Innumeracy precedes insolvency: Part 3, those who obfuscate, obstruct

December 6, 2012 | Bankruptcy, California, CalPERS, Cities, Local issues, Proposition 13, Public employee unions, Real estate taxes, San Bernardino, Subprime

By:David A. Smith


[Continued from yesterday’s Part 2 and the preceding Part 1.]


As we saw in yesterday’s Part 2, based on a clinical Reuters (November 13, 2012) story, if the only consequence of grossly over-benefiting the public employees of San Bernardino were to overpay them, then it would be excessive and nothing more.


What’s gonna happen?


That was the least of its consequences.  Worse was the polarization and paralysis of government:


Charles McNeely, who served three years as San Bernardino’s city manager after 13 years in the same post in Reno, Nevada, quit last March, citing the “toxic” atmosphere on the council.


It was easier in Reno: NcNeely


For example, there’s this tidbit I found elsewhere:


In October 2010, Penman, angry with how certain items had been agendized [Hideous word – Grammar police.] for the city council meetings in a way he thought favored Morris, had an argument with McNeely that came to the public’s attention. That same month, McNeely received a memo from police chief Keith Kilmer, a Morris ally, in which Kilmer alleged Penman had challenged him to a fight. McNeely diffused that crisis.


Heading off potential fistfights between the police chief and the city attorney is not normally part of a city manager’s job.


You can’t fight here, this is the war room!


He had warned repeatedly that without change, the city faced ruin.


Obviously, he was ignored – more than ignored, abused.


In a presentation to the city council in August 2010, he said spending was far outpacing revenue and predicted a budget deficit of $40 million for this fiscal year.


“I don’t know how you could come out of that meeting not understanding we had a serious problem,” McNeely said in an interview. “I told them, ‘You’re headed for trouble, it’s a train wreck. You can’t keep doing business this way.'”


Those who controlled the government were unwilling to hear the warnings until other departments started having to shrink severely:


[When patrol lieutenant Richard Taack retired at the age of 59], his 2009 income was nearly double that of the city’s entire street-sweeping department. In 2011, overtime pay alone for the police department – $2,766,175 – exceeded the total payroll of 12 other San Bernardino city departments, according to the Reuters analysis of payroll data.


Camden too got hooked on overtime.  If it was management oversight, then that is negligence and incompetence.  If it was union rules, that was undermining the very city these people were hired to serve.


“I can’t begrudge the man for receiving what he’s entitled to under the contract,” said David Green, the head road sweeper, who has seen his department cut to five people from 13 when he joined in 1995. But he said there should be a better balance between the safety forces and other departments. “Nobody wants to drive a car and have to hit a three-foot pothole.”


Indeed, potholes scar downtown San Bernardino. Many stores are shuttered. Abandoned lots sit unkempt.


Cracks in the parking lot are seen in front of the [dead] Carousel shopping mall in San Bernardino.


Since the bankruptcy filing, city finance officials have put forward proposals to close libraries, senior centers and a cemetery.


Years ago, San Bernardino had choices.  Now it has few of them.


Andrea Travis-Miller, interim city manager, told the council this summer that 250 non-safety positions had been eliminated in the past three years to save money – and implied that police and fire benefits were crowding out other essential services.


Since 2009, they’ve been eating their own


Of course they are.


The police and fire unions fiercely dispute the charge that large salaries and pensions are to blame for the predicament.


Scott Moss, head of the firefighters union, said 20 positions had already been cut from the fire department, leaving about 120 people.


Less than the fraction of overpayment represented by the generous “3.0 at 50” retirement scheme.


“There’s been mismanagement for years,” Moss said, over coffee in a local restaurant. He noted that Mayor Patrick Morris had majority support on the city council for six years until union-backed members regained a majority in March.


If on we could cut red ink and red tape as easily


Moss said he is sick of people blaming pensions. “You go to bankruptcy, you got to blame somebody. So they say it’s the benefits, it’s the overtime – it’s everybody but them,” Moss said. “But what have they been doing these last six years?”


