Measure B requires two-thirds’ voter support. If adopted, it would provide $19 million a year, up from the present $15 million.

The selling points for the measure build off the idea that the community college has turned the corner from its recent problems with the Accrediting Commission for Community and Junior Colleges, which has voiced concerns since 2011 that the college has few internal financial controls, has spent money in unfocused ways and has provided inadequate student services. Voters are also told that CCSF is actively trying to shore up its funding by recruiting foreign students — especially from Asia — who pay far more in tuition, much as the University of California system did beginning 10 years ago.

But Measure B critics offer evidence that undercuts the assertion that the college’s biggest problems are mostly behind it.

The accreditation commission still has not given its blessing to CCSF; a final decision on whether to revoke accreditation is expected in January. And claims that CCSF had developed much better financial controls were undercut by a December 2015 San Francisco Chronicle report that detailed seemingly profligate spending by college officials.

While college trustees defended President Virginia Parras’ trip to China, Taiwan and Vietnam as a smart student recruitment effort, the Chronicle found heavy spending by school officials at local restaurants with little documentation of any benefit that accrued to CCSF. Such documentation is supposed to be mandatory and seems certain to be viewed by the accreditation commission as evidence its years of admonitions have not worked.

Enrollment plunging and faculty fleeing

The Chronicle reported this month that the accreditation flap had taken a harsh toll on enrollment, which has plunged from 84,000 full- and part-time students in 2012 to the present 62,000. Meanwhile, state aid meant to help stabilize the college is going away. After getting a total of $69 million last fiscal year and this fiscal year, CCSF has been told to expect no such funding in 2017-18.

But CCSF’s headaches don’t stop there. The high cost of housing is making it difficult for the college to attract and retain teachers and staff. The extra $4 million that the new version of parcel tax would generate annually is going to be used to address this problem.

One of the strategies that state officials have undertaken to help CCSF caught the eye of Inside Higher Education, a national journal. In January, it noted that the California Community College’s Board of Governors endorsed dropping the Accrediting Commission for Community and Junior Colleges as the agency handling accrediting for CCC’s 113 campuses based on a critical report from a CCC task force.

The move prompted criticism from one accreditation veteran, noted Inside Higher Education. 

“There’s no short-term solution other than CCSF getting its act together and getting accredited by [Accrediting Commission for Community and Junior Colleges], and it appears the commission is hanging tough and not changing its position,” said Ralph Wolff, former president of the WASC Senior College and University Commission, the main community college accrediting oversight agency in the Western U.S.

The unusually complex background to the Measure B vote may make its approval unlikely. But there’s another daunting factor facing proponents: In addition to the 17 state ballot measures on the Nov. 8 ballot, San Francisco voters will be asked to consider 25 city and regional ballot measures. Most election observers think the more decisions that more voters have on ballot measures, the more likely they are to vote no — or to not vote at all — on many proposals.

Striking a deal

Losing police to other jurisdictions, Mayor Sam Liccardo faced “enormous pressure to reach a settlement,” according to Scott Herald at the San Jose Mercury News. In fact, wrote Herald, Liccardo “could legitimately argue that the city had achieved concessions in negotiations, obtaining savings he estimated at $1.7 billion over 30 years. San Jose was able to save millions by foregoing the so-called ‘bonus checks’ to employees. And the city and its public safety unions agreed on a cheaper health plan.”

In an unusual move, the City Council successfully petitioned the courts to invalidate the measure, paving the way for a renegotiated deal with law enforcement. Under the terms of the new wage agreement, the Mercury News reported, police officers will receive “8 percent in ongoing raises and 5 percent one-time bonuses.” But the fate of the deal remained in the hands of voters, who would have to approve the Measure B replacement at the ballot box in 2016.

For now, however, the city has at least managed to settle its three-year court battle with police and firefighter unions, as San Jose Inside observed. And it stanches its law enforcement losses, which were approaching crisis proportions. “Since 2012, SJPD has had 265 officers resign and 167 retire,” according to San Jose Inside. “This year alone, the department has seen 41 resignations and 54 retirements, leaving the agency with 943 sworn officers out of a budgeted 1,109 positions.”

