Town Square

Post a New Topic

Dick Rosenbaum Nailed It

Original post made by Carol Gilbert on Oct 26, 2006

Dick Rosenbaum'a Guest Opinion on Oct. 25, 2006, hit the nail on the head. Our city council has sold us down the river by negotiating an unfunded contract with the city employees. The pension plan in particular is an affront to the rest of us who will never have the luxury of such a plan and yet must fund it for them. The city's financial woes should certainly made it clear that signing off on this level of compensation was absurd in the ridiculous. If we cannot undo what's been done, for heaven's sake, it must be a litmus test next election for anyone who wishses to represent us on the council. Those who supported this must be OUT!

Link to Rosenbaum's complete column from the Weekly: Web Link

Comments (9)

Posted by David, a resident of Professorville
on Oct 27, 2006 at 10:29 am

Carol,

You (and Dick) are absolutely right. The actions of the council were shameful. It is interesting to note that only Kishimoto and Mossar dissented. Apparently you have to be in your last term on council with no possibility of running again to develop some political courage.

David


Posted by J.L., a resident of Ventura
on Oct 27, 2006 at 11:18 am

Carol..."The pension plan in particular is an affront to the rest of us who will never have the luxury of such a plan and yet must fund it for them. The city's financial woes should certainly made it clear that signing off on this level of compensation was absurd in the ridiculous."

Carol, you and David are in the minority on this one - thank god.

As you can see by the action on this thread, there is really not as much concern from the public as you might think.

What disturbs me is that those few who criticize public employee benefit packages that are generous, mostly argue against those packages on the basis of what the private sector pays. Yes, the private sector, which has over the last two decades stripped private sector employees (maybe Carol and David) from their pension plans, and done everything it icould to transfer wealth from hard-working employees, further burdening them with inadequate health plans, less time off, extended retirement dates, reductions other job benefits, etc. etc.

It's sad to see private citizens arguing for the same, pathetic lowest-common-denominator benefit packages that currently plague private sector employees, and wishing the same curse on public employees.

Instead, we should be taking good public employee nebefit models, and compelling our private sector employees to follow suit.

To me, this whole argument wreaks of a lack of imagination regarding ways to increase city revenue so that benefits can be easily handled, and a kind of pure envy directed irrationally at people who try to do their best every day, like most of us.



Posted by Paul Losch, a resident of Community Center
on Oct 27, 2006 at 1:32 pm

I have stated in letters to the Weekly and in other forums that Palo Alto has a serious revenue problem. Similarly, Palo Alto has a major infrastructure backlog problem that goes out indefinitely into the future. And, like most other built out communities in this state, we have an employee compensation and benefit structure that requires serious scrutiny in light of where things are headed on these other two matters.

Even if we develop a robust new revenue model for Palo Alto (which we are a long ways from accomplishing) and find another way to fund some of our major infrastructure needs (likely requiring a vote of the community to approve,) employee cost structure would be a major issue, and it is made even more problematic in light of the revenue and infrastructure challenges.

By and large, there is a high correlation between the employee count in Palo Alto and the services we receive. In light of the increasing cost per employee Palo Alto faces, services (and the employees that provide them) can be expected to get cut, curtailed, and totally eliminated with the current framework of revenues and expenses we face.

We have to collectively get off a few treadmills if we hope to see the character of Palo Alto maintained and enhanced as I think most of us who live here would like. One revenue treadmill that must be abandoned is that we can get services for only pennies on the dollar of what they actually cost. Even if we improve the sales tax, hotel tax, and some other revenue streams, it is unrealistic for us to think that such revenues can subsidize as they did in the past services that the City provides the community. If we want to continue to have very high quality services, parks and other offerings in Palo Alto, those of us who live here and enjoy them must be prepared to pay more of the cost of providing these services. That is a choice the community must make, just as we do in our private lives as consumers.

