Thursday, October 2, 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

Head-on crash sends 2 to trauma centers

By Amy Maginnis-Honey | From Page: A1, 6 Comments | Gallery

 
 
Vacaville man earns Carnegie heroism medal

By Ian Thompson | From Page: A1 | Gallery

 
Mundy fifth-graders share their thoughts

By Mayrene Bates | From Page: A2

 
Veterans meet set in November

By Susan Hiland | From Page: A3

 
Solano Tea Party Patriots meet next week

By Susan Hiland | From Page: A3

Bevy of vintage warbirds expected at Nut Tree air show

By Ian Thompson | From Page: A3 | Gallery

 
 
Suisun City police log: Sept. 30, 2014

By Susan Hiland | From Page: A12

Weather for Thursday, Oct. 2, 2014

By Daily Republic staff | From Page: B12

 
Fairfield police log: Sept. 30, 2014

By Susan Hiland | From Page: A12

.

US / World

FBI turns animal cruelty into top-tier felony

By The Associated Press | From Page: A3

 
California Catholics challenge abortion order

By The Associated Press | From Page: A4, 3 Comments

San Francisco expands free public Wi-Fi access

By The Associated Press | From Page: A4, 1 Comment

 
Judge: Stockton must treat pension like other debt

By The Associated Press | From Page: A4

Mexico’s probe of army slayings raises doubts

By The Associated Press | From Page: B5

 
John Wayne’s heirs lose ‘Duke’ legal brawl

By The Associated Press | From Page: A5

Hong Kong protesters threaten to occupy buildings

By The Associated Press | From Page: B5

 
Man convicted of murder in killing over loud music

By The Associated Press | From Page: B5, 4 Comments

3 Afghan soldiers who fled say they can’t go home

By The Associated Press | From Page: B5

 
Poll: Divided voters still focus on economy

By The Associated Press | From Page: B5

Respiratory virus seen in 4 deaths; role unclear

By The Associated Press | From Page: B5

 
920 California chickens killed with golf club

By The Associated Press | From Page: A5, 2 Comments

Liberia short on ambulances for Ebola patients

By The Associated Press | From Page: B5

 
Wife of slain Los Angeles-area mayor released

By The Associated Press | From Page: A5

Ebola patient told hospital he was from Liberia

By The Associated Press | From Page: B5

 
Caltrans: Bay Bridge tower rods exposed to water

By The Associated Press | From Page: A5

Secret Service chief quits due to security lapses

By The Associated Press | From Page: B5

 
2 children in Los Angeles County have enterovirus

By The Associated Press | From Page: A5

Palestinians: Israeli occupation must end in 2016

By The Associated Press | From Page: B5

 
Infant’s body found in California trash facility

By The Associated Press | From Page: A5

App teaches kindergartners basic computer coding

By The Associated Press | From Page: A12

 
2 white Ohio women sue over sperm from black donor

By The Associated Press | From Page: A12, 1 Comment

.

Opinion

 
Editorial Cartoon: Oct. 2, 2014

By Daily Republic Syndicated Content | From Page: A11, 1 Comment

Crazy? Violent? Lose your guns

By Kelvin Wade | From Page: A11, 3 Comments

 
It’s time to teach history

By Jay Ambrose | From Page: A11

Read this column ASAP or immediately

By Reg Henry | From Page: A11, 2 Comments

 
Real reasons neighborhoods are in trouble

By Letter to the Editor | From Page: A11, 2 Comments

.

Living

Today in History: Oct. 2, 2014

By The Associated Press | From Page: A2

 
Community Calendar: Oct. 2, 2014

By Susan Hiland | From Page: A2

Horoscopes: Oct. 2, 2014

By Holiday Mathis | From Page: A9

 
Our son’s suicide has made us feel like outcasts in our community

By Kathy Mitchell and Marcy Sugar | From Page: A9

.

Entertainment

TVGrid

By Daily Republic Syndicated Content | From Page: B6

 
Lena Dunham launches tour for book of adult essays

By The Associated Press | From Page: A7

‘Interstellar’ to be released 2 days early on film

By The Associated Press | From Page: A7

 
Steinem: Domestic violence discussion a positive

By The Associated Press | From Page: A7

‘Orange is the New Black’ author talks Season 3

By The Associated Press | From Page: A7

 
Joy Behar to debut a 1-woman show in New York

By The Associated Press | From Page: A7

Tony Bennett sets mark as oldest act with No. 1 LP

By The Associated Press | From Page: A7

 
.