Taking it statewide

But former Democratic Mayor Chuck Reed, along with former Republican San Diego City Councilman Carl DeMaio, continue to back a controversial ballot initiative that threatens to complicate the issue of pension costs by offering California voters a new statewide approach.

According to its authors, the matter is cut and dry: “This simple initiative gives voters the ability to stop sweetheart and unsustainable pension deals that politicians concoct behind closed doors with government union bosses,” the two said in a joint statement, according to the Sacramento Bee. “That’s why the politicians and union bosses oppose this initiative – and why they continue to try to mislead the public on what the initiative does.”

But Attorney General Kamala Harris, one of the targets of their criticism, emphasized its potentially destabilizing consequences in her office’s title and description of the initiative. According to that language, the initiative “eliminates constitutional protections” for collective bargaining, bringing “significant” savings, but also costs, for state and local government.

“In addition to allowing voters to weigh in on public employee compensation,” the Bee summarized, “the initiative would mandate that voters approve any increases in pension benefits, sign off on new state and local employees being enrolled in the ‘defined-benefit’ plans that are now commonplace, and OK governments covering more than half of retirement costs.”

Trusting the voters

For activist opponents of the Reed-DeMaio plan, however, Harris should have portrayed the measure in an even less flattering light. By any measure, the scheme raises the prospect of fewer pension programs. “Requiring a vote by each government body to continue letting new employees into pension programs could very likely fail,” Reason noted, “requiring the state and municipalities to switch to 401(k)-style defined contribution retirement funds instead (which don’t require a vote).”

“This switch is important for spending reform because it takes governments (and taxpayers) off the hook for a guaranteed return. Governments would be providing all their contributions at the front end and would not be obligated to make up for any below-expected returns from these funds like they would with a pension.”

Analysts have not yet determined how great a departure from the status quo future votes might entail. “The effects on collective bargaining could be dramatic,” wrote Orange County columnist Teri Sforza. “And due to the less-generous retirement benefits that would likely emerge, governments would face pressure to increase other elements of compensation to attract and retain workers.” Like other measures that have passed through California’s initiative process, this one would put Golden Staters’ appreciation for direct democracy to the test.

Last week, after a three-year court battle, the police and fire unions finally accepted a compromise that preserves most of the reforms backed by voters. The San Jose Mercury-News has some key details:

[The] city viewed Measure B as a way to control skyrocketing retirement costs that had more than tripled after benefit increases in the late 1990s and devoured funds for services. The measure called for current employees to pay more into their pensions, eliminated bonus checks for retirees, established scaled-back benefits for new workers and stricter disability provisions.

 

The proposed settlement would roughly maintain most parts of the measure already enacted, such as eliminating bonus checks for retirees and scaled-back pensions for new hires while abandoning provisions blocked by a trial judge’s 2013 ruling or which the council had not enacted, such as higher pension contributions from workers and some disability changes.

Concession opposed by many retirees

The fact that San Jose negotiators won unions’ acceptance of the end to so-called “13th checks” to pensioners in years in which pension fund returns were high is a major development on the pension reform front. In San Jose and many other local governments with such policies, current workers and retirees had argued that this amounted to a vested benefit that couldn’t be revoked — even if it were never collectively bargained.

CalPensions’ Ed Mendel wrote about the practice in 2013 and noted that what may nowadays seem illogical and unsustainable — giving retirees more money when a pension fund portfolio does well, but not giving them less money when that investment portfolio has a bad year — is a hangover from a past California where officials couldn’t fathom the idea of hugely underfunded pensions someday being a major problem.

Declaring earnings excess or surplus might have been a backdoor way to give employees more money and employers short-term budget relief, knowing from the outset future generations were likely to get a larger pension bill.

 

But whatever the cause, treating investment earnings as an excess or surplus, in ways large and small, has skimmed off money that could have been invested, adding to pension debt rather than lowering it.

One reason why some retiree groups held out hope that “13th checks” might win court muster was because they were not explicitly banned going forward by Gov. Jerry Brown in the 2012 pension reform law he shepherded to passage. The argument was this amounted to a de facto concession to these checks being a vested right.

But as the conclusion to the San Jose litigation indicates, police and fire union lawyers apparently no longer believed they had a case to sustain the “13th checks.”

