votng by Pascal, http://www.flickr.com/photos/v50/3596102006/in/photostream/
By Councilmember Libby Schaaf, Jim Blachman, CFA, and Jay Ashford, PMP CSM
Measure J, one of the three measures on Oakland’s November 15 special election ballot, would reform Oakland’s Police and Fire Retirement System. It would give Oakland some relief from skyrocketing pension costs and force us to manage pension payments more responsibly in the future.
Like many cities, Oakland’s mounting pension costs and unfunded liabilities are threatening our ability to deliver the most basic city services. Past commitments to generous pensions for retired city workers are overwhelming our ability to pay them and still fund current services like police, fire, public works, libraries and parks. California law severely limits the City’s ability to change these costs and prohibits us from modifying any past commitments.
Oakland’s Police and Fire Retirement System “PFRS” has been closed to new hires since 1976, but still pays benefits to about 1,000 retirees. Because this retirement account is not fully funded, the City must pay the PFRS fund almost $46 million every year until 2026.
Measure J would reduce the strain on Oakland’s budget by trimming $4 million from the annual $46 million payment, in exchange for a modest deadline extension of two years. Oakland’s PFRS obligation is not a loan, so the 2 year extension under Measure J would not add interest charges. An analogy would be like giving yourself two more years to reach a savings goal.
Measure J’s amortization provision would force Oakland to make stable payments and add protections from market speculation and volatility.
An independent financial expert, or actuary, will control how Measure J is used. The PFRS deadline would only be extended if the actuary can assure that it will be financially responsible and sustainable. Extending the PFRS deadline would not increase or extend any taxes or add any debt to the budget.
This modest adjustment would reduce the strain of Oakland’s annual pension payments by $4 million a year, enabling us to redirect that funding toward pressing matters like hiring more police.
In its endorsement, Make Oakland Better Now says “Measure J represents a reality-based response yielding budget relief and securing our promise to pensioners without the requirement of additional taxes or bonding.” Measure J also is endorsed by the Democratic Party, Chamber of Commerce, Oakland Firefighters Local 55, Association of Retired Police Officers, East Bay Express, Alameda County Central Labor Council, and the Wellstone, MGO and East Bay Young Democratic Clubs. Measure J was inspired by the work of Oakland’s Budget Advisory Committee, particularly its Ad-hoc Committee on Unfunded Liabilities, to whom we’re grateful.
Please vote YES on Measure J. This is a mail-only election. Please be sure your ballot reaches the Alameda County Registrar of Voters by November 15th.
Have an opinion? Oakland Local welcomes op-ed and opinion pieces, For more view on Measure J, look at http://oaklandlocal.com/tags/measure-j