Sports

Bumgarner, Giants silence Pirates 8-0 to advance

By The Associated Press | From Page: B1 | Gallery

 
A’s part ways a day after 12-inning loss to Royals

By The Associated Press | From Page: B1 | Gallery

49ers prepare for familiar face in Chiefs Smith

By The Associated Press | From Page: B1 | Gallery

 
Raiders leave for bye after meeting with new coach

By The Associated Press | From Page: B1 | Gallery

College notebook: Former Falcon Williams tearing it up as Torero

By Paul Farmer | From Page: B1 | Gallery

 
Prep water polo: Rodriguez boys swim to 11-1 win over Armijo

By Daily Republic staff | From Page: B2

Prep girls tennis: Stybnarova earns victory at No. 1 singles

By Daily Republic staff | From Page: B2

 
 
Prep cross country: Armijo rolls to sweep at MEL center meet

By Daily Republic staff | From Page: B2

Drivers fear next round of NASCAR’s Chase

By The Associated Press | From Page: B2 | Gallery

 
JC volleyball: Solano wins twice in Falcons Classic

By Daily Republic staff | From Page: B2

JC women’s soccer: Sjoberg nets 2 goals as Solano ties Chabot

By Daily Republic staff | From Page: B2

 
Trout makes playoff debut when Angels host Royals

By The Associated Press | From Page: B3 | Gallery

 
Tigers hope starters can outdo Orioles bullpen

By The Associated Press | From Page: B3

Wambach, players file lawsuit over World Cup turf

By The Associated Press | From Page: B3

 
Oslo latest city to drop out of 2022 Olympic race

By The Associated Press | From Page: B3

Cardinals re-sign Fairfield High graduate Bishop

By Staff and wire reports | From Page: B3

 
LeBron warmly welcomed ‘home’ by Cleveland fans

By The Associated Press | From Page: B3

This date in sports history for Thursday, Oct. 2, 2014

By The Associated Press | From Page: B4

 
.

Business

Stocks start October with a drop

By The Associated Press | From Page: B6

 
GM looks to new vehicles, China to boost profit

By The Associated Press | From Page: B6

5 reasons bonds may be less safe than you think

By The Associated Press | From Page: B7

 
Why the bond market is more fragile than you think

By The Associated Press | From Page: B7

.

Obituaries

John ‘Bo’ M. Miller

By Nancy Green | From Page: A4

 
Laura M. Gerdes-Lemmons

By Nancy Green | From Page: A4

.

Comics

Sally Forth

By Daily Republic Syndicated Content | From Page: A8

 
Peanuts

By Daily Republic Syndicated Content | From Page: A8

Beetle Bailey

By Daily Republic Syndicated Content | From Page: A8

 
Dilbert

By Daily Republic Syndicated Content | From Page: A8

Rose is Rose

By Daily Republic Syndicated Content | From Page: A8

 
Get Fuzzy

By Daily Republic Syndicated Content | From Page: A8

For Better or Worse

By Daily Republic Syndicated Content | From Page: A8

 
Zits

By Daily Republic Syndicated Content | From Page: A8

Baldo

By Daily Republic Syndicated Content | From Page: A8

 
Baby Blues

By Daily Republic Syndicated Content | From Page: A8

Wizard of Id

By Daily Republic Syndicated Content | From Page: A8

 
Garfield

By Daily Republic Syndicated Content | From Page: A8

Pickles

By Daily Republic Syndicated Content | From Page: A8

 
B.C.

By Daily Republic Syndicated Content | From Page: A8

Frank and Ernest

By Daily Republic Syndicated Content | From Page: A8

 
Blondie

By Daily Republic Syndicated Content | From Page: A8

Sudoku

By Daily Republic Syndicated Content | From Page: A9

 
Word Sleuth

By Daily Republic Syndicated Content | From Page: A9

Crossword

By Daily Republic Syndicated Content | From Page: A9

 
Bridge

By Daily Republic Syndicated Content | From Page: A9

Cryptoquote

By Daily Republic Syndicated Content | From Page: A9