By: Rich Rifkin

Rich Rifkin — Wed, 10 Oct 2012 17:55:11 +0000

"The other cities that Moody’s has targeted for possible downgrades are Azusa, Berkeley, Colma, ... Torrance and Woodland." One thing Berkeley has not done, and this is likely the case with most or even all of the 30 cities on Moody's list, is adopt a true pension reform. In late August, Berkeley reached an agreement with its police officers which created a lower, second-tier pension for its new hires. The current police get the impossibly expensive 3% at 50 (same as in Davis and most agencies). The new cops will get 3% at 55. That is not reform. That will not save Berkeley much money at all. That contract likely will doom Berkeley's finances for many more years. Davis has not yet adopted a lower, second-tier for our new police and fire hires. (Negotiations are ongoing.) If Davis follows the path Berkeley took, we will be doomed, too. Examples of cities we should look to include the City of Carlsbad, which just adopted 2% at 50 for new hires and Cathedral City, which just recently agreed to a new second tier for fire of 2% at 55. Those formulas are sustainable. Only real reform will keep Davis from going bankrupt.

Comments on: Woodland on list for possible credit downgrade

By: Rich Rifkin