No easy answer to state’s pension issues
California has forced our local town and school leaders on a suicide mission when it comes to pension costs. Mill Valley Councilman John McCauley and Larkspur Councilman Larry Chu are both exceptionally thoughtful, but the two Marin County Council of Mayors reports detail the futility of their efforts: “the current system structure is unsustainable,” yet the major root cause — an unreasonably high assumed rate of return — “will not be discussed by the committee … that will be left to the actuaries and academics.”
The academics at Stanford have spoken: The current accounting for CalPERS and CalSTRS systematically understates their true economic pension liability. Using CalPERS’ own conservative “termination rate” method, California’s unfunded liabilities are over $1 trillion according to Stanford’s excellent PensionTracker.org site.
The MCCMC report continues: “Wholesale changes to the system are needed, but the Legislature has not shown they can reach a consensus that will provide any meaningful reform.” Thus, towns and school districts are left clipping at the edges. How is it that California, a supposed paragon of progressive virtue, is systematically asphyxiating municipal and educational service delivery across that state?
Chu’s recommendation of refinancing pension liabilities with a bond is an especially bad idea, “analogous to an individual borrowing on a line of credit against their home’s equity and using the proceeds to invest in the stock market,” as noted in the MCCMC report.
The state’s politicians have been making rich pension promises and gambling with our money, yet we are all on the hook when they crap out. Buckle-up, it’s going to get a lot worse.
— Ken Broad, Mill Valley
Affordable housing plan needs careful attention
The article in the Independent Journal about the affordable housing plan for the former Coast Guard site near Point Reyes Station is a positive turn of events (“Marin supervisors sign off on Coast Guard purchase,” Sept. 18). One significant problem with such good beginnings is the failure to chart potential sticking points in the development process. Perhaps one of the most telling is the problem with management.
Here we have generally two separate issues: The physical building and maintenance of the physical plant, replacement of fixtures and appliances, as well as the grounds. It is, in this regard, excellent that Leelee Thomas, planning manager for the county’s housing and federal grants division, and Supervisor Kate Sears are cautioning excitement as in the example of the sewage problem.
However, the other significant class of issues concern the management of tenancy. Who will be allowed to live there and how will they be chosen?
The site has been promoted by Community Land Trust Association of West Marin members as a potential project for needed agricultural workers. But how can this be managed? Will only agricultural workers qualify? Will there be income requirements? If they change jobs will they be evicted? If not, will we find residents at the site in a few years working in San Francisco, San Rafael, Santa Rosa or Novato and only adding to traffic and pollution problems?
Many projects of this kind begin with the best intentions, but due to poor planning, and/or funding, end up producing more problems than they solve.
— Niccolo Caldararo, Fairfax
Money for consultants part of SMART charade
In regards to Joanne Gotelli’s letter to the editor published Sept. 6 about salaries on the Sonoma-Marin Area Rail Transit board, I think she clearly sees SMART’s financial charade.
Let’s see if we have this correct. The management of SMART — those who have proved to be incapable of sound operation forecasting in building the system — now want us to believe they can clearly, accurately see 30 years into the future. They want us to give them future funding without detailed justification. Just trust that they can predict what they will need for 30 years.
Also interesting to note that current CFO Erin McGrath is not capable of doing a CFO’s job. So SMART brought in financial consultant Sarah Hollenbeck to help.
Real business startups hire people who can do their job and not waste precious money by hiring consultants to do their work for them. Additionally, real businesses don’t spend money in the future — meaning they make a profit with the operation they have first, then use those profits to expand in the future.
SMART does want to do that since they do not have to live on the fruits of their own labor. They just need to con us out of more tax dollars.”
— Bill Hess, Greenbrae
