This commentary originally appeared in the February 15th edition of The Daily Pilot. An abbreviated version of this commentary appeared in the February 18th edition of the Orange County Register.
I read the Feb. 9 Daily Pilot article, “Mayor pushing on with his plan,” and the Feb. 7 Orange County Register editorial, “Outsourcing back in for Costa Mesa,” that the Pilot article referred to, and I have several comments.
The Pilot’s report of Costa Mesa’s Mayor Jim Righeimer moving forward on outsourcing by using retirement and attrition, rather than layoffs, may sound good, but there are still serious doubts about using outsourcing to reduce future pension obligations. Keep in mind that outsourcing was not mentioned as a means to deal with underfunded pension obligations in the December 2011 Stanford Institute for Economic Policy Research report on pension math. I think I know why.
Even though outsourcing has been claimed as a means to reduce future pension obligations, it might do the opposite. If jobs are outsourced, there are fewer employees paying into the pension plan; this will worsen the underfunded pension obligation.
Also, assuming the mayor still insists on outsourcing, the reduced costs claimed from it are said to be earmarked for infrastructure maintenance. But why aren’t at least some of the funds being put toward the underfunded pension obligation? I have the same question about Costa Mesa’s $2.5-million budget surplus from last year.
If the council doesn’t apply at least some of these funds to the pension obligation, will the majority City Council suggest that the city has to sell bonds and incur more debt and risk to pay for the underfunded obligation? This is not a good idea.
Moving on to the Orange County Register editorial, it gave the impression that Righeimer’s soundly defeated proposed city charter Measure V (60% against) was without flaws and that the voters erroneously missed an opportunity to grant the majority council more leeway (power) on privatization of city services. This was deceptive.
Measure V was seriously flawed and that was why it was defeated. Members of the OCR editorial board knew about the flaws before endorsing it. I know this because three Costa Mesa residents, including myself, met with three of them in September before the endorsement and described the flaws.
Contrary to the impression given by the Pilot article and the OCR editorial, it seems that we are headed down only a slightly different outsourcing and charter path than we were before. So if the outsourcing is not right, or the charter contains flaws like those in the first one, there will be strong opposition to them again.
CHARLES MOONEY is Vice President of Costa Mesans for Responsible Government.