Saturday, December 20, 2014
FAIRFIELD-SUISUN, CALIFORNIA
99 CENTS

Cities’ bankruptcy filings may rein in pensions

walters column sig

By
From page A7 | November 06, 2012 |

As financially troubled cities suspend their payments to California’s pension fund, federal bankruptcy judges may have the final word on the long-assumed inviolability of retirement benefits.

Neither Vallejo nor Stockton mentioned pension rights of current or retired employees when they filed for bankruptcy protection, even as they sought relief from holders of bonds and other creditors. But companies that had insured hundreds of millions of dollars in Stockton’s bonds mounted stiff resistance, contending that if they had to take a financial haircut, the city’s retirees should as well.

The California Public Employees’ Retirement System geared up for legal war, insisting that pensions are sacrosanct.

That issue is still pending, but the Sacramento bankruptcy judge handling the Stockton case ruled in a related issue that Stockton’s contractual health care obligations to its retirees could be voided under federal bankruptcy law, thus heightening legal uncertainty about pensions.

Then San Bernardino filed for bankruptcy protection, listing CalPERS as its largest single creditor at more than $140 million, and stopped making pension fund payments.

Once again, CalPERS geared up for legal war and asked the judge handling the San Bernardino case to reject the bankruptcy petition, saying the city was trying to improperly renege on its pension debts.

That issue, too, is still pending.

Then Compton, which hasn’t yet sought bankruptcy protection but may be headed in that direction, stopped making its payments to CalPERS, at least temporarily. Compton owes CalPERS nearly $3 million.

Again, CalPERS geared up for legal war, filing a lawsuit against Compton to compel it to make payments.

Paperwork filed by San Bernardino illustrates how rapidly rising pension costs have hammered many California cities. The city says in its filing that retirement costs had escalated from $6 million in 2000-01 to $22 million in 2009-10 and are projected to hit $24 million in a few more years.

“The increased retirement costs that the city will experience are unsustainable,” the city says, “and therefore immediate major intervention is necessary now.”

On one level, cities suffering pension-cost angst don’t deserve our sympathy. They expanded pension benefits, especially those for high-cost police officers and firefighters, with little regard to future impact.

But CalPERS encouraged those increases by supporting legislation to raise state employee pensions in 1999, claiming that investment gains would easily pay for them, not taxpayers.

Moreover, much of the cities’ added costs are being imposed by CalPERS to make up for the horrendous investment losses that the pension fund incurred in the past decade.

A day of reckoning is coming, and it may come in federal bankruptcy court.

Dan Walters is a columnist for the Sacramento Bee. Reach him at dwalters@sacbee.com.

LEAVE A COMMENT

Discussion | 3 comments

The Daily Republic does not necessarily condone the comments here, nor does it review every post. Read our full policy

  • RichNovember 06, 2012 - 3:39 pm

    I wonder how many of those CALPERS payments go out of State and out of Country. You guys built your house of cards and it's collapsing now. I don't feel like propping up your piggy sty with higher taxes so you can mismanage and treat us horribly some more either. Why don't you get your State's finances in order so California wont be burned to the ground in horrible rioting or insurrection.

    Reply | Report abusive comment
  • Joe PikeyNovember 06, 2012 - 7:03 pm

    "They expanded pension benefits, especially those for high-cost police officers and firefighters, with little regard to future impact"...So where were the concessions & cuts to FPD to help with the budget Fairfield City Council? Remember this if "P"-olice fails (or even if it passes)...

    Reply | Report abusive comment
  • Forrest GumpMay 19, 2013 - 2:57 pm

    I've worn lots of shoes , I bet if I think about it real hard I can remember my first pair of shoes.

    Reply | Report abusive comment
.

Solano News

Creche collection grows in size, popularity

By Amy Maginnis-Honey | From Page: A1 | Gallery

 
Handmade Christmas display is man’s labor of love

By Amy Maginnis-Honey | From Page: A1 | Gallery

 
 
 
Company competition a big win for charity

By Susan Hiland | From Page: A3 | Gallery

 
Meeting a great role model at any age

By Murray Bass | From Page: B5

Fairfield police log: Dec. 18, 2014

By Susan Hiland | From Page: A9

 
Suisun City police log: Dec. 18, 2014

By Susan Hiland | From Page: A9

Weather for Dec. 20, 2014

By Daily Republic | From Page: B12

 
.

