Posted on 04/03/2010 6:16:47 AM PDT by jmaroneps37
Los Angeles mayor Villaraigosa’s chief of staff made it crystal clear: “Unions have priced themselves out of a job.”
America’s big cities have come to a grim choice: the union party is over or the city is over. The costs of union pensions and healthcare coverage have officials in cash strapped cities and states confronting their union masters and demanding dramatic benefit cuts from the same unions that hold them on a leash.
Memphis is looking to increase its retired employees’ healthcare premiums by around 15%. Toledo ripped $3.1 million from its fire fighters union contract. At least 17 states have either cut employee benefits or demanded big concessions from unionized workers.
Costs tell the story
Labor Department figures on the costs per worker hour for public versus private employees make the case about the oppressive costs of unionized government workers. It reports that for December the average government employee cost $39.60 versus just $27.42 for private employees.
When this huge disparity is combined with the Census Bureau’s report on sharply declining state and local tax revenues which dropped 18% since Barack Obama’s election, the way to solvency is not at all clear.
Water lapping the top of the dam
The number of unionized government workers has finally surpassed that of private sector union workers. This means the number of private workers who pay the taxes to support government employees is shrinking and the number of takers is growing. This can only mean disaster for our country.
California in freefall
It has long been said: what happens in California today will happen across the country tomorrow. If this holds true we’re in for a depression caused by greedy unions controlling spineless Democrats. California’s Public Employees’ Retirement System at best is funded just 65% of what it needs to function.
(Excerpt) Read more at collinsreport.net ...
Public employee unions role is to redistribute as much taxpayer money as possible and vote democrat. That’s why the Kenyan loves ‘em.
I’ve been talking to my friends and have posted on FR something I call “The Entitlements Crash”, I didn’t come up with the name but it applies here, oh so well.
When the Government, (Federal, state and Local), can no longer pay out cash for “Entitlements”, it will all come crashing down. And quite frankly I do believe that it will be a world-wide crash as the economy is entertwined like a spider web among all of the nations.
What will come afterwards? Well, your guess is as good as mine. Frankly I think that cash and barter will become King and Queen and that Credit will be anathema for generations after.
At one time the unions were good for the “workers”. Today unions are NOT for the workers. The union is interested in keeping union members for their own salaries and power. The unions are the reason so many of our manufacturing base is somewhere else in the world and NOT HERE.
i draw social security and military retired pay and don’t consider either one safe.
Despite the dire tone of this article, it is spot on. The socialists have run out of other people’s money far sooner than they expected. There is nothing more poignant for those who’s God is Government to be forced to confront the lies of their own making. Unlike Conservative Americans, Unions and Socialist Politicians are both run by violent people without moral constraints. The Republic is in peril, but we will soon find out if this Nation has a moral compass. Perhaps this split will give us the clarity needed to decide what kind of nation we will have.
That is very true. Personally, I think unions ought to be illegal for government workers.
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Dying city and state governments finally turning on their union masters
and it won’t be pretty
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For all the Democrats that (by and large) run these dying cities...
and the people that voted them in...
they sure preach “environmental sustainability”.
But sure don’t understand “economic sustainability”.
I guess the latter topic isn’t taught in the public schools of big cities.
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Refusing to deduct union dues from some city workers paychecks.
Firing bus drivers who called an informal strike.
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Wow! That is surely one buried news story.
I suspect news reporters are afraid if they really report on this,
and ask Mayor Bing where he got the courage and idea to do this...
he might just say “I asked myself what Ronald Reagan would do”.
As in how to deal with “public servants” that go on strike, a la PATCO.
Liberal news reporter would not want to report that...it might give
some other mayors a bit of spine.
GREED?!!!
Hey you think when President “Greed is EVIL” hears about this he’ll come down hard on the Greed-doers?
Make no mistake, Dave Bing is a true democrat but he’s a democrat who earned his money the hard way. He was turned down for a mortgage by a bank and instead of screaming about racism he took a job with the bank during the NBA off season.
