Nearly half of public sector workers in Costa Mesa told they might be laid off, city can't afford pensions

3/20/11, "Costa Mesa, CA government to lay off half their workers due to pension costs," American Thinker, Rick Moran

"As pension bombs go, this one is not very big. But the portents contained in this news that Costa Mesa, CA is going to lay off half its workers because of pension costs are dire indeed.

Washington Post:

• Nearly half the city workers in Costa Mesa received layoff notices last week. Street sweepers. Firefighters. Mechanics. Payroll clerks. Animal control workers. In all, about 210 of the city's 472 employees, many of whom have worked there for decades. On Thursday, as the notices were being handed out, one maintenance worker committed suicide by jumping from the city hall roof.

"It's like they decided to blow up the city," said Billy Folsom, 58, a mechanic who got a pink slip. "It's devastating."

The cutbacks are necessary because the escalating costs of providing pensions for police, firefighters and other unionized employees are draining the city's revenue, city leaders say.

Within three years, city projections show, more than one of every five tax dollars will be spent on employees' retirement benefits, which were made far more generous in the years before the stock market crashed in 2008.

"Just do the math - this is unsustainable," said Jim Righeimer, the city's recently elected mayor pro tem. He campaigned on the pension issue, eliciting anger and a counter-campaign from the city's police and firefighters. "Under these kinds of burdens, we can't do everything the city needs to do."

Costa Mesa may turn out to be one of the lucky ones. Bankruptcy or massive tax increases are more likely to be the result for most other towns and cities that have

• this pension bomb just waiting to go off.

By facing the problem and getting on top of it, Costa Mesa may lose some city services, but at least they will come out of the crisis with their government largely intact."

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3/19/11, "Citing pension costs, Costa Mesa, Calif., plans to lay off nearly half its employees," Washington Post

"Jason Pyle, 38, a fire department captain... earned $160,000 in base, overtime and certification pay in 2010, according to city records. Pyle, who has been with the department for 14 years, could retire at age 54 with 90 percent of his base salary and some other forms of pay....

• "Between 1998 and 2008, the last year for which figures are available, total pension payments by state and local governments rose twice as fast as their payrolls, according to census figures.

But now that the recession has led to steep drops in pension funds, those promises to past and present employees may be much harder to keep. Dozens of state and local pension funds around the country are now considered seriously underfunded. By 2009, about 58 percent of state and local pension funds were less than 80 percent funded, a standard benchmark of pension soundness, according to the Center for Retirement Research at Boston College....

(Mayor Pro Tem) Righeimer’s campaign spent $70,000 for the November election, according to city records; the Costa Mesa police and fire unions, meanwhile,

• spent $101,000 in a campaign to discredit him.
  

(Righeimer won the post of mayor pro tem, similar to a vice mayor.)...

• He notes many candidates compete to win the endorsement of police and firefighters....

“After 9/11 happened, they were national heroes,” said Scott Baugh, chairman of the Republican Party of Orange County and a Righeimer ally. “Wouldn’t it be great to give a million dollars to every hero? It would be, but it is really unsustainable.”

Earlier this year, a bipartisan commission looking into pensions in California warned that “the retirement promises that elected officials made to public employees over the last decade are not affordable. . . . Pension costs will crush government.”

• According to city figures, for every dollar the city pays a police officer or firefighter, it must also set aside more than 40 cents to fund the employee’s pension. For every dollar paid a general employee, it must set aside 27 cents.

The average Costa Mesa police officer earned $105,000 in base overtime and certification pay in 2010, according to city records. The average firefighter

• earned $109,000 in base, overtime and certification pay last year."...

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