share the cost of unfunded liabilities that can build up in the pension system when expenses exceed assumptions. San Jose’s pension system now has billions of dollars in unfunded liabilities that currently must be paid solely by the city and its taxpayers.

Reed and other council members said they were confident the reforms called for in the proposed ballot measure would survive the inevitable union legal challenge. He argued much of what the measure calls for — reduced benefits for new hires, making current workers pay more for their pensions — has been done in scores of other cities.

“What we are doing is not unusual,” Reed said. “I’m quite comfortable with our legal position.”

Some residents, business owners and even public officials urged the council to move ahead with the ballot measure. Jeff Cristina, director of Environmental Services at GreenWaste Recovery in San Jose, noted the sharp rise in city retirement costs, from $73 million to $245 million in the past decade.

“That shows the true problem,” Cristina said. “Let the people decide what happens to their city.”

County Assessor Larry Stone, noting he’s a career public employee, also urged support for the pension reform measure.

“We need significant reform, not just incremental reform,” Stone said. “Why? Because the current system is unsustainable.”

• • • • •

Not surprisingly, columnist Scot Herhold offered his two-cents about the council meeting vote that will place the pension reform measure on the June ballot. This is also from yesterday's (Wed.) paper...

Fact: Politics and Money Rule the Day

By Scott Herhold <sherhold@mercurynews.com>
Mercury News — March 7, 2012

The union folks wore badges that said “Facts Matter,” and everyone summoned their own facts Tuesday inside the San Jose City Council chamber.

Facts about unsustainable costs.

Facts about erroneous projections. Facts about a pension that no longer covers the rent for a disabled woman.

But as much as people saluted them, it wasn’t the proffered facts alone that swayed the outcome when the council voted 8-3 to put Mayor Chuck Reed’s pension reform on the June ballot. The theater on the dais featured two more primal themes: money and politics.

It might have been the most historic council meeting in my memory, certainly of the past decade. What was happening was essentially a wresting of expectations from employees who have enjoyed a sweeter deal than the city can afford.

As Councilman Sam Liccardo pointed out, this wasn’t the fault of the employees. Unions exist to bargain for better deals for their workers. And over the years, the council has generously acceded, granting cops and firefighters 90 percent pensions after 30 years.

Once upon a time, when San Jose flattered itself that it was the capital of Silicon Valley, that might have seemed affordable. It no longer is. And so the council was voting for a measure that would impose bigger burdens on employees.

A loud shrug

The rest of us might shrug: Few people in the valley have assured pensions.

If we have anything, it’s a 401(k) that waxes or falls with the market. The concept of an assured 90 percent pension, even 75 percent, strikes as an impossible gift from the Tooth Fairy.

For a cop retiring with a $90,000 pension, a little less than the average, the assured cost-of-living increases mean the city will spend about $1.2 million over a decade just on his retirement. Generosity like that makes it tough to pave roads or keep libraries open.

And yet those facts didn’t convince the audience Tuesday.

The hearing attracted folks who will have to pay more for their pensions. It brought in people who see their automatic 3 percent cost-of-living increases shrinking.

“This is the wrong action to take,” said Bob Leininger, a spokesman for retired employees. “We have had discussion and dialogue. If you take this vote today, that stops.”

In a word, the city employees and retirees could grasp the bleak threat of losing promised money. It was no surprise to hear the occasional catcall or the burst of applause for labor guru Bob Brownstein’s denunciation of the mayor’s plan.

Gimme Novocain

All this thrust the council members into the position of amateur dentists trying to perform a root canal. Trust me: Council members would prefer to handle almost any other topic.

Airport bonds, sewage loads and rainfall projections would offer blessed relief.

So before the vote came the necessary theater: Both council members Don Rocha and Nancy Pyle, who voted to put the measure on the ballot, denounced the demonization of city employees.

(In fact, there was no demonization I heard of employees Tuesday: But if you faced losing pay and benefits, you might feel demonized, too).

In the end, the council members are working politicians.

