Term Limits: Debate Or Debacle?

council_aAs term limits, once again, entered the public discourse last Tuesday evening I was reminded of something my dad said to me and my brothers on countless occasions, “Knock that crap off!”

term limitsThings started sliding downhill when comments were made during Matters From The Audience by the very people (former elected officials) who blocked any discussion of term limits when Steve Vargas raised the question in 2000 and Roy Moore asked to put it on the agenda in 2002.

While no one else who spoke specifically favored term limits, they acknowledged it’s timeliness, underscoring the complex options and how appropriate it is to hold a public debate.

ParkerFor almost an hour Council “discussed” the matter where some members resorted to language, accusations, gestures and tone of voice that violated all five guidelines Council adopted in their Code of Conduct covering behavior in public meetings. The lack of civility during Council’s debate was alarming and reminded me of how petty and political municipal government has become.

Councilman Simonoff, a perpetual opponent to term limits (considering running for an unprecedented sixth term) dug up an obscure response I made to someone commenting on Brea Matters four years ago. “The notion that anyone has an expiration date after which they are no longer capable of contributing to society is preposterous.”

SimonoffWell, four years have passed. Since then, especially this past year as Mayor Simonoff orchestrated the most unproductive Mayoral year I can remember, he consistently has kicked the can down the road on important issues.

Was he hoping to avoid any possible new blemishes on his record as he prepared his attempt to set a city record for consecutive terms in office? Seems more than plausible.

No worries Councilman Simonoff, you could continue to contribute to society by volunteering at the Senior Center or with the Brea PD as a VIPS Officer. As far extending your career in politics… twenty is plenty.

Finally, as the vitriolic exchange ran it’s course and everyone had ample opportunity to share their opinions, Mayor Marick put a lid on the embarrassing and unproductive runaway discussion… bringing a voice of reason to the proceedings.

MarickShe pointed out that neither the upcoming meeting of Brea First addressing term limits and campaign finance reform nor the floundering Brea Envisions project facing another nine months before completion, was an appropriate place to kick the can.

Further, to ward off a threat from outside the community to collect signatures and jam a “two terms and out” term limit initiative on November’s ballot, Mayor Marick pointed out it’s Council’s responsibility to manage the discussion and to act upon the majority opinion in a timely manner.

Staff was instructed to come back with recommendations, amongst other things, on how best to conduct a public forum on campaign finance reform and term limits.

This seems to be a perfect place to share a recent comment posted on medium.com by Vice President Biden, “Our country’s history is studded with moments where we’ve found a way to moderate the extreme reactions that threaten to tear us apart — and find a path to progress. It’s when we’re truly at our best.”

So, as my dad used to say, “Knock that crap off!”

This isn’t rocket science or tiered water rates. There is no reason we can’t have civil discussions about term limits and campaign finance reform – and reach a consensus about how we wish to formally deal with these issues in a way that will benefit the community for generations to come.

To view the meeting yourself, go to Brea’s website and click the “Meeting Index” tab, then 11 Matters from the Audience and 14 Term Limits Discussion.

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Brea First: Unfunded Pension Liability

unfunded liabilityUnfunded pension liability was the topic at last night’s Brea First meeting. A very detailed description and analysis was presented by Pete Constant and Truong Bui from the Reason Foundation. When I say detailed, I’m mean deep into the numbers, tiered water rates, where did you get your PhD. sort of detailed.

To their credit, and thanks to a stream of astute and probing questions from the audience, the details provided a backdrop upon which some very down-to-earth discussion emerged. While understanding how we ended up in this hole isn’t without value, finding a way out is the real issue.

A brief history lesson.

In 1999 Council adopted an enhancement of the city’s defined benefit retirement program providing Public Safety personnel with a guaranteed 90% retirement at 30 years of service (Simonoff, Perry, Moore, Daucher yes; Vargas no). This greatly exacerbated Brea’s unfunded liability. Had Brea chosen a defined contribution plan instead we wouldn’t be having this conversation.

In 2000 Brea was overfunded to the tune of $15 million. I’ll let that sink in for a minute. We were ahead of the game by $15 million bucks! Expressed in 2016 dollars, that would be $17+ million – almost three times what we just deposited into our PARS account (Public Agency Retirement Services).

It was downhill from there.

pension liabilityIn 2001 and 2009, coinciding with the two recessions, funding rate for retirement had dropped from an enviable 133% in 2000 to 60% in 2009. Today’s unfunded pension liability, conservatively, is $85 million dollars and market value assets are only 74.9% of what is required.

The $85 million relies upon an overly generous assumed Rate of Return that CalPERS projects to be 7.5%. The average Rate of Return earned by CalPERS investments over the last 15 years is 5.2%. I’m not sure who they’re trying to fool, participants or themselves or both?

Staff has suggested to Council that maintaining an 80% funded level is sufficient. It is not.

That assumption puts all Brea services in jeopardy, including public safety. Further, the $6 million transferred from year end surplus into the PARS account is barely a drop in the bucket. The road to hell is paved with good intentions.

If you’ve ever tried to pay off a credit card relying on making minimum payments, you know exactly how ludicrous this is.

Where the state comes in.

The decades old dinosaur that is CalPERS operates using a very complex set of calculations to determine Rate of Return and Discount Rate. I’ll save you the rocket science, you can find the full reports here if you’re so inclined.

Suffice it to say that CalPERS is systemically malfunctioning and in dire need of a major overhaul. This is the other half of the problem/solution formula. Literally thousands of agencies state wide share in this multi-billion dollar unfunded liability. Public employee pensions are constitutionally guaranteed.

So, no matter what Brea decides to do to fulfill our local responsibility, funding our pension plan, we also have to bring pressure to bear on Sacramento to adopt the constitutional amendments that govern how public pensions are managed.

Joining forces.

I suppose it isn’t out of the question to think cities might band together to lobby Sacramento. Brea keeps a high priced lobbying firm on retainer, other cities must do the same. There is strength in numbers.

League of California CitiesOh, and as longstanding members of the League of California Cities I would think we could turn to them for assistance too. After all, that’s what they do… right, they advocate on behalf of member cities.

But wait, their employees pension plan is CalPERS. Is it possible there is a conflict of interest here?

Where does Brea start?

pension liabilityWe’re in a hole. A deep hole. We need to stop digging and find a way out.

Finding that way out must start with the Council. They need to create a plan to raise our pension funding level from 74.9% to 100%. Not over some protracted length of time. Now. Anything less than 100% adds to our unfunded liability.

Council must commit to a vigorous debt reduction plan, eliminating our unfunded liability.

It’s not as simple as tacking on another half a percent or so sales tax targeted only to pay off the debt. That’s illegal. And we’re not likely to stumble across some windfall and miraculously escape. It will take sacrifice.

City services will be seriously impacted. Public health and safety services will be effected as well. If you thought coping with the drought has been tough, you ain’t seen nothin’ yet.

pension liabilityOkay Council, the ball is in your court. It looks like Brea First is committed to holding you accountable… so am I.

Download PDFs of the Reason Foundation Brea Unfunded Pension Liability Presentation and Report by clicking on the blue links.

Goodbye Mr. Moore, And Thank You.

It is with profound sadness that I share the news of the passing of former Mayor and longtime Council member Roy Moore who lost his battle with cancer this morning.

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My deepest condolences to Roy’s wife Deanna, their extended family and many friends. Roy’s unrivaled devotion to Brea has helped make this community what it is today.

Thank you Mr. Moore, for your leadership, your vision and your unfailing friendship.