Costa Mesa is ground zero for the California war against public employees, the bloody tip of the spear.

The Orange County GOP has chosen this middle-class burg as their laboratory and given pink slips to 213 employees, even before making any analysis of whether his planned outsourcing makes any fiscal sense.

Mayor Pro Tem Jim Righeimer has been beating his chest on John and Ken and appearing all over the local news in Southern California.  

Riggy’s spiel always includes his description of the pension crisis in Costa Mesa, which he describes like this, “Ten years ago Costa Mesa paid 5 million for public pensions. Now we pay 15 million a year, and CalPERS projects that five years from now we will be paying 25 million. His allies point to this scary, scary graph that was presented at a study session in Costa Mesa in February.

There’s only one problem. It’s phony as a three dollar bill. Click “There’s more” to see an honest graph.

 

When I first saw that graph, it just seemed screwy, so I went to the City of Costa Mesa web site to see the back-up documentation. Surprisingly, there was none. I made a visit to Costa Mesa City Hall to see what was in the agenda packet. “Only the Powerpoint”, the City Clerk told me.

I persevered with requests under the Public Records Act, talked to current and former Council members in Orange County, got comparative figures from other cities, and remained mystified.

Of course it made sense that pension costs had increased since 2000. Back then, Costa Mesa had superfunded pensions and didn’t even have to make the employer’s share of the contribution. Lately, pension rates have increased, but Costa Mesa has also cut over a hundred employees, including police and fire.

In October 2010, Costa Mesa employees agreed to pay an additional $3.6 million a year in pension costs that are just now going into effect. That’s why the expenditures for 2011-2012 decrease even while there was a marked increase in CalPERS rates used in the City’s projections.

I’ve emailed back and forth with the new $3,000 a week communications director, Bill Lobdell, who promises to get back to me next week.

So finally, I pulled out the October 2010 actuarial valuation reports that I had received from the City of Costa Mesa, and made my own projections and graph. Here’s what it looks like over a six year period. The numbers through 2011-2012 come from the City’s report. The next two years are my projection.

Not so scary, eh?

There’s one huge difference. The City’s projection includes a notation that says, “includes employee reimbursement from current contracts only”. I am assuming that the employees of the City of Costa Mesa will continue to pay the same share of the pension contribution that they are paying now.

Really, could anyone believe that Costa Mesa’s radical Republican City Council is going to negotiate new contracts that involve picking up a bigger share of the pensions.?

Following are my assumptions. I am challenging the City of Costa Mesa to show theirs.

*2012-2013 projection based on October 2010 CalPERS reports that projects increase in city’s share of pension costs using actual 2009-10 investment returns.from

**2013-2014 projection based on October 2010 CalPERS report where CalPERS projects five different rates based on FY 2010-2011 investment returns, which are quite good so far this year.

FY 2013-14 projection is based on blended rate between 3rd scenario with 7.75% return (47th percentile) and 4th scenario with 16% return (75th percentile)for this fiscal year.

(Appendix D-1 of each report.)

Assumption of compensation subject to pension for each pool (estimates) used to calculate increase in City’s share of pension costs

For FY 2011-2012 with no changes for 2012-13, 2013-14

Sworn fire 13 million

Sworn police 18 million

Everyone else 20 million

As documented at Pacific Progressive and in local Costa Mesa blog, A Bubbling Cauldron, Costa Mesa is at the bloody tip of the spear in California Republicans’ war against public employees.

Newly-elected Council Member Jim Righeimer and recently-appointed Council Member Steve Mensinger are leading the ideologically-driven jihad, with an agenda item to give notice to 250 Costa Mesa employees that their jobs will be outsourced. This represents a third of the city’s public employees in a wide range of departments. Without any study of the problem, Righeimer has also used local columnist Frank Mickadeit, to float an ill-conceived idea to privatize paramedic service in this column.

Their notice fails to take into account the opinion of Costa Mesa’s City Attorney, which required that notice be given after a decision has been made to outsource, not based on a vague idea to study outsourcing. But, in a move that some see as directly related to the direction of the new City Council, the City Attorney has resigned and the City Manager abruptly retired.

As in Wisconsin, Republicans are battling a phantom “budget crisis” which is disappearing after Costa Mesa residents approved an increase in the hotel tax in November to protect public services and as revenues from sales taxes return.

A massive phantom gap in future pension costs for public employees is forecast, although the cost to the city has been flat for years as public employee unions have picked up part of the cost.

You may not recognize Jim Righeimer’s name, but he has been one of the movers of Republican politics in Orange County for decades, managing Dana Rohrabacher’s Congressional campaign in 2008, as a founding member of the Education Alliance, and as a co-author of prop 226. Righeimer and his brother-in-law Mark Bucher have led movement conservatives through groups like the Family Action PAC. Support by Riggy and his regressive allies helped elect wacky movement conservative Don Wagner (R-Irvine), Assembly leader of the Taxpayer Caucus.

State news sources don’t reach behind the Orange Curtain, and the local newspaper, the Orange County Register, uses their near-monopoly for almost daily attacks on public employee pensions, not just with commentary but with daily slanted headlines and news coverage.

Costa Mesa is the beachhead, but other Orange County elected Republicans attended OC Republican chair Scott Baugh’s Pension Boot Camp, and are ready to go on the attack against public employees.

Update As expected, the Costa Mesa City Council voted Tuesday night to issue lay-off notices to over 150 workers and study privatizing paramedic service despite overwhelmingly negative testimony from city residents. Basically saying, “You’re Fired, but come back to work tomorrow”, the six-month notices will only go into effect if the Council approves outsourcing in 18 separate city departments, based on approval of $200,000 to study reorganization of all city services.