Responses to Peter Scheer's Commentary on Vallejo's Bankruptcy

In response to Peter’s recent commentary on Vallejo’s Bankruptcy. For most cities staff compensation is the city’s biggest expenditure. There should be more room for citizen oversight and input.

One of the most important aspects in need of close scrutiny are a city’s revenue projections. I would guess when Vallejo negotiated and approved staff compensation packages their revenue projections showed they could afford it. Most likely, the public that went along with the raises thought the city could afford it, not realizing the revenue projections were overly optimistic (which seems to be common when times are good).

It took me 3 years to get my city to describe their revenue projection model to me. I would assume other cities are similarly secretive or cryptic with their revenue projection models and assumptions. This can be a real problem because any long-term budget can be “balanced” by playing with revenue projections.

Cities can make a reasoned argument to keep negotiations secret. Keeping revenue projection models secret is inexcusable.

-Kevin Cummins
Encinitas, CA

From The Huffington Post:

– A suggestion for a different way to fund public employee pensions:
instead of the government entity gauranteeing a specific monthly dollar amount in retirement, to be paid out of tax income, have the government entity pay a negotiated amount into a pension fund that cannot be tapped by any government bureaucracy. The pay-out to retirees might fluctuate with ups and downs of the market, but even if the governmental body declared bankruptcy, the retirement funds would still be safe and protected, from all but inflation and market vagaries.

My own pension resembles what I have described, and it works pretty well. The CEO of the company I worked for cannot steal it for his golden parachute, and the company cannot use the pension funds to cover operating expenses.

From the Sacramento Bee editorial:

– Good article! I would go one more step & say that the Public, who pays the bills, should be allowed to vote for approval or disapproval of the union contracts. Right now, these bloated contracts are being approved by the same people who are taking campaign contributions from the unions – a clear conflict of interest. Let us vote – we will derail this gravy train.

– At one time, I believed in the current system because we elect these officials to do this job for us and we should let them do the job without being micromanaged. Unfortunately they have proven unable to stand up to the Unions, or unable to resist conflict of interest donations leading them to a sense of being in debt to the Unions, or for whatever reason they are unable to put the numbers together and see what bad financial decisions they are making. It is time for those who pay for the services to see what we are getting and at what price, BEFORE we sign the contract.