They know what their constituents think. They have probably seen polling. And voting against putting something on the ballot — asking the people to decide — is always risky. Those are the facts that commanded the result on Tuesday.


• • • • •

This story from the front page of today's (Mar. 8th) Local Section seems to have the editorial board of the Mercury News seeing red, as you will read in the editorial that follows. The same color may also apply to the eyes of Mayor Reed and his City Manager...

State Legislators Order San Jose Pension Audit

—City officials fear review is motivated by Democratic lawmakers’ ties to unions—

By John Woolfolk <jwoolfolk@mercurynews.com>
Mercury News — March 8, 2012

The state will audit San Jose’s finances amid employee unions’ accusations that city officials overstated the cost of the pension system to build support for a June ballot measure reducing retirement benefits.

The Joint Legislative Audit Committee on Wednesday approved the state audit, requested by seven Democratic lawmakers, on a bipartisan 10-3 vote. The committee also directed the auditor to give it priority status on a 12-1 vote. Committee member Chris Norby, R-Fullerton, did not vote.

“My role as chairman is to ensure that we’re doing everything we possibly can to protect our taxpayers’ money,” said Assemblyman Ricardo Lara, D-South Gate. “In this unique situation with the city of San Jose, we have to make sure the numbers the city is using are actually correct. So I supported the audit along with a number of elected officials who represent the San Jose area. We got bipartisan support, which goes to show you it’s not something we are taking lightly here in Sacramento.”

San Jose officials questioned the need for the state audit. They noted the city’s retirement system already has been extensively audited, and cited concerns that further state review — urged by lawmakers backed by public employee unions — could be politically motivated.

“As long as it’s not a politically slanted inquiry, that’s fine,” Mayor Chuck Reed said. “The facts are the facts.”

San Jose City Manager Debra Figone said that auditors regularly review the certified annual financial reports on the city’s finances and its independently governed and pension plans. In addition, the pension funds are examined by actuaries and have been independently reviewed in a 2010 city audit, a 2010 civil grand jury, a 2011 report by the state’s Little Hoover Commission and a 2011 report by the Stanford Institute for Economic Policy Research.

“We believe our retirement costs have been thoroughly vetted, both internally and externally,” Figone said in a letter Tuesday to the committee. “If a state audit were to be conducted, we respectfully ask that this not be done for political purposes or as an attempt to delay or distract from the real issues.”

Lara said the audit will cost state taxpayers $189,000 and added that it’s “not unusual” for the state auditor to examine local finances. The state auditor is currently examining the city of Vernon and Salinas Valley Memorial Hospital. The priority audit is expected to begin “in a week or so,” he said, and be completed in four to six months.

Voting against the state audit were Sen. Bob Dutton, R-Riverside; Assemblyman Tim Donnelly, R-Hesperia; and Assemblyman Cameron Smyth, R-Santa Clarita. Sens. Joel Anderson, R-Temecula, and Doug La Malfa, R-Rocklin, joined the Democrats in supporting the state audit.

Assembly members Jim Beall, D-San Jose; Luis Alejo, D-Salinas; Paul Fong, D-Mountain View; Rich Gordon, D-Los Altos; and Bob Wieckowski, D-Fremont, as well as state Sens. Elaine Alquist, D-San Jose, and Ellen Corbett, D-San Leandro, requested the audit in a letter over the weekend.

In the request, the group said it sought the audit to ensure San Jose was “working from commonly accepted budget and pension obligations figures” as the city “and all its constituents work to develop the 2012-13 budget, negotiate employee contracts, and address pension benefits for employees.”

The group also asked state auditors to focus on differing pension cost projections for 2015-16, ranging from $300 million to $650 million, which have become a source of debate. The higher figure was a rough estimate offered by the city retirement director at a meeting a year ago using pessimistic assumptions.

City officials said current projections of about $309million reflect reductions in payroll from layoffs and 10-percent pay cuts made last year to ward off a budget deficit. The city now projects a surplus in the next budget year, although deficits are expected after that as pension costs continue to rise.

San Jose’s employee retirement bill has more than tripled in a decade from $73 million to $245 million.

