State Pension Fund Has Best Year Since 1997

Hold on to those petitions to gut police and fire pensions, Mayor Morris. The California Public Employees Retirement System (CalPERS) just had its best year since Bill Clinton was President.

English: Official White House photo of Preside...

California’s pension fund has best year since Bill Clinton was president(Photo credit: Wikipedia)

The Los Angeles Times reports the CalPERS pension fund earned an amazing 16.2% return on its investments in 2013:

The California Public Employees’ Retirement System, which provides benefits to about 1.7 million state and local government workers, retirees and their dependents, said its total investments were worth $282.6 billion as of Friday, the highest ever.

Better known as CalPERS, the country’s biggest public pension fund was especially helped by the stock market’s best year since 1997. Among its holdings, publicly traded shares did best; bonds and commodities did the worst.

The results for 2013 capped a wild ride for the agency over the last 11 years. The fund was especially hard hit during the Great Recession of 2007-09. In 2008, amid the depths of the worst global economic slowdown in half a century, the fund lost 27.8% of its value.

Since then, it has climbed back. In 2011, the fund’s increase in value was a mere 1.1%. For 2012, the rate of investment growth was up to 13.3%. By early 2013, the total value of the fund officially surpassed its pre-recession high.

CalPERS’ overall rate of return for 2013 was more than twice the 7.5% minimum that the fund’s board has said it needs to meet current and future obligations to retirees.

This is great news for cities like San Bernardino because higher investment earnings generated by CalPERS equates to lower pension contributions for cities.

Pension hypocrites like outgoing Mayor Pat Morris will most likely try to minimize this news as it undermines his effort to decimate the CalPERS pension system.

But as the LA Times article also states:

“This definitely takes some of the wind out of the sails of critics,” said Steve Maviglio, a spokesman for Californians for Retirement Security, a coalition of 1.6 million government workers and retirees. CalPERS’ new report makes it “hard to make the case that the sky is falling with returns like that.”

Appeal of San Bernardino’s Bankruptcy May Move Forward

Just when you thought things were going pretty hunky dory with San Bernardino’s bankruptcy, an appeal of the city’s eligibility has been approved.

The Sun reports:

 

U.S. District Judge Dolly Gee agreed Friday to let San Bernardino’s largest creditor appeal directly to the 9th Circuit Court of Appeals, opening another front in the battle between the city and the California Public Employees’ Retirement System.

9th US Court of Appeals - Night

9th US Court of Appeals – Night (Photo my canadian pharmacy online credit: KN6KS)

If the 9th Circuit agrees to take the case, CalPERS will argue that U.S. Bankruptcy Judge Meredith Jury was wrong when she decided in August that the struggling city qualified for bankruptcy protection.

Meanwhile, Jury will continue overseeing the bankruptcy case, and U.S Bankruptcy Judge Gregg Zive will continue leading mediation sessions that reportedly are progressing well.

As Jury herself said, that progress could stall if CaLPERS or other parties decide they’re better off dragging their feet or focusing attention on the appeals process, argued the city’s bankruptcy attorney, Paul Glassman of Stradling Yocca Carlson & Rauth.

CalPERS has consistently argued that the City of San Bernardino is not eligible for bankruptcy protection. Just as consistently, CalPERS arguments have been denied and the bankruptcy process moved forward.

CalPERS celebrated this recent legal victory:

Redlands and Riverside Mayors Oppose Pat Morris Pension Scheme

Redlands and Riverside are two cities people often suggest San Bernardino should try to imitate.

One should therefore take notice when the mayors of these two inland cities speak out against a proposal being backed by failed San Bernardino Mayor Pat Morris.

Redlands and Riverside Mayors have told Pat Morris to drop his pension initiative.

Redlands and Riverside Mayors have told Pat Morris to drop his pension initiative.

Last week Redlands Mayor Pete Aguilar and Riverside Mayor Rusty Bailey joined with over a dozen California local elected officials stating their opposition of a proposed statewide initiative to gut pensions and healthcare benefits across California.

San Jose Mayor Chuck Reed is headlining the flawed pension initiative that he created with the assistance of Mayor Pat Morris.

Pete Aguilar, Rusty Bailey, and the other local government leaders sent a letter to Chuck Reed asking him to drop the proposed initiative.  They are quoted as writing:

“Like most Californians, we believe pension matters are best decided locally at the bargaining table rather than the ballot box,” wrote the mayors. “Our cities have been successful in doing just that – as have the overwhelming majority of those in California.”

According to the CalPERS, more than 386 jurisdictions have negotiated more than 538 changes to pension benefits, producing hundreds of millions in savings through higher employee contribution levels, reduced employer costs and reduced benefits. “We believe that engaging our public servants in constructive dialogue rather than political battles is a more effective way of achieving balancing budgets,” wrote the elected leaders.

“We also are extremely concerned about several specific provisions of your measure that will likely increase costs to California’s cities by hundreds of millions of dollars. We believe those dollars are better spent on local services and attracting and retaining quality public employees, providing services to our city than in reducing their retirement security.

“Last year, Governor Brown and the Legislative enacted sweeping pension measures that will save our communities and the state nearly $100 billion. Combined with the actions we are taking in our communities, we believe this will address the concerns about retirement benefits that your measure proposes to address. As a result, we urge you to withdraw your measure and engage with us in constructive dialogue with public employees to address the pension challenges facing our communities.”

It is very telling when the mayors of two nearby, prosperous inland cities call out the Mayor of San Bernardino for pushing a flawed ballot measure that will likely increase costs to cities – not lower them.

