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Mailbag: Outsourcing could make unfunded pension obligations worse

February 26, 2013

I read Jeff Arthur's Feb. 21 letter, "Mailbag: Commentary overlooked C.M. pension obligations," which contained complaints about my previous letter, "Commentary: I have doubts about Costa Mesa's outsourcing." I would like to respond to his complaints and point out a few other facts.

Arthur complained that I offered no real alternatives to addressing the underfunded pension obligation. I will comment on that statement below. However, I would like to point out that there were no alternatives suggested in his letter, unless you consider his non-specific suggestion that we send our ideas to the City Council and that we support the council's efforts to be fiscally responsible.

Keep in mind that the last time we provided ideas about the charter to the council, they ignored essentially all of them, including our desire to have an elected charter commission.

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Also, the council's actions associated with fiscal responsibility include, among other questionable actions, running up legal fees of more than $1 million due to an avoidable lawsuit, and allowing for no-bid contracts in the last flawed proposed charter.

So before supporting the majority council, I will continue to evaluate their actions and their appearance to be fiscally responsible. I will do this because of their previous problematic actions — proposing a flawed charter — and my worry about who influences them, whom I fear are out-of-town lobbyists and partisan politicians.

I did not discount the council's cost savings through outsourcing, as Arthur claims, but I did express concern that outsourcing could make the underfunded pension obligation worse because fewer employees would be paying into the pension fund. I also raised the issue and idea of applying at least some of the cost savings from any outsourcing to the pension obligation. This assumes, of course, that the council majority continues down the outsourcing path. I also implied that the $2.5-million budget surplus could be used to pay down even more of the pension obligation.

Lastly, Arthur implied that the last proposed flawed charter would address the current underfunded pension obligation. This is not true. The last proposed charter did nothing to address this issue.

Arthur's letter did not offer solutions to outsourcing or the underfunded pension obligation, but I see that the council has created an appointed volunteer committee comprised of nine residents to investigate how to pay down the obligation. I am encouraged by this. I look forward to seeing who is appointed to this committee and what they recommend. I hope they at least take my above suggestions into consideration and see that they are steps in the right direction.

Charles Mooney

Costa Mesa

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