November 2008 By ANYA SOSTEK

LINK

1:16 a.m. November 28, 2008

WASHINGTON — Black Friday's retail shoppers hunting for holiday bargains won't be enough to stave off what's likely to become the next economic crisis. Malls from Michigan to Georgia are entering foreclosure, commercial victims of the same events poisoning the housing market.

Hotels in Tucson, Ariz., and Hilton Head, S.C., also are about to default on their mortgages.

LINK

LINK

6) Public DB plans may have a leg up in financial crisis

State and local pension plans may emerge from the financial crisis in better shape than other retirement plans due their investment strategies, reports the National Institute on Retirement Security.

The nonprofit organization examined records from U.S. Federal Reserve and U.S. Census Bureau on public pension plans from 1993 to 2005. NIRS researchers concluded that public pension plans tend to invest conservatively in bear and bull markets, which means their portfolios may be in a better position to recoup losses from the current financial crisis.

LINK

7) Letters: Perhaps state bankruptcy is our best

solution

Nov. 25, 2008

Sacramento can start cutting costs by bringing state employee compensation in line with the private sector ["2 governors, 2 deficits, 1 handout," Editorial, Nov. 24]. In a recent study, the Employee Benefit Research Institute estimates the average public-sector worker earns 46 percent more in total compensation than their counterpart in the private sector, largely because government employers spend 60 percent more per worker on benefits (i.e. health care, pension, overtime, time off, etc.) than the private sector. It is no wonder everyone is flocking to government jobs.

LINK

8) How CalPERS holds taxpayers in contempt

November 24, 2008

The California Public Employees' Retirement System's recent announcement that its portfolio has shrunk by more than one-quarter over the past 16 months – plunging from $248 billion to $179 billion – was not particularly surprising. Like almost all government pension funds, CalPERS invests heavily in the stock market and inevitably stood to lose big during Wall Street's worst year in decades.

Unfortunately, what was also unsurprising was CalPERS' reaction to its portfolio's plunge: The pension giant made clear that its “solution” for its cash problem was for taxpayers to pay more.

LINK

9) City bankruptcies may signal trouble for California

Are they signs of difficulties yet to come for municipal governments? Or, is the revelation that two small cities in Northern California are considering bankruptcy protection merely news of isolated financial trouble that's unlikely to spread around the region?

Government leaders and experts on municipal finance are quick to say Rio Vista and Isleton face unique difficulties that might not affect others. But with local, state and national economies fully roiled, the same experts acknowledge that other municipalities on the brink could tumble into insolvency.

LINK

In the Nov. 20 budget workshop, city government officials determined that $1 million from the General Fund and $350,000 from the development fund needs to be cut by the beginning of 2009 to keep the city’s budget balanced.

Mayor Primo Santini said the purpose of the meeting was not to make cuts, but rather to give the city staff an idea of the scale of the cuts as well as where to recommend cuts be made.

“We did know, going into this year, that it would be an odd year…this is a national problem and we’re not immune to what’s going on around us,” said City Manager Jim Estep. “We’re still looking at additional cuts next year. If we don’t look at cuts this year, our cuts next year would be dramatic…dramatic.”

LINK

11) Editorial: CalPERS gets big new burden

2002 LAW AND A NEW RULING IS PENSION GRAVY FOR FEW WORKERS

As tens of thousands of state workers brace for possible pay cuts and layoffs, a lucky few retired state workers can look forward to bonuses in their pension checks. Anyone wondering who is responsible need look no further than the Legislature and former Gov. Gray Davis.

In 2002, California legislators included 3,200 state employees in more than 90 classifications – among them milk testers, billboard inspectors, barbering examiners and deputy directors of the Department of Real Estate – in the universe of state employees who qualify for safety retirement benefits. Such benefits had previously been reserved for law enforcement officers and firefighters. The bill, approved by lawmakers and signed by Davis, raised the pensions for the newly designated safety employees by 25 percent.

LINK

When the city of Vallejo filed for bankruptcy protection in May, the logical question was: Is this a sign of things to come?

Now two more California cities – Rio Vista and Isleton – are considering bankruptcy protection as an option as they face large budget shortfalls and staggering debt.