The audit committee vote came a day after the San Jose City Council agreed to put a measure on the June ballot that would reduce pensions for new hires and make current employees pay more toward the benefit if they don’t switch to a cheaper plan.

Beall, a former San Jose councilman, said in a statement that he supports pension reform, but, he added, “it’s imperative the city obtain clear facts as it goes forward.”

“This audit accomplishes that and committee members — Republicans and Democrats — recognized that,” Beall continued in the statement. “The audit will help guide us with drafting comprehensive pension reform legislation. Today’s vote also reflects the Legislature’s interest in the state becoming better watchdogs.”


• • • • •

We are close to the end of this week's pension coverage as far as the Farsider is concerned. All that's left is this editorial and two letters to the editor from the op/ed page of today's paper...

Voters Now Have Time to Sort Out Pension Facts

Editorial — Mercury News — March 8, 2012

Speakers at the pension debate at the San Jose City Council meeting Tuesday appeared to come from different factual universes — not just those in the audience, but also members of the council.

Some see the pension reform measure on the June ballot as demonizing workers. Others see it as a way to keep the pension plans solvent while restoring services that have been cut beyond what’s healthy for city neighborhoods. It is a stark divide.

Fortunately, voters have until June to sort through the rhetoric and the numbers — which aren’t off-the-cuff estimates, but official projections done by independent actuaries and approved by the city’s independent pension boards. Don’t wait for that politically motivated state audit of San Jose pensions that legislators pushed through Wednesday, however; it won’t be finished before the June election. Here’s a thought: How about just giving San Jose the $189,000 that the audit will cost so it can hire back a laid-off police officer or two?

Most city union leaders now say some pension reform is needed, a tacit admission that the current plans are not sustainable. The pension bill for the coming budget year is less than expected, but that’s because of all the layoffs, eliminated positions and pay cuts since the most recent analysis, not because happy times are here again. Even with current employment levels, actuaries say the plan has a long term unfunded liability of $3.5 billion.

Until recently, we thought that some city unions were earnestly trying to reach agreement on reform. Then last month, they turned from negotiation to street theater to discredit Mayor Chuck Reed’s reform proposal. At this point, voters need to act.

Reed’s initial proposal for reforms last summer was extreme and largely illegal.

The plan that passed with an 8-3 vote Tuesday is far more reasonable and more likely to hold up in court. Some provisions may need tinkering down the road, but that’s OK. San Francisco requires a public vote to change pension provisions, and it manages to update its plans.

The council’s priority at this point should be implementing a second-tier, reduced retirement plan for new hires. Even with the cutbacks, some key positions are being filled, and new employees still go into the existing plans. The city has reached impasse with its unions on the second tier, according to Employee Relations Director Alex Gurza. Police and fire unions are headed to arbitration, but for non-safety workers, the council could implement a plan at any time. Setting a plan for new hires will not affect existing employees or retirees.

Contrary to various speakers Tuesday, the ballot measure will not “take away” anybody’s pension. It will scale back some promises, but those promises were made at a time when prosperity seemed boundless. Today, many taxpayers are reeling from home foreclosures, loss of 401(k) investments and loss of jobs — or, if they’ve kept their jobs, lowered compensation.

Everybody longs for the heady days at the turn of the century, but few can insist that their incomes and benefits must go untouched regardless of what happens.

It is not demonizing or blaming city workers to ask that they adjust their expectations.

Don’t wait for that politically motivated state audit of San Jose pensions that legislators pushed through Wednesday. It won’t be done in time.

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Ending this "Local News for Out-of-Towners" column marathon were these two letters to the editor that appeared beside the editorial above...

City Makes Right Call on Pension Reform

Letter to the Editor — Mercury News — March 8, 2012

Kudos to our mayor and the seven City Council members who voted for moving forward on pension reform. Our city cannot continue awarding lush retirement packages to its employees while cutting essential services.

Razzies to Assemblyman Jim Beall and his Sacramento cohorts who have chosen to carry water for the unions.

Hopefully, voters will remember this when choosing the next state senator to represent most of San Jose.

