Truth, Accountability in Alameda Government
“The comedy of #Alameda elected officials downplaying great economic news because it undercuts austerity plans is very evident [at the April 16 Special City Council Meeting on the budget,]" the East Bay Citizen’s Steve Tavares, tweeted that evening.
During the above referenced meeting, it appeared that some city leaders ignored or glossed over the city’s improved financial position in an attempt to justify opposing a proposed contract extension to public safety workers that would help the city reduce its retiree health benefits, known as “Other Post-Employment Benefits” (OPEB). The contract will be voted on Wednesday, April 29.
But elected leaders have a responsibility to follow the law and be accountable to the truth and facts of municipal government, particularly when it comes to its finances.
The truth is that Alameda’s financial news has, for the first time in more than a decade, been good. That was achieved by the hard work of the prior city council and a partnership with our public safety workers. And that hard work has put the current council in the enviable position of being able to reduce its long-term liability for OPEB.
- Our prior City Council left the city with an $11.5 million budget surplus and an increased general fund reserve of approximately 37percent — far above the city’s minimum 20 percent requirement.
- The new fiscal year budget projects an additional surplus of over $8 million in part because of the 2008 property transfer tax revenue (Measure P).
- The independent financial rating agency Standard and Poor’s upgraded the city’s General Obligation bond rating from AA to AA+, citing Alameda’s strong financial management.
During my eight-year tenure on the City Council, we had no budget surpluses of note. Rather, we regularly had to cut services to avoid steep deficits.
The prior City Council lived through one of the worst economic downturns of our generation, and we recognized that negotiating with our employee unions would put the city on sound financial footing. The policies put in place during that time have worked.
City Treasurer Kevin Kennedy acknowledged this last September “given the recent history of the municipal bond market and the difficulties of Detroit, Vallejo and Stockton, it’s noteworthy that the rating agencies rewarded Alameda for its fiscally sound policies. I attribute this to the City’s strong reserves.”
The other truth that cannot be ignored is that the city has no power to unilaterally change pension or health benefits. Alameda is part of the pool of the California Public Employees Retirement System (PERS) in providing pensions to its employees. We are fortunate that our public safety employees agreed to pay for a larger share of their pensions (15 percent) than the law requires (12 percent).)
Similarly, Alameda cannot unilaterally change any benefits or force employees to pay for any part of OPEB. That requires negotiation. The city asked police and fire staff to share in the payment of OPEB and they agreed to do so in exchange for an extension of their current 2010 contract to 2021 (It currently expires in 2017).
We worked long and hard to put ourselves on a solid financial ground. The truth is we have the funds to solve this problem, and the truth is we cannot do so without the agreement of our public safety partners.
Let’s hope our new city leaders recognize this truth and take advantage of this rare opportunity on April 29.
Lena Tam sat on the City Council from 2006-2014. She served as Vice-Mayor from 2006-2009.