The message from Mayors Aguilar and Bailey to Pat Morris is clear:  Just because you ruined your city, doesn’t mean you have to force us to ruin ours.

Pensions Did Not Cause San Bernardino Bankruptcy

There is a a political narrative in San Bernardino spread by Mayor Pat Morris and his anti-public safety allies on the City Council that the pensions offered to Police Officers and Fire Fighters is the main reason the City had to declare bankruptcy.

That is an untrue fiction perpetrated by the Morris political faction to deflect blame away from the Pat Morris’s failures in office and to fuel support for the dangerous cuts Pat Morris and his cronies would like to impose on public safety in San Bernardino.

In November 2012, a study compiled by researchers at the University of California, Berkeley concluded “a high per-capita ratio of police cuts down on violent crime, and saves money.”

The study pointed out “that each dollar spent on police is associated with approximately $1.60 in reduced victimization cost.”

It then went on to rank the 30 most under-policed cities in the United States. San Bernardino came in at #19.

Not in California, but in the United States!

Please note San Bernaridno filed bankruptcy only the months before, and the “exodus” of sworn officers and civilian staff had not even begun to heat up. So the numbers released in the study are “pre-bankruptcy.”

Since that time, Mayor Morris and his City Council Majority attempted to sell the San Bernardino Police Department, and promised the same with the Fire Department.

Returns on Pension Investments Exceed Expectations

Mayor Pat Morris and his cronies on the San Bernardino City Council who blame the City’s financial troubles on public safety pensions had an icy cold glass of water splashed on their propaganda today.

CalPERS – the retirement system for San Bernardino’s Police Officers and Fire Fighters, reported this morning that it’s investment portfolio earned a 12.5% rate of return for the fiscal year that ended on June 30, 2013.

That return is 1.5% higher than CalPERS had expected.

Is San Bernardino Mishandling Its Bankruptcy?

Mayor Pat Morris and his allies have mismanaged the City of San Bernardino into bankruptcy.

Are they also mishandling the San Bernardino’s bankruptcy itself?

That’s the assertion made in an article by San Joaquin County news site, Recordnet.com on May 27, 2013.

The article compares the differences between the way Stockton and San Bernardino have gone about bankruptcy.  The article asserts:

If there’s a right way to go about municipal bankruptcy, Stockton may prove to be the poster child. If there’s a wrong way, look to San Bernardino.

How San Bernardino Really Got Here

An open letter to the people of San Bernardino from Steve Desrochers, chairman of the San Bernardino Police Officers Association Political Action Committee.

Dear San Bernardino residents:

These are tough times for our city.

Times such as these call for strong leadership and a truthful assessment of the situation we are facing.

Unfortunately, both of those qualities are found lacking in Mayor Pat Morris and his supporters on the City Council.

On behalf of the San Bernardino Police Officers Association, I wanted to take the time and set the record straight about how many things got to where they currently are in the City of San Bernardino.

If you were to listen to Mayor Pat Morris and his cronies, they would have you believe that the bankruptcy of the City of San Bernardino has nothing to do their mismanagement of the city government.

They want you to believe the reason they had to declare bankruptcy is because of the cost of public employee pensions – specifically those of the San Bernardino’s police officers and fire fighters.

That is blatantly untrue and they know it.

San Bernardino Makes $22.6 Million Math Error

A federal court hearing on the City of San Bernardino’s bankruptcy claim appears to have uncovered an unbelievable $22.6 million accounting error.

According to Reuters, an attorney for San Bernardino’s largest creditor, CalPERS “asserted in a court hearing on Tuesday that the city had $26.8 million in the bank as of January of this year – far more than the $4.2 million that the city said it had on hand.”

The $22.6 difference between $4.2 million and $26.2 is enormous.

It’s a 538% discrepancy!

That needs to be explained to people of San Bernardino.

San Bernardino Skips $6 Million of Pension Payments

The Press-Enterprise has reported that the City of San Bernardino has missed missed about $6 million in payments to the California Public Employees Retirement System (CalPERS).

On Wednesday, October 24th CalPERS objected in federal court to San Bernardino’s bankruptcy filing.

The PE reports:

The state’s public employee pension fund filed an objection to the city of San Bernardino’s bankruptcy petition Wednesday, Oct. 24, according to court documents

CalPERS, which has criticized the city in recent days for missing about $6 million in pension payments, was the most prominent creditor to file an objection to the city’s bankruptcy petition by the 5 p.m. Wednesday deadline.

However, it wasn’t clear if all the objections had been processed and made available on the U.S. Bankruptcy Court website. Other objections were filed by a San Bernardino city employees union, two retirees, a prison inmate and the owners of a strip club.

San Bernardino’s Fire Fighters and Police Officers Associations did not file objections to the City’s bankruptcy filing.

The PE did however report that “the city entered into an agreement filed Tuesday, Oct. 23, with the San Bernardino City Professional Firefighters in which the union agreed not to object but will be allowed to present evidence in proceedings regarding the city’s solvency.”

 

Vallejo Ended Bankruptcy Paying More For Pensions

Previously we posed the question, is Vallejo better after bankruptcy?   Last year the site CalPensions published the following report showing that the City of Vallejo actually wound up paying more for pensions after than emerging from federal bankruptcy court then before the City declared bankruptcy.

Vallejo got court approval to exit from bankruptcy last week with a plan that includes a sharp increase in pension payments to CalPERS — the opposite of what many expected when the city declared bankruptcy in May 2008.