Mayor Chuck Reed’s highend projection of $650 million is irrelevant. Retirement contributions from the general fund increased by more than $170 million over the past 10 years, while employment has fallen significantly.

Fewer city employees receive much more, while we residents receive substantially less. It is time for the pendulum to swing back toward the center.

Pat Waite, San Jose


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Outrage Over City Pensions is Misplaced

Letter to the Editor — Mercury News — March 8, 2012

I really wish people would stop calling deferred compensation plans a “benefit” to workers as if somehow a pension is categorically different from other forms of pre-negotiated entitled compensation, such as salary, wage, vacation or health care.

The outrage directed at public employees because compensation in the public sector seems more generous than in the private sector is misplaced. It used to be that public workers’ retirement plans made up for their lower wages. What’s been happening to wages in the private sector to make city employees’ compensation seem lavish in comparison? The outrage private employees have should be directed at their employer for lowering their wages in times of record profits, at themselves for buying into corporate/ conservative rhetoric that unions hinder economic growth and toward those who showed incompetence in directing the city’s retirement funds.

If private-sector employees are jealous of compensation packages enjoyed by union workers, why don’t they work to make their lives better through collective bargaining instead trying to make public employees’ lives worse?

Janel Flemmer, Campbell

Final Note: Look on the bright side. Had our pensions been based on 401(k)'s instead of our own Police and Fire retirement plan, many of us might well be living in this community today...




Last Sunday's "Internal Affairs" column in the Mercury News seems to have put to bed a rumor about a family tie between Mayor Reed and the paper's editorial board. We've heard the rumor over the past few weeks, but didn't pass it along in the Farsider because we were unable to confirm or deny it. This "IA" column explains...

Newspaper’s ‘Ties’ to Reed are Tenuous at Best

Internal Affairs column — Mercury News — March 4, 2012

You may have heard that lots of San Jose cops, firefighters and other workers have cooked up a new conspiracy theory behind what they claim is our paper’s soft coverage of Mayor Chuck Reed — whom they see as Satan himself for his effort to make their generous pensions less generous. The mayor’s sister, they proclaim, is married to a top Mercury News executive!

Their facts and math are no better aligned here than with their pensions.

Reed’s sister, Sandy, is married to former Merc executive editor Bob Ingle .

But Ingle left the Mercury News in 1999, when it was owned by now-defunct Knight Ridder. Reed wasn’t even elected to the City Council until the following year. By the time Reed became mayor in 2007, the Mercury News had been sold by its investors and now is owned by MediaNews Group.

Current Publisher Mac Tully and Executive Editor Dave Butler, both installed by the new company, never worked with Ingle and have no family ties to him or the mayor. Few of the Merc’s remaining staff would even recognize Ingle.

Tully insists the paper’s coverage has been fair: “I doubt Mayor Reed thinks we’ve been unfairly kind to him — which means if neither side feels we’re being overly favorable to them that we’re probably doing our job correctly.”

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Internal Affairs is an offbeat look at state and local politics. This week’s items were written by Tracy Seipel, Scott Herhold and Lisa Fernandez. Send tips to <internalaffairs@mercurynews>.



The facts behind the legends, information and
misinformation that has or may show up in your inbox

Fact or fiction: A boy left his bike chained to a tree
when he went off to war in 1914. He never returned,
leaving the tree no choice but to grow around the bike?

New Articles

• Phishing scam poses as e-mail notification from Intuit confirming a software order.

• Photograph purportedly shows a tree that grew around a bicycle left behind by a boy who went off to war.

• Image purportedly captures a bear seconds before it mauled photographer Michio Hoshino to death.

• Are drug dealers selling colored and flavored crystal methamphetamine known as "Strawberry Quick?"

• Photographs purportedly show a spider devouring a snake caught in its web.

• The etymology of the phrase 'another kick at the cat.'

• Pranksters affix a license plate stolen from speed trap camera van to their vehicle.

• Don't forget to visit our Daily Snopes page for a collection of odd news stories from around the world!

Worth a Second Look

• Did a teenager whose mother died receive a government check mailed to "Mrs. Passed Away?"

