After SB 400 was passed in 1999, Calpers went around to local governments in California with a sales pitch that ended up being a complete scam.The Encinitas City Council fell for the CalPERS fraud in 2005, after Pacific Grove and other cities had already realized they'd been duped and after CalPERS was already deeply underfunded. Not the brightest leaders here in Mayberry.
Bill Kampe, Mayor of the City of Pacific Grove (Monterey County), says his city is one of the many public agencies that was scammed by Calpers and continues to pay a huge price. Pension costs now make up 25% of the city’s General Fund spending, and continue to grow, while the city is having a tough time paying for basic city services and infrastructure needs, such as road maintenance, Kampe says.
Kampe said the problems started in 2001 when city officials made a big mistake and accepted a “raw deal” from the Calpers. At the time, Calpers officials urged the city to adopt a series of major benefit expansions for public employees, particularly public safety employees, that they said would help with recruiting and improving public safety services in the wake of the 9/11 terrorist attacks. Furthermore, Calpers said the benefit enhancements would not cost much money and benefit the city in the long-run.
But by 2004 Pacific Grove city officials soon realized they had been “duped” by the union-run Calpers, when a few years later Calpers jacked up its rates and the City of Pacific Grove realized that it was having a harder time recruiting and paying for public safety officials because the changes allowed for retirement at age 50 with very generous pension benefits. As a consequence, the city had to layoff 1/3 of its staff, eliminate road maintenance for five years, and enact deep cuts to public services–all issues that the city continues to struggle with more than a decade later.
Encinitas now spends more money on government worker pensions than it does on road maintenance, and pension costs will continue rising significantly each year.
UPDATE from the Inbox: Pension costs are more than doubling for the school districts too.