Former City Manager Bob Deis Speaks Out on Stockton’s Bankruptcy
Though the case surrounding Stockton’s bankruptcy is winding down, the city still is the center of attention when it comes to the ever-contentious issue of pension. The debate is focused on whether the city can (or should) use bankruptcy court to further reduce pension of city workers. Former Stockton City Manager Bob Deis, recently weighed in on the issue and provided perspective and knowledge on the crossroads the city finds themselves at. Dies became city manager in July of 2010 in the midst of its financial crisis, and retired in November of 2013 after submitting a bankruptcy exit plan.
Deis said with no uncertainty that CalPERS did not push the city into bankruptcy, though some claimed it did. With that out of the way, he then brought up a point he thinks has not been getting the attention it deserves: If Stockton were to reduce its CalPERS pensions, how would it work? What would happen if they did? According to Deis, if they were to reduce pensions, the city would have to reduce their CalPERS contract. If that were to happen, the city would not save any money, as it would have to find a new retirement plan immediately. Plus, the rejecting of the contract would make it extremely difficult for the city to provide services.
Given that there are no alternatives cheaper than CalPERS available, Deis believes that trying to reduce benefits for city workers is not a feasible solution, and not worth the trouble it would lead to, especially given that many retirees in Stockton already gave up a large portion of their retirement package, and many are not eligible for Social Security.
What do you think? Should Stockton reduce pensions, even if it means finding an alternative to CalPERS? Should they find a different alternative to their pension troubles? Let us know below.
Read more of Deis’ statement here.