It should be noted that Ronald Reagan awarded Bing the National Minority Small Business Person Of The Year in 1984.
HEAR! HEAR!
The feds will steal all the private pensions and 401s and everything else they can in order to keep paying the public sector pensions.
The State, and those who get a check from the State are the new upper class.Our public masters who know whats best for us.
They will be the only ones with “money” by the time the commies are done transfering the wealth like obama said he would.
Thanks for the background on Bing.
Sounds like the rare Democrat I could at least respect.
Having been a union employee myself, I think Bing’s idea of not deducting union dues from paychecks is the single most effective means of crippling a union. The unions will really struggle to collect dues if they have to walk around a shop and collect cash from individuals.
It serves several purposes.
Right off the top it stops forcing the employer to play collection agency for the union. It gives the individual more control over their own union and puts a spot light on the costs of the union vs the benefits.
The people though will never understand. They just think the “rich” can be taxed more to pay their “fair share.”
For one thing, my pension and other benefits are safe.
Federal pensions (NOT state and local pensions) are quite safe because the federal government can always print more money to fund them. States and cities can’t do that.
To: Mayor Rivera and City Council Members
From: Stephen Bartolin, Jr.
Date: November 16, 2009
Subject: City Budget
I understand you voted to take $580,000 out of the CVB’s share of the Tourism Budget. I completely understand the financial pressures the City has right now and the tough decisions that must be made. I am not sure this is the most effective idea, however, for two reasons:
• It doesn’t really put much of a dent in the overall problem.
• I can say with a good fact basis that cutting tourism funding will only dig the hole deeper.
This was proven, in no uncertain terms, when the State of Colorado did this. It cost them many millions more than they saved.
With that said it is unfair to make that comment and not offer some solutions. It doesn’t appear to be a popular solution to cut police and fire or not replace street lamps or water parks or close the museum or require temporary furloughs. It appears to be making people angrier. People seem to want a more comprehensive and long lasting solution.
The Gazette article a few Sunday’s ago brought some clarity when it broke down the city revenues and expenses by area. I was surprised that public safety was only a $114M of the overall $226M in expenses.
I am sure there are efficiencies to be gained in public safety, but there is a lot to work with outside of that.
Please understand the constructive manner in which these comments are intended. A good way to look at it is as a business problem. Say you are the new CEO of a $226M a year business that is going to run $30+M in the red next year. The easy answer is to raise the rates and increase revenue, but the marketplace won’t support that (in this case, the taxpayers).
That leaves only one alternative. Deal with the expense side. A basic analysis of the expenses is that you have a 70% overall payroll cost, $161M payroll for 1805 employees which equals $89,196 per employee and benefit and pension plans that are not only “Cadillac” but more “Ferrari” when compared to what is being offered in the private sector.
Looking at it this way, the solutions become more obvious:
• Restructure and reorganize how the City is run and figure out how to do it with approximately 1550 employees versus 1805 employees.
• Restructure the starting wages for both salary and hourly personnel across the board.
• Contract out everything that is practical with sharply negotiated pricing which gets you out from under the overtime, benefit and pension costs paid to City employees.
• Restructure your benefit and retirement plans to something more comparable to what is available in the private sector.
More specifically:
• 70% payroll cost - No matter what business you are in, for profit or non-profit, the game is pretty much over if you are running a 70% payroll cost. We do approximately half the revenue the City does and we run a 30% payroll cost with 1800 plus employees, near the same number as the City.
• Per employee cost of $89,196 - It is doubtful you can find any private employer for 500 or more people in the state of Colorado or practically the nation that has a per employee payroll cost that high. Our per employee cost is $24,460, which includes seasonal and part-time people which we use a great deal as there are no benefit costs associated with these.
• The number of people it takes to get things done.
i. The Gazette reported that the City has 81 people in its IT Department and is reducing it to 69. We have some ultra-sophisticated and integrated systems and a large PC network. In addition, we provide 24-hour IT customer service to all of our guests. We do this with 9 people
ii. I was told that the Utilities Department has over 30 people in Communications plus employs the services of an outside PR agency. We have 1 person in PR and we have to compete for our business across the nation.
iii. The Gazette also reported that Utilities has approximately 60 people in Human Resources. We have 13. Yet we have over 1800 employees compared to their 1300.
