Thanks to good management and deep pockets, the city of La Cañada Flintridge has amassed a healthy budget surplus. But like the California budget surpluses of the 1990s, it will vanish in a heartbeat if strong action is not taken now to protect us from public sector retirement liabilities and costs.
A review of La Cañada's current operating budget shows that the state pension crisis is hitting La Cañada hard and fast. Our town's direct payments to CALPERS in fiscal year 2011-2012 were $457,000 but are expected to rise above $535,000 in 2012 -20123, an increase of almost 17%. Additionally, La Cañada paid a total of $2.587 million for public safety (police and fire) in 2011-2012 versus an expected $2.865 million for 2012-2013 — an annual increase of more than 10% for services where retirement costs drive the numbers.
Small numbers have a way of turning into large numbers if left to their own compounding devices. Toss in retirement costs for other public agency services that La Cañada contracts for and we could easily be on the hook for 15% of the town's annual budget to cover retirement costs by 2018 (versus approximately 5% today). Too bad about the summer concerts and bus runs to the beach.
We all know that Governor Brown’s recent pension changes amount to little more than a game of three card monte. It is time to come to our senses and take action, all the more so since Sacramento is now ruled by a Democratic super majority that has no incentive to do anything but continue to kick the can down the road. Rather than wait for the financial tsunami to overwhelm us with $500 parking tickets and $5,000 for previously funded paramedic calls, let’s be bold and put the state of California on the defensive where it belongs. Key to doing so is to stop the endless nitpicking over which nightmarish forecast is 100% accurate. Who cares if a second or third review of La Cañada's future pension obligations shows that the “real” number in 2018 will be 14.756% instead of the above estimated 15%? It's irrelevant. What's not irrelevant is the fact that steadily increasing numbers of California public servants have learned how to game the pension system to the extent that disability benefits, spiking and double dipping are almost taken for granted.
The paradigm can be shifted if the City Council would dare to convene an emergency meeting of neighboring San Gabriel Valley towns/cities. The purpose would be to restore simple, basic honesty to the California pension system with two subtext thrusts. First, the creation of a panel of San Gabriel Valley residents to investigate the feasibility of suing the state of California for willful and gross mismanagement of state pension programs. Second, the preparation of a resolution calling for the withholding of up to 25% of all funds due to the state by all San Gabriel municipalities until such time as the governor uses his executive powers to expunge the unholy trinity of state pension abuses: fraudulent disability retirement payments, all instances of double dipping and all ill-gotten gains derived from pension spiking, arguably the most egregious example of fraud in the state retirement system.
It’s a reach, of course, like many common sense initiatives, but there is power in numbers. Banding together with other San Gabriel cities can focus the discussion where it belongs and make change possible. It certainly isn’t coming from the top down because those at the top of California’s pension Ponzi scheme benefit the most from it. This is an issue that must be resolved from the bottom up.
La Cañada has experienced and hard-working civic leaders — leaders, by the way, who do not receive a pension of any kind for the public service work they perform. This is an issue where our city can, and should, take the lead.
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