They’ve been trying to cut your benefits, and you’ve been opposing their efforts, on the city, at the ballot box, and in court.


Mayor Morris, a 74-year-old former judge who’s been in office six years, is scathing about the power he says the unions have over much of the city council. The unions, he said, “wag the dog.” (Council members are paid just $50 a month for their service, but also receive a car allowance worth $600 a month).


Mayor Patrick J. Morris poses for a photo in San Bernardino, California, in this July 11, 2012 file photo.


He rejects Moss’s argument that he should take responsibility for the financial crisis. He is particularly critical of his two-time challenger for the mayorship, city attorney Penman, who he said “has blocked all efforts to reform the budget” on behalf of the unions.


James Penman, attorney general of San Bernardino city, talks to the media at the city council chambers, in this July 11, 2012 file photo.


Morris added: “I have no vote on the council. I can only veto a vote if it is 4 to 3. All I have is the power of persuasion.”


Which, as we’ve seen, is nothing to the power of special-interest self-interest.


All I can do is persuade: the other side can pay off


“I’ve told them a bunch of times to be far more conservative, not to be so generous with our unions, and it’s advice they have largely ignored.”


And they’re still ignoring it:


Moss, 46, a fire paramedic, said he might retire at 53.


Tough duty, to be able to retire at 53.


Payroll records show a base pay of $94,500, and total 2011 wages, with overtime, of about $147,000. Moss confirmed the base figure but didn’t comment on the overtime number.


Isn’t it typical that people who are the most aggressive in blaming others always want to hide something?


And it’s your fault, too


On sick-pay cash-outs, Moss said: “If you call in sick, you’re a bad employee.”


Oh?  Or is that only when you call in falsely sick?


“So my guys don’t call in sick. Then you get all this time you are owed – and you get vilified.”


He added: “This is a dangerous city. It’s an old, decayed city. It burns. There are gangs. The pay and benefits attract the police and firefighters it needs. Without them, you lose all the good ones. That’s the balance.”


Ask Camden whether the pay and benefits were necessary to attract the good police.  For that matter, how good are the San Bernardino police?


As for me, I don’t like the job they’re doing


Crime and gangs are real dangers in San Bernardino. In 2010, according to Federal Bureau of Investigation data, the rate of known violent crimes – 8.15 per 1,000 people – was higher than in any other city in the region.


A five-minute drive from city hall, on a residential street, sit flowers and homemade signs next to a picture of Angel Cortez. The 22-year-old was shot in the back of the head in May in what police suspect was a “gang-related” murder. His body was found in the backyard of a vacant home. His killers had first tried stuffing his body into a trash can, then returned to dig a hole, before unsuccessfully attempting to burn his body, police said.


A memorial for 21-year-old Angel Cortez is seen in front of the home in which he was murdered in San Bernardino.


As so often happens, fiscal collapse has preceded physical and societal collapse.  As Detroit turns off lights on streets it can no longer maintain, or Cleveland pays people to demolish houses that have negative value, the body politic loses its legitimacy and its purpose.


Morris isn’t running for re-election when his term expires a year from now. “The politics of this place are and have been for decades mean-spirited, divisive, and it’s corrosive to the extreme,” he said.


The corrosive politics enable the continuing overspending and private-interest benefit that has led San Bernardino to insolvency – and it’s not an isolated incident, but a municipal epidemic:


The chronic mismanagement in San Bernardino is a common feature of local government in California and around the United States.


San Jose, hub of Silicon Valley, and San Diego, biotech center of California, both passed pension reforms in June in the face of unmanageable retirement benefits. They are now defending those measures in court against public-employee lawsuits.


Many interest groups care only about their members, not about the health of the body politic.


Much power over municipal finance lies in the hands of those with the most at stake — city employees, elected officials and others who depend directly on government for their livelihood.


Like our deepest villain of the piece: the former 800-pound gorilla.


Why are you coming to me last, anyway?


[Concluded tomorrow in Part 4.]