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Berkeley FACTS Initiative, Measure V (November 2012)
Measure V would require that the City of Berkeley prepare an annual Certified Financial Report once every two years. The first such report would have to be published by March 1, 2013. The report would have to disclose:
- All financial obligations for the next twenty year period for employee and retiree expenses, capital improvements and capital assets
- The "productive capacity" of City services
- An evaluation of the present value of these Long Term Obligations and the yearly expenses needed to meet them.
Some financial facts about Berkeley include:
- The City of Berkeley currently has an unfunded pension liability of $539 million.
- Berkeley has the highest ratio of city employee to city resident (one city employee for every 73 residents) of any California city.
- 14 Berkeley employees have gross salaries of more than $200,000/year. This does not include their medical and pension benefits. The city's auditor has estimated that those costs amount to over fifty cents to every dollar of base pay.
- 64 employees collect more than $150,000/year, plus benefits.
- 510 employees collect more than $100,000/year, plus benefits.
- Public safety employees may retire with retirement pay at age 50, with a lifetime pensions equal to 3% of salary for every year of service. * Unused vacation time and sick leave may be accumulated throughout the employee’s career and paid in a lump sum when an employee leaves or rtires.
Supporters of Measure V point to the November 2011 retirement of city manager Phil Kamlarz as an example of what inspired their interest in Measure V. When Kamlarz retired, he was paid $147,000 for unused sick and vacation time. He will be paid about $250,000/year for the rest of his life in retirement pay from the City of Berkeley and, if he pre-deceases his spouse, his spouse will continue to collect that amount for the remainder of her life. Because of the way Berkeley handles retirement, Kamlarz was not expected to contribute toward his own retirement fund, and never did.
The official voter guide arguments in favor of Measure V were signed by:
- Mark Humbert
- Isabelle Gaston
- Ted Edlin
- Shannon R. Brown
- Jesse Arrequin
The Oakland Tribune has editorialized in favor of Measure V, writing, "This is a long-overdue, much-needed requirement that the city clearly disclose long-term debt obligations in a biennial report and spell out the repayment plans. All cities should do this. Berkeley, for example, has run up about $570 million of unfunded liabilities just for employee retirement programs."
Arguments in favor
The official voter guide arguments in favor of Measure V include:
- The city has at least $1.2 billion in unfunded obligations, primarily for employee retirement costs.
- Measure V will give the City Council and the public a clear picture of the city's long-term financial obligations.
- The amount of money the city is having to spend every year to pay for previously unreported long-term obligations is getting out of hand and is getting worse every year. It is preventing the city from paying for important needs such as safety net services, streets, storm drains, and buildings.
Supporters of Measure V describe how the initiative came about on their website, writing:
- "Three years ago a group of concerned Berkeley citizens suspected that Berkeley city finances were in trouble. They met with Council members Capitelli, Wozniak and Wengraf to try to uncover the issues that are now all too real. In January 2010, they were successful in obtaining a resolution from City Council that resulted in the recently presented audit on Unfunded Liabilities.
- Berkeley Budget SOS includes a UCB Professor Emeritus in Economics, former member of the US Council of Economic Advisors and California Secretary of Agriculture, partners from Big 4 accounting firms including one specializing in pensions and benefits, lawyers, business leaders, public policy pundits and community activists.
- Berkeley Budget SOS hopes that you will join in its concern for the economic challenges facing our city. Berkeley is facing a staggering list of tough budget decisions and it is not clear that all the landmines have been uncovered. That is what is most frightening. What we have learned is bad. What we can’t find out might be even worse. We, as citizens, must be made fully aware and enabled to participate in the process.
- Our mission is to be dedicated to fiscal clarity, solvency, oversight and sustainability of the City of Berkeley."
The official voter guide arguments opposing Measure V were signed by:
- Sherry Smith
- Loni Hancock
- Susan Wengraf
- Judith Bloom
- Gordon Wozniak
The official voter guide arguments opposing Measure V include:
- Measure V could create financial risk for Berkeley.
- Measure V would not allow the city to respond in a timely way to earthquakes.
- Trying to forecast employee retirement costs twenty years into the future is "largely conjectural".
The question on the ballot:
|MEASURE V: "Shall an ordinance requiring the City to publish certified biennial reports of its 20-year financial obligations for employee/retiree expenses, capital assets, and “productive capacity of City services”, the present value of those obligations, and the annual expenses needed to meet them, and prohibiting any new or increased debt financing, property-related fee, assessment or tax absent certification of the report by the City Manager or other, independent professional, be adopted?"|
- Berkeleyside, "City Council approves pools measure, debates streets", June 27, 2012
- Berkeley Patch, "Deadline Looms for Ballot Arguments", August 16, 2012
- Committee 4 Facts, "A Major Culprit is Overly Generous Salary/Benefit Packages"
- Oakland Tribune, "Oakland Tribune editorial: No on Measures A1 and U and yes on Measure V", October 31, 2012
- Committee 4 Facts, "About Us"
- Note: This text is quoted verbatim from the original source. Any inconsistencies are attributed to the original source.