Dear Editor:
Our City Manager, Jay Baksa, says that there is no money to make
road and sewer improvements because of increased salary and benefit
costs for city employees.
Dear Editor:
Our City Manager, Jay Baksa, says that there is no money to make road and sewer improvements because of increased salary and benefit costs for city employees. Now, the City Council is considering using $35 million in bonds to pay for the improvements. When I recently contacted Baksa about the rising cost of the city’s pension liability he told me that he was budgeting an additional $1.5 million for the current fiscal year to cover the city’s higher costs.
The increased cost is a result of the city opting to enhance city worker pensions through the California Public Employees’ Retirement System (CalPERS). Generous retirement plans were offered during the stock boom of the 1990s backed by public employee unions. Now that markets have declined, state and local governments are burdened with new debt. At a time when many private sector workers have experienced sever declines in the value of their 401K plans, some government pension plans are providing 100 percent of retired workers salaries.
Baksa told me that the politics of extremely strong employee unions was the reason for the decision to enhance pension benefits. He thinks it is just the beginning and that pension costs will continue to worsen until the stock market stabilizes. It appears our city leaders were fiscally imprudent by giving in to union pressure. The money now needed to pay for increased benefits could be used for infrastructure improvements. Perhaps it is time for the city to renegotiate employee pension benefits before obligating residents to more debt.
Warren Seifert, Gilroy
Submitted Thursday, Oct. 31