With regard to the employee cost treadmill, we have to sit down with all stakeholders at the table and determine what a city employee's compensation and benefit structure needs to be going forward. I agree with Dick Rosenbaum that the current, traditional approach is largely unsustainable and must be significantly re-worked. By the same token, we must be able to attract employees of high caliber if our City's character is to thrive in the future. We should be working on this now, not when the time to negotiate the next contract comes up.

There is an opportunity for us to take a leadership role in California on this, and there are examples of it successfully occuring at other levels of government (during the Clinton administration, several things affected Social Security solvency and federal employee retirement benefits--I know this first hand, since my wife is a physician with the Veterans' Administration.) It does not have to be acrimonious, viewed as a zero sum game, or force fed into a private sector model, which is an unrealistic basis of comparison.

Here's what I would pose as questions to anyone who is truly concerned about Palo Alto's future:

--What do you think our revenue strategy should be?
--How do you think we should finance the estimated $200 million worth of infrastructure costs that we face?
--How can we develop an approach of compensating our employees going forward that attracts high caliber people, maintains the character of our community, and is sustainable actuarily over the next 30-50 years? The only unacceptable answer as a starting point is continuing the current approach.

Answeing those questions will keep many people in Palo Alto busy for some time to come,


Posted by A city employee, a resident of Community Center
on Oct 27, 2006 at 4:23 pm

There are a number of reasons why the new contract is fair. As city employees, all of our retirement comes from CalPERS; we will not collect Social Security unless we've worked elsewhere. I'm not sure what people who are objecting think we will get when we retire, but it's pretty modest -- certainly not enough to live in Palo Alto!

Almost all of the other cities around us have already gone to the new retirement formula. Palo Alto is far from leading the pack in this matter. If the city wants to be able to recruit and retain good employees it has to keep up. Our salaries only fall in the middle of the pack, compared to other places. Without decent benefits and retirement, why would anyone want to come to work (or stay) here. And we all know that Palo Alto wants to enjoy a high level of service.

J.L. is right -- the private sector should follow the course of the public sector and stop bloating the incomes of the corporate elite instead of taking care of its workers.

Years ago Palo Alto led the way in services and facilities. Now the citizens seem to want to have it all and not pay for it. The city certainly does not lead the way any more. Most of us who work here try to provide excellent service despite less than ideal working conditions. It's demoralizing to see comments like Carol's and David's.


Posted by The Mayor, a resident of Another Palo Alto neighborhood
on Oct 27, 2006 at 6:56 pm

Paul,

Employee cost structure is always the major portion ofo service delivery; it's a given. We have a problem here that is structural in three ways:

1) Service compensation that is built in as a legacy debt.

2) A governance structure that prevents fast fiscalm partnersing, and other actions sufficient to bring in substantial new revenues.

3) A local culture political culture that has catered to a relatively few vocal constituencies. It's a time-worn groove.

I agree that we're a long way from accomplishing the goal of developing robust new revenue models, but it can be done.

It's absolutely not a foregone conclusion that service areas will be cut, as there are co-op and other private/public possibilities that the city can enter into.

I agree 110% with your statement: to wit, "If we want to continue to have very high quality services, parks and other offerings in Palo Alto, those of us who live here and enjoy them must be prepared to pay more of the cost of providing these services. That is a choice the community must make, just as we do in our private lives as consumers".

That siad, our community can be LED to make these choices. "Waiting for the politics to fall into place" has been the way Palo Alto has moved forwrd in the past. That will have to change, and a revised governance model may be required to make that happen.

"--What do you think our revenue strategy should be?"
Aggressive pursuit of shared municipal services.

Far more aggressive business development, that locates new business, and cleverly leverages current assets.

Aggressive development of multi-level income infill housing, along with mixed use retail.


"--How do you think we should finance the estimated $200 million worth of infrastructure costs that we face?"
Parcel taxes and Bonds, with some private help, if possible. Some of these infrastructure services will require leadership to keep in place.