• Examine the number of salaried positions - of our 1800 plus employees we have 144 salaried positions. I have no idea how many the City has but it would be interesting to know.
• The Gazette reported that the City has 67 positions paying $100,000 or more. We have 13.
• Restructure starting wages for hourly and salaried positions - every year we do a wage survey among major employers as well as other hospitality employers in the city for comparison purposes. For all like positions and in almost every single case the City had the highest starting wage over any of the other private sector companies we surveyed.
• Restructure the health insurance program to one comparable to what is being offered in the private sector and examine the costs shared by the employee.
• Move retirement age to 60 no matter how many years of service - both for collection of benefits and for medical insurance.
• Once a retiree reaches age 65 move them to Medicare and off the City plan.
• The weight of the pension plan is crushing the City financially. If the private sector cannot afford plans likes this how can the taxpayers? It has to be dealt with. It occurs to me Police Officers and Firefighters who risk their lives for this community should be excluded from the ideas being advanced.
Police and Fire support staff should be treated like all other City employees. Develop a generous matching 401K plan and have people take responsibility for their own retirement planning. A friend of mine’s wife works in the IT Department of one of the City entities (she is paid $120K a year - she is not the department head or the director).
Our Director in IT makes $90K a year. This lady is 49 years old and plans to retire next year at 50. She will receive 80% of her salary with annual cost of living increases and full medical package for the next 30+ years. Who can afford this?
• Whatever measures are decided on should be carried right across to Utilities. They operate like their own private fiefdom. When I look at our water bill going from $580,000 in 2008 to $2.5M by 2018 certainly the same operating efficiencies applied to the City should be applied there. Possibly it makes sense for Memorial Hospital as well.
• Capital Expenses - the article did not indicate how much the City spends annually in capital expenses, but I am sure it is many millions of dollars. Our staff is always amazed at the new fleets of vehicles you see in use, i.e. when the Stormwater Enterprise was established everyone was outfitted with fully optioned F-350 trucks. You see them all over town. We maintain vehicles well and run them until they don’t run anymore. We have many with over 200,000 miles. We also buy well maintained used trucks, shuttle, vans, etc., many of which have been in service 10 years now. I understand the Police Department just spent $3M on new portable telephones when the present system was operating fine. In this economy could that have been postponed for another year or two?
• Go to zero based budgeting for operating and capital expenses immediately before capital budgets for 2010 are approved.
We know the arguments you’ll get: that we are only in the mid-pay range of other cities - won’t be able to hire and recruit - etc. etc. - baloney - I showed you a number of comparisons to our business with staffing levels, number of people at 6 figures or more, number of salaried people, average cost per employee and benefits per employee, etc. between The BROADMOOR and the City - we are not comparing some third rate organization. The BROADMOOR is recognized nationwide as a world class organization and we compete in a world every day where the best is just good enough. We are able to recruit top professionals in all the key positions and get creative with how we staff and operate our business.
It probably would not be effective to turn these suggestions over to somebody within the City and have them develop and implement the necessary solutions. You’ll have to bring in a firm from the outside to do it under Council’s direction or you can put together a panel of CEO’s within the community to analyze this and I am sure they would have many more points to offer. I would be happy to facilitate such a group and host a lunch discussion. I mentioned it to Bill Hybl and he said he would be happy to offer input as well and participate. A more comprehensive approach is what will provide a viable long term solution. I predict that if Council were to take this on and restructure with real reform and solve problems you would earn the respect and admiration of the entire community. In fact, this could be a national success story.
Thank you.
Sincerely,
Stephen Bartolin, Jr.
President and CEO
SB/sgw
LOL. Bartolin seems to be a NIMBY (he’s a hotel operator who doesn’t want the city to cut the tourism budget).
Oh THAT Dave Bing! The dime didn’t drop right away that we were speaking of an NBA great!
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