LINK

13) Despite static, city should stick to benefits plan

Over the next 30 years, Redding residents owe nearly $100 million for the cost of health care for retired city employees. And what does the International Brotherhood of Electrical Workers think of that staggering figure? That it's not high enough.

The Redding City Council, facing up to that expensive reality under new accounting rules, late last year decided to phase out retiree health benefits for new employees. Several city unions, in contract negotiations, have already agreed to give up the benefit. No current workers' promised benefits have changed.

But the IBEW, whose Local 1245 represents many Redding Electric Utility workers, has drawn a line. The union insists on keeping the benefit and is even waging a soft strike to drive its point home - a quiet labor action that could leave city residents in the dark.

Ray Thomas, business representative for the IBEW, rejected that characterization Wednesday. "There's no concerted activity," he said. Planned overtime has always been voluntary, he stressed, and "emergency calls are working like they've always worked."

LINK

14) A Cap on Pension Benefits

An Orange County measure could pave the way for sound pension finances.

While Obama-populism swept the nation on Election Day, voters in traditionally conservative Orange County, California, showed their colors and put the lid on public pension benefits. With a 75 percent majority, they voted overwhelming to require future county pension increases to be subject to a vote of the people.

The ballot proposal reflects a backlash against previously approved retroactive pension increases that have created massive unfunded liabilities on the county's books. Under the new law, such proposals would first have to be sent to voters for approval, along with an actuarial report of the expected future costs.

LINK

15) Stories City Lights

There is a showdown coming. It might turn into a gunfight. Or at least a fistfight. There is a huge City budget deficit. To close the gap, the current council only wants to talk about cuts in services. It doesn’t want to discuss excessive labor costs, which are the major source of the financial affliction. And few are willing to talk tax increases. The incoming council, which will be even more in Big Labor’s pockets, will almost certainly be less inclined to address the real cancer.

At a special meeting of the council’s Budget and Finance Committee November 12, “We heard nothing about the biggest cost of operating the City: labor,” says Councilmember-elect Carl DeMaio. “We heard nothing about what we are going to do to trim labor costs. Instead, they [councilmembers] talked about cutting services. It’s mind-boggling. They are discussing library and rec center cuts and delaying water, sewer, and road-repair projects, but they are not willing to talk about excessive salaries and benefits that have become the third rail of San Diego politics.”

LINK

16) Wescoe: Don't Panic. Aguirre: Panic

LINK

17) Isleton needs $1 million to avert bankruptcy, city

manager says

Isleton's city manager said Wednesday that if the debt-laden city can't borrow $1 million by the end of the year, he will urge the City Council to seek bankruptcy protection.

LINK

18) Redding union leaders are unsure of their stance

on proposed benefit cuts

By Scott Mobley
Thursday, November 20, 2008

Redding public employee union leaders say it's too soon to know whether they'll make major concessions or accept layoffs as officials prepare to lop $3 million off the general fund budget.

The City Council on Tuesday evening endorsed the idea of asking workers to pay their required pension fund contributions as one way to keep the city's general fund out of the red over the next two years.

The city also could ask employees to accept mandatory furloughs as a way to cut costs and avoid layoffs.

Becky Kraft, shop steward for Service Employee International Union Local 1292 (SEIU), said the union won't begin to shape a response until after Thanksgiving.

"We haven't gotten there yet," Kraft said. "The bargaining team hasn't met yet. We haven't sat down with the city."

LINK

19) Vallejo's neighbors try to stay afloat

Carolyn Jones, Chronicle Staff Writer

Wednesday, November 19, 2008

LINK

20) Sanders says no bankruptcy -- yet

File this one under foregone conclusions.

November 18, 2008

Those bankruptcy talks San Diego's outgoing City Attorney Michael Aguirre wanted to start among the city's elected officials? There won't be any.

Aguirre's top deputy, Don McGrath, asked the City Council in closed-session on Tuesday to consider meeting with the experts who led Vallejo into bankruptcy earlier this year to discuss the possibility here. So what happened?

"Nothing," Aguirre said in an interview Tuesday afternoon. "They just decided not to proceed."

"There's just a reluctance to admit how bad things really are," he added.

LINK