"--How can we develop an approach of compensating our employees going forward that attracts high caliber people, maintains the character of our community, and is sustainable actuarily over the next 30-50 years?"
Hire top notch people from the director level up with firm, aggressive performance milestones, with rewards for accomplishing those milestones.

Last, we need to shrink the size of City Council, bring aggressive focus to goal-setting - and, and elect a mayor.

Stay tuned...


Posted by curious, a resident of Downtown North
on Oct 28, 2006 at 7:45 am

I think there is no appetite for further bond/parcel taxes for the near future, after recently passing the storm drains & school parcel taxes.

I remember Larry Klein campaigning on "fiscal responsibility", but haven't seen him take the lead on solving some of the problems here on addressing the budget, and the build up in deferred infrastructure needs.

At some point, there will either need to be cuts in service (and layoffs in city staff) or increases in taxes. The longer that the this decision is delayed, the more severe the solution will be in the future. When the need for a solution gets more & more imminent, some future city council will get elected to address it. I think its unfortunate that the city council going back to the year 2000 has not had the wisdom or the will to make the smaller course corrections needed.


Posted by outraged, a resident of Another Palo Alto neighborhood
on Oct 28, 2006 at 8:34 am

I think the idea that nobody cares about this is false. The Penninsula columnist for the Merc wrote a column about the contract and was deluged with calls and e-mails from outraged Palo Altans.

If Rosenbaum, or anybody else were to announce a recall petition against the council members who voted for the contract, he would have several dozen volunteers on the street within days.

Lastly, it would be very useful if the full, burdened cost (salary, overtime, benefits and retirement) of city employees by job category were published. I'll bet it is way higher than private sector equivalents. How about it City Auditor?


Posted by ToldUSo, a resident of Atherton
on Oct 28, 2006 at 10:27 am

Since once again all this comes down to money, we have to ask ourselves again why are all Palo Altans' sales tax dollars going out of the city. We need to bring some businesses into the city to generate serious sales tax. We are losing out all the time. This is now URGENT.


Posted by Carol Gilbert, a resident of Old Palo Alto
on Nov 8, 2006 at 9:49 am

I am the original poster and in response to J.L., I never had a pension to lose. My retirement is strictly Social Security and whatever I put aside in my 401K plan. I think pensions are wonderful, but they are phasing out everywhere but the public sector. I don't propose their removal, but they should only be one part of an individual's retirement and not some 80% of salary, full medical, etc. It is unrealistic.

I'm not only with Dick Rossenbaum, but with Diana Diamond when she says we could attract qualified employees without giving the store away. Note, I also felt the same way when I worked in high-tech right here. There was plenty of good material for CEO's, CFO's, etc., without forking over inordinate sums of money and options. It too is unconscionable.


If you were a member and logged in you could track comments from this story.

Post a comment

Posting an item on Town Square is simple and requires no registration. Just complete this form and hit "submit" and your topic will appear online. Please be respectful and truthful in your postings so Town Square will continue to be a thoughtful gathering place for sharing community information and opinion. All postings are subject to our TERMS OF USE, and may be deleted if deemed inappropriate by our staff.

We prefer that you use your real name, but you may use any "member" name you wish.

Name: *

Select your neighborhood or school community: * Not sure?

Comment: *

Verification code: *
Enter the verification code exactly as shown, using capital and lowercase letters, in the multi-colored box.

*Required Fields

Scott’s Seafood Mountain View to close, reopen as new concept
By Elena Kadvany | 14 comments | 4,282 views

How Bad Policy Happens
By Douglas Moran | 21 comments | 1,448 views

The life of Zarf
By Sally Torbey | 10 comments | 1,076 views

Freshman Blues Don't Mean Wrong College
By John Raftrey and Lori McCormick | 1 comment | 858 views

When Grandparents Visit
By Cheryl Bac | 4 comments | 800 views