Where the “13th checks” keep coming

In San Diego, meanwhile, the practice lives on. City officials — including many who played key roles in the crafting and adoption of a pension reform ballot initiative that passed on the same day as San Jose in 2012 — believe the right is vested. This is from a November 2013 Union-Tribune story.

A holiday season bonus is back for San Diego city employee pensioners, in the form of a “13th check” for the year that averages $720 per retiree.

 

The extra cash will be paid out to some 7,700 people next week, totaling $5.5 million, even though the system’s long-term shortfall in meeting pension obligations is $2.3 billion.

 

The payments apply only to city workers hired before mid-2005 but have grown in recent years as more people hired before that have retired and lived longer. …

 

This year the system said it had realized investment earnings of $241.7 million, compared to certain costs of $150.7 million. That left a balance of $91 million sufficient to trigger the payment of the 13th check.

Commentary

June 4, 2012

By Wayne Lusvardi

Two big pension reform measures are on Tuesday’s ballots in San Jose and San Diego. For advancing the measures, the cities’ mayors are being lionized: Democrat Chuck Reed in San Jose and Jerry Sanders in San Diego.

Budget expert David Crane called Reed “the most courageous leader in California.”  But are Reed and Sanders’ actions like those of a courageous lion– or a clever fox?

This is the question that 15th Century political thinker Niccolo Machiavelli once tried to answer.  His advice to politicians was that they should try to be perceived as a lion, while at the same time being clever as a fox.  A leader must avoid being despised and should be a master of deception.  And the way to best do this was for a leader to be a sort of half-breed of a lion and a fox.

A No-Lose Proposition 

There is no better way to avoid being despised in California by either pension advocates or reformers than to put the contentious issue of municipal pension reform on the ballot in a low turnout primary election.

If the reform effort fails, those who sought reform will nonetheless still praise — lionize — both mayors for their virtuous effort in attempting to get reform.

At the same time, public employee unions will likewise not scorn a mayor for putting a pension reform measure on a primary ballot where it can be more easily defeated.  Reportedly, in San Jose unions weren’t vigorously fighting the pension-reform measure.  Instead, the unions are gearing up for a court fight where they believe they will prevail. And the history of California is full of court cases that invalidated the will of the voters.

Putting pension reform on the ballot is a no-lose proposition for local politicians.

Low Voter Turnout in Union’s Favor

As Joel Fox points out at his website Foxes and Hounds, voter turnout is likely to be low.  Fox cites California election watcher Tony Quinn who co-edits the California Target Book – which profiles each candidate and proposition in upcoming elections – as forecasting a voter turnout under 30 percent of registered voters statewide.  It almost goes without saying that a low voter turnout favors unions who are opposed to pension reform and the most organized in getting the vote out.  If the two pension reform efforts fail the Democrats and unions will hail this as indicating public opinion has turned against pension reform.

Polls Trending Toward Reform?

Statewide opinion polls have shown consistent support for public pension reform.  But even if the pension reform proposition passes in San Jose, Mayor Reed is going to seek a pre-emptive judicial review.

An opinion poll in May showed the San Diego pension reform measure leading widely in a poll with 52 percent support and 29 percent opposed.  But 19 percent were reportedly undecided.  With this high of an undecided count the poll isn’t considered that reliable.

A CBS Channel 5 poll in San Jose found that the pension reform was leading in San Jose a few days before the election. But that poll was reportedly only of a sample of a little over 400 likely voters —  typically not enough to be considered for a reliable poll result.

Beware Pension Reform Foxes

Are the unions relying on a low profile before the elections hoping to snatch victory from defeat?  Are Democrats hoping to use the election to catapult pension reform into the courts where they hope to get the result they want?  We don’t know.

Machiavelli warned that you should not rely on the promises of leaders. Politicians will present the appearance of being courageous as a clever ploy.  As long as a leader appears to act courageous voters will likely judge their leader on appearance.  Leaders often delegate or appeal the implementation of unpopular policies to the courts or bureaucracies so as to keep their own power over the distribution of favors.

History is full of revolutions and reforms being ripped off by the foxes from the courageous lions.