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.

They then learned that the SBPD, as staffed at that time was a real value to taxpayers.

The Sheriff’s Department proposal to provide contract policing services was $8 million than the total cost of running the SBPD and would have provided less officers on the streets, longer response times and fewer services.

Having reached a “peak” in staffing levels at approximately 350 sworn police officers before filing bankruptcy, the effects of the majority of our elected officials decision to “cut, cut, cut” their way out of the debt they themselves piled on the taxpayers, leaves our community in a really bad way.

The SBPD currently staffs under 260 sworn officers, and is probably closer to 255.

When all of this started, Councilmembers Fred Shorett and Virginia Marquez, blasted public safety pensions as the root cause of the bankruptcy. They did not make an issue of the CalPERS pensions that each of them receive at taxpayer expense for being on the council in a part-time capacity.

Virginia Marquez also receives a full CalPERS pension from her previous career.

Policing in California, like everywhere else in the United States provides a necessary service, but does come with a cost.

In San Bernardino, unlike in other cities, wages are not the issue. Police wages are capped by the City Charter and by law can never exceed the “average of 10 like sized communities.”

While some argue wages should be capped at the average of the communities with a similar economic base there’s a big problem with that argument.

Issues that are directly controlled by the Mayor and City Council such as poverty, persistent unemployment, business investment, development and owner occupied housing impact the overall economic base of the community.

If wages were capped at the level that the Mayor and the Council Majority has brought this community to, San Bernardino would not be able to sustain employment in Law Enforcement. The department would close, the Sheriff would take over and it would cost taxpayers about $8,000,000 more per year  – for less officers and fewer services.

Combine that with the poorly thought out Prison Realignment plan of Governor Jerry Brown that has resulted in dangerous felons being returned to the streets by the thousands and you have a recipe for disaster.

Another public safety study by Ohio State University  found that “a bad labor market has a profound impact on the crime rates.”

Though the strongest finding in the study was a “link between falling wages and property crimes, such as burglary” it also uncovered a link between “wages and some violent crimes- such as assault and robbery- in which money is often a motive.”

A brief look at  these crime categories, as well as the issues of unemployment, poverty and owner occupied housing show how these factors come together to impact public safety.

Unemployment Poverty Owner Occupied Housing Burglary Assault Robbery
San Bernardino 21.8% 31.3% 13.2%  2,359 1,034 720
Inland Empire 16.6% 17.4% 17.9%  972 287 198
(Sources: FBI.gov and Factfinder.census.gov)

 

These figures reflect the status of San Bernardino before the bankruptcy and before the prison realignment program. They are also before the Police Department lost more than 30% of it’s sworn officer staffing.

It’s easy to see how the Great Recession, Prison Realignment, the policies of Mayor Pat Morris and Council Majority, and the City’s bankruptcy combined to form the “perfect storm,” leaving San Bernardino with fewer police officers and escalating crime rates.

The California Public Employees Retirement System (CalPERS) is part of the executive branch of California government and manages public employee pensions for more than 1.6 million employees and retirees –  even San Bernardino’s mayor and part-time city councilmembers.

As of March 31, 2013, CalPERS managed the largest public pension fund in the United States with $257.4 billion in assets and derives its income from investments, from member contributions, and from employer contributions.

On July 15, 2013,  Reuters reported CalPERS made a 12.5 % return on assets for the 12 months ended June 30. CalPERS stated that the return outperformed its internal benchmark by 1.5 percentage points and topped its 1 percent return for the year-earlier period.

The return was also above its 7.5 percent  target used to set contributions from government employers. CalPERS’ yearly rates of return, once audited, will help determine contribution levels for state agency employers in fiscal 2014-15 and for contracting cities, counties and special districts in fiscal 2015-16, the pension fund said.

Based on these returns it seems clear that we can anticipate that the cost for maintaining the current pension plan employed by the City of San Bernardino will go down in the coming fiscal years. The issue will then be exactly what it was prior to the Great Recession.

Will the governing majority become fiscally responsible during the “good economic years” and cover their responsibilities to both the employees and taxpayers by expanding the business, investment and development base in San Bernardino?

Or will these career politicians continue to spend, spend, spend on such unnecessary extravagances as SBX , hiring convicted felons to run our the San Bernardino Airport, inviting the homeless into our community then spending to provide increased numbers of low income housing?