I read Jeff Arthur’s March 13 commentary, “Costa Mesa pension burden falls on us all,” and I already understood many of Mr. Arthur’s initial comments on the underfunded pension obligation (UPO), but there were other comments in the second half of his letter involving quibbling, prevailing wages, outsourcing and the potential future charter committee that deserve further clarification.
Evidently, Arthur comes from a background that allows him to think that it is quibbling to criticize flawed city charters (city constitutions) unnecessary and avoidable million-dollar lawsuits and city officials being influenced more by outsiders than by residents. I do not come from such a submissive background, nor do many Costa Mesans, and so I will continue to be critical of matters like these.
Referring to the prevailing-wage section of the recently defeated flawed charter, Arthur says it is hard to know how much the savings would be from avoiding prevailing wage. There is good reason for this. Arthur didn’t reveal this, but it is important to know that only those projects funded solely with city money would qualify for avoiding prevailing wage.
At a City Council meeting it was estimated that these city-only funded projects are only about 10% to 20% of municipal projects. Also, the savings would be limited to just the labor costs, which are only about 30% of the total project costs. As a result, the total savings are likely to be relatively small. No reasonable person would approve a seriously flawed charter that would significantly change how the city is governed in order to get these relatively small and speculative cost savings.
Contrary to Arthur, I continue to question if outsourcing will save much money when the increase in the UPO is factored into the equation. The increase in the UPO will occur due to fewer employees paying into the pension fund. Even Stanford Professor Joe Nation, whom Arthur cited, didn’t think that more outsourcing would significantly help to reduce the UPO. In addition, regardless of how questionable the cost savings would be, there has been no commitment by the council to apply any of the savings to the UPO.
Next, Arthur assumes that the council will appoint a charter committee, and that I would want to be on it. First, I have yet to be convinced that a charter is needed, and second, I strongly prefer an elected charter commission rather than an appointed committee. I prefer an elected commission because the council can’t change what it proposes, but the council can change what is recommended by a committee they appoint. With an appointed committee, the council could even change the charter back to the flawed charter that was originally proposed and recently defeated.
Lastly, just to be clear and despite the exchanges between me and Mr. Arthur, I would like to see a pension committee resolve the UPO issue. I even think that it could be resolved better by a committee of citizens with the single goal of doing what is best for Costa Mesans based on the facts, rather than by those on the council that, I am concerned, may be constrained by their ideology, outsider influences, and concerns about future campaign support and funding.