Lodi City Manager Steve Schwabauer worries about his town’s fiscal solvency — and estimates roughly a third of California’s municipalities are in the same position because of rising pension costs.
Nancy Kerry, city manager of South Lake Tahoe, says her community will avoid bankruptcy but will have to make severe cuts in services to do so.
Schwabauer and Kerry are among a small number of top administrators now publicly talking about the financial crisis ahead. They both say the only way to stave it off begins with reducing pension benefits for existing employees.
“If we had taken this on 15 years ago and said we had a real problem, I think there might have been another way out,” Schwabauer says. “We waited too long to deal with it because nobody wanted to pay the bill.”
Kerry and Schwabauer independently contacted me recently. It’s refreshing to hear their candor. For far too long, top government administrators in California have remained silent, or offered up timid ideas, while most of them knew, or should have known, a crisis was brewing.
These are the people who are supposed to provide the financial expertise and neutral analysis, and be the bearer of good or bad news. Rather than sound the alarm, many of them have been enablers of the 21st Century financial can-kicking.
“The system is teetering, you can’t deny it anymore,” says Kerry. The turning point was the December decision by the board of the California Public Employees’…
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