US / World

Notorious California graffiti suspect arrested

By The Associated Press | From Page: A3

 
Island park in San Francisco Bay closed for weekend

By The Associated Press | From Page: A3

No harm caused by flames at Northern California refinery

By The Associated Press | From Page: A3

 
Wetter than usual start to new year in California predicted

By The Associated Press | From Page: A3

Hospital to pay $2.2M to settle false claims

By The Associated Press | From Page: A3

 
Napolitano named as UC public policy professor

By The Associated Press | From Page: A3

Man shocked 20 times during jail booking sues

By The Associated Press | From Page: A3

 
Animal rights activists take California rodeo to court

By The Associated Press | From Page: A4

California’s bullet train settles 1 of 7 lawsuits

By The Associated Press | From Page: A4

 
Tuskegee Airman Lowell Steward dies in California at 95

By The Associated Press | From Page: A4 | Gallery

Driver pleads not guilty in pedestrian deaths

By The Associated Press | From Page: A5

 
Bush officials gave CIA wide latitude

By The Associated Press | From Page: A5

Theater shooter’s parents plead for his life

By The Associated Press | From Page: A5

 
Obama says North Korea hacked Sony, vows response

By The Associated Press | From Page: A6

AP Interview: Coelho says Sony hack threatens all

By The Associated Press | From Page: A6

 
5 ways to make your email safer in case of a hack attack

By The Associated Press | From Page: A6

Celebrities react to latest Sony hack developments

By The Associated Press | From Page: A6

 
2012 movie massacre hung over ‘Interview’ decision

By The Associated Press | From Page: A6

Sony on shelving ‘The Interview': ‘We had no choice’

By The Associated Press | From Page: A6

 
Lava could reach Hawaii shopping center in 8 days

By The Associated Press | From Page: A10

Jury rules for Indiana woman in firing over IVF

By The Associated Press | From Page: A10

 
Bergdahl investigation wraps up; top leaders get briefings

By The Associated Press | From Page: A10

Texas eatery worker gets mink coat from customer

By The Associated Press | From Page: A10

 
Sugarland, promoter settle with state fair victims

By The Associated Press | From Page: A10

NY police officer suspended after videotaped punch

By The Associated Press | From Page: A10

 
Prepackaged caramel apples linked to 4 deaths

By The Associated Press | From Page: A10

Supreme Court won’t stop gay marriages in Florida

By The Associated Press | From Page: A10

 
Staples: Customer data exposed in security breach

By The Associated Press | From Page: A10

Australian woman arrested in deaths of 8 children

By The Associated Press | From Page: A11

 
Israel carries out airstrike on Hamas site in Gaza

By The Associated Press | From Page: A11

Pakistan executes militants and bombards tribal areas

By The Associated Press | From Page: A11

 
Franciscan religious order in ‘grave’ financial crisis

By The Associated Press | From Page: A11

.

Opinion

Yes, Virginia, the Santa wish list has gone digital

By Petula Dvorak | From Page: A8

 
Editorial Cartoon: Dec. 20, 2014

By Daily Republic Syndicated Content | From Page: A8

 
If you want to help the poor, fix the safety net

By Jim Tankersley | From Page: A8

.

Living

Community Calendar: Dec. 20, 2014

By Susan Hiland | From Page: A2

 
Today in History: Dec. 20, 2014

By The Associated Press | From Page: A2

Pampered pets that don duds move to the mainstream

By The Associated Press | From Page: B5

 
Horoscopes: Dec. 20, 2014

By Holiday Mathis | From Page: B11

Children from wife’s first marriage put father’s ashes in coffin

By Kathy Mitchell and Marcy Sugar | From Page: B11

 
.

Entertainment

More than 4 million people watched 1st dog telethon

By The Associated Press | From Page: A7

 
Kim Jong Un game spoof ‘Glorious Leader!’ moving forward

By The Associated Press | From Page: A7 | Gallery

Marathon bombing survivor in ‘Yes to Dress’ finale

By The Associated Press | From Page: A7

 
Kid Rock to perform pre-race concert at Daytona 500

By The Associated Press | From Page: A7

Actor Stephen Collins denies he’s a pedophile in interview

By The Associated Press | From Page: A7

 
.

