San Bernardino Seal

By Ed Mendel
Monday, November 3, 2014

The city charter has forced San Bernardino to give police two pay raises since declaring bankruptcy, one costing $1 million and the other $1.3 million. Now voters are being asked Tuesday to change the charter and prevent a third automatic pay raise.

Under a charter provision adopted in the 1950s, San Bernardino has a unique twist on a common practice: Using the pay and benefits offered by similar employers as a benchmark during labor contract bargaining.

In San Bernardino, pay for police and firefighters is not bargained. It’s set at the average of pay in 10 cities of population between 100,000 to 250,000, selected by management and labor taking turns crossing one city from the list until only 10 remain.

Measure Q, which would replace Section 186 with bargaining, was placed on the ballot by a 4-3 vote of the city council. The ballot argument for the measure said the charter provision contributed to the city’s budget problems.

“Every other city has a unique economic situation, and every other city negotiates salaries within collective bargaining,” said the argument. “San Bernardino is locked out of this option.”

The ballot argument does not mention that San Bernardino is the “poorest city of its size in the state,” as a George Mason University study said last year. The 10 pay-link cities this year include Irvine, Santa Rosa, Daly City and Santa Clarita.

The San Bernardino per capita income was $15,672, compared to the state average of $29,634, according to the 2010 census. And the income of 29 percent of San Bernardino residents was below the poverty line, compared to 14 percent statewide.

“As an unfortunate consequence of politics and historical trends, the city found itself committed to salaries and pensions that were neither proportionate nor sustainable,” said the George Mason study by Frank Shafroth and Mike Lawson.

After an emergency bankruptcy filing on Aug. 1, 2012, which was said to be needed to continue making payroll, San Bernardino stopped general-fund employer payments to CalPERS during that fiscal year, saving $13.5 million before resuming.

The skipped payments gave the California Public Employees Retirement System grounds to terminate its contract with the city. But CalPERS only responded with a lengthy legal battle, becoming the lone opponent of the city’s eligibility for bankruptcy.

Last June San Bernardino said in a court filing an “interim agreement” had been reached with CalPERS that would help form the basis for a debt-cutting “plan of adjustment” to exit bankruptcy.

No details of the closed-door mediation were revealed. But CalPERS slowed an appeal of a ruling that San Bernardino is eligible for bankruptcy. A $10 million city budget item this year appears to be a payment on the skipped CalPERS contribution.

As in the recent Vallejo and Stockton bankruptcies, San Bernardino has not publicly proposed cutting pensions. A plan for operating in bankruptcy called for a “fresh start” that would “reamortize CalPERS liability,” saving $1.3 million in the first year.

A San Bernardino attorney, Paul Glassman, was quoted by the San Bernardino Sun as telling the court in June: “The city believes based on discussions with unions and retirees that sustaining their relation with CalPERS is very important.”

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