Still Haunting the Inbox

• Check out our 25 Hottest Urban Legends list to keep abreast of what's circulating in the on-line world.

Fraud Afoot

• Visit our Top Scams page for a list of schemes commonly used by crooks to separate the unwary from their money.



Remember to click on the "Large Player" icon on the YouTube control panel in the lower right-hand corner when you watch the first clip. If you do, all other YouTube videos should default to the same setting throughout the rest of your session at the computer.


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This is Christina Zenato...

This is Christina in a wetsuit inside a tank full of sharks...

Dewey Moore calls this clip truly extraordinary, and I'm of the opinion that the accompanying musical track makes it even more so. Watch Christina interact with the sharks, especially the one at the end of the video. (4 Mins.)



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David Byers sent in this Nov. 2011 clip of former game show host Chuck Woolery ("Wheel of Fortune" and "Love Connection") pontificating on how the Feds could have cut the $1.2 trillion over ten years that had been promised. He makes a lot of sense. Perhaps he should have entered the race for POTIS. After all, a former actor had what it takes. Why not a former game show host? (3 Mins.)



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As Treasurer of the PBA, "Lumpy" (Larry Lundberg) is far more adept at finances than the rest of the membership — or at least he wants us to think he is. (Some of us have always wondered why he takes the PBA checkbook with him when he goes on vacation six times a year, but that's another topic.) Regarding the nation's Social Security system that was destined to go bust a few years down the road, Lumpy was happy to provide us with some breaking news. If this report is accurate, Congress has finally found a solution to the problem and passed a bill that will keep the Federal Ponzi Scheme flush with cash for the next several generations. Have a look and listen, but be aware that the news report includes a naughty term that would make FCC officials wet their pants. (2 Mins.)



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Lumpy also sent in this item that is as amazing as it is spooky. Click on the link below, then follow the instructions and you should wind up with a crystal clear image of your residence. And if this works for you like it did for me, you'll be able to use your mouse to zoom in and out and pan up and down your street. You will also be able to switch to an aerial view of your neighborhood. If it doesn't work for you it's probably because your digs are not yet in Google's database. (Time depends on you.)

My residence in Fremont...



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This Norton Commando Transformer video sent in by Don Hale is pretty slick, whether you know anything about Norton motorcycles and transformers or not. (2 Mins.)



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Don also sent us this video of a test by Boeing of a rejected take-off of a fully-loaded 747-8 freighter weighing nearly a million pounds. If the Seattle aircraft company sent this out on the Internet for the purpose of building confidence in their product, they certainly succeeded in my eyes. (3 Mins.)



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Look carefully and you should be able to see a cat peeking at the dog from the far side of the bed in the upper right. The canine thinks it is intimidating the feline, but watch what happens when the cat has had enough of the barking. (1 Min.)



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While still on the subject of man's best friend, imagine that you have a small dog that watches closely as you play your piano and sing. Got the picture? Now imagine you left your house to run and errand and left the dog alone while the video camera was running. (1 Min.)



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Ever heard of creating art using salt? Neither had I until I watched this clip sent in by Stan Miller. No joke. (3 Mins.)



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Get better than 10 of the 20 questions correct on this timed Neurological Skills Test on your first try
and you will be able to claim bragging rights over most people. (Time depends on you.)



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Just when I thought I had included all the Ray Stevens' ditties worth passing along, another one falls into my inbox courtesy of Chuck Blackmore. This one is titled "Stuck On You," and it's presented in such a way that makes it possible for you to sing along. (3 Mins.)



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With all the bad news we've been subjected to this week, perhaps this final item will lighten things up. This video from Bruce Morton made me realize how badly I miss Johnny Carson, especially when he had guests like Dom Deluise on his show. Unlike Leno and Letterman and the other late-night wannabes, the then-master of late night TV got laughs without tearing down presidents presidential candidates and other famous people. In this clip Johnny and Dom perform the amazing egg trick. (4 Mins.)


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That's all we've got. Thanks for visiting.


Pic of the Week:


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