Sports

Dodge, Vaca grad Mason lead Southern Oregon to NAIA title

By The Associated Press | From Page: B1

 
Raiders haven’t needed much from Janikowski

By The Associated Press | From Page: B1

 
AP sources: Peavy agrees on $24M, 2-year deal with Giants

By The Associated Press | From Page: B1

Dodgers end Yanks’ payroll streak, owe most tax

By The Associated Press | From Page: B2

 
FIFA will not reopen 2018 and 2022 World Cup votes

By The Associated Press | From Page: B2

Howe’s family reports rapid improvement

By The Associated Press | From Page: B2

 
2 Armstrong associates settle lawsuit with Landis

By The Associated Press | From Page: B2

Rays, Padres, Nats complete 11-player trade involving Myers

By The Associated Press | From Page: B2

 
Vanden girls open Nike TOC with win on Arizona

By Daily Republic staff | From Page: B2

Things to know about Friday’s baseball news

By The Associated Press | From Page: B2

 
Rookie receivers making their mark in NFL

By The Associated Press | From Page: B2

Former boxing champ Ernie Terrell dies at 75

By The Associated Press | From Page: B2

 
Gold medalist Phelps pleads guilty to DUI, avoids jail time

By The Associated Press | From Page: B2

Cal men beat Eastern Washington 78-67 for seventh straight win

By The Associated Press | From Page: B3

 
CIF football bowl games headed to Sacramento

By Daily Republic staff | From Page: B3

This date in sports history for Saturday, Dec. 20, 2014

By The Associated Press | From Page: B4

 
.

Business

California unemployment rate dips to 7.2 percent

By The Associated Press | From Page: B6

 
Chrysler gives in to gov’t, expands air bag recall

By The Associated Press | From Page: B6

T-Mobile paying at least $90M for unwanted services

By The Associated Press | From Page: B6

 
EPA sets first national standard for coal waste

By The Associated Press | From Page: B6

Sales for holiday shopping season comes down to the wire

By The Associated Press | From Page: B6 | Gallery

 
.

Obituaries

Dominic C. Scolaro

By Nancy Green | From Page: A4

 
Marian Kay Zutz

By Nancy Green | From Page: A4

Judy Zamora Rogers

By Susan Hiland | From Page: A4

 
.

Comics

For Better or Worse

By Daily Republic Syndicated Content | From Page: B10

 
Garfield

By Daily Republic Syndicated Content | From Page: B10

Baldo

By Daily Republic Syndicated Content | From Page: B10

 
Sally Forth

By Daily Republic Syndicated Content | From Page: B10

Peanuts

By Daily Republic Syndicated Content | From Page: B10

 
Pickles

By Daily Republic Syndicated Content | From Page: B10

Baby Blues

By Daily Republic Syndicated Content | From Page: B10

 
Get Fuzzy

By Daily Republic Syndicated Content | From Page: B10

Dilbert

By Daily Republic Syndicated Content | From Page: B10

 
Rose is Rose

By Daily Republic Syndicated Content | From Page: B10

Blondie

By Daily Republic Syndicated Content | From Page: B10

 
Beetle Bailey

By Daily Republic Syndicated Content | From Page: B10

Wizard of Id

By Daily Republic Syndicated Content | From Page: B10

 
Frank and Ernest

By Daily Republic Syndicated Content | From Page: B10

Zits

By Daily Republic Syndicated Content | From Page: B10

 
B.C.

By Daily Republic Syndicated Content | From Page: B10

Cryptoquote

By Daily Republic Syndicated Content | From Page: B11

 
Crossword

By Daily Republic Syndicated Content | From Page: B11

Word Sleuth

By Daily Republic Syndicated Content | From Page: B11

 
Sudoku

By Daily Republic Syndicated Content | From Page: B11

Bridge

By Daily Republic Syndicated Content | From Page: B11

 
.

Home Seller 12/20/14

Real estate transactions for Dec. 20, 2014

By Daily Republic | From Page: HSR2

Ask a Designer: decorating with Christmas trees

By The Associated Press | From Page: HSR2