Unions Call for Pension Investigation

NBC Bay Area investigation prompts an official complaint

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    NEWSLETTERS

    Five city unions have filed a formal ethics complaint against high-ranking San Jose officials, including Mayor Chuck Reed. Part of a continuing series led by NBC Bay Area's Jenna Susko. This story was published Feb. 10, 2012 at 3:20 p.m.

    Five city unions have filed a formal ethics complaint against high-ranking San Jose officials, including Mayor Chuck Reed. Read the complaint here (pdf).

    This comes one day after NBC Bay Area's investigation revealed city leaders have not been straightforward when it comes to future retirement costs.

    Guessing Pensions

    [BAY] Guessing Pensions
    Internal emails and documents show some fuzzy math behind pension cost projections used to sell a fiscal disaster in San Jose. This story was published Feb. 9, 2012 at 12:06 a.m.

    The complaint alleges Mayor Chuck Reed, Director of Retirement Services Russell Crosby, and former actuary for the city, Michael Moehle, inflated numbers for five-year retirement cost projections. Our investigation found the mayor claimed retirement costs could reach $650 million by 2015 even though the official projection stood at $400 million.

    "To find out that there has been dishonesty along the way is difficult to even comprehend," Firefighter Union Local 230 President Robert Sapien said at a press conference.

    City employees and union representatives spoke out on Thursday following NBC Bay Area's investigation that revealed some of the retirement cost predictions used by the mayor of San Jose were not based on real data.

    “Mayor Reed lied, mislead, and deceived, concerning true fiscal condition of pension plan in San Jose," union attorney Chris Platten said at the press conference.

    The complaint alleges that Mayor Reed, Crosby and Moehle, “deliberately misrepresented material facts" by exaggerating projected retirement costs to sell a fiscal disaster.

    Crosby told NBC Bay Area, "The Mayor was told not to use that number, that the number was 400, that was the projection."

    Mayor Reed tells us, "I don't recall anyone ever saying not to use that number. I understood it was off the top of his head."

    Mayor Reed told us on Thursday that he didn't regret using the 650 number. As for the the people who were upset that he used the figure, the Mayor tells us, "They can be upset. It's their right."

    San Jose city councilmembers are also speaking out.

    District 2 Councilmember Ash Kalra tells us, "I think what this does in some ways is substantiate the fact that this has been a marketing scheme to push a pension reform scheme that the Mayor wants and not necessarily what's best for the city of San Jose."

    District 3 Councilmember Sam Liccardo has a different view.

    Liccardo tells us, "The point that is important here is: what is the council making decisions based on," he continues, "It's not $650 million just because it appears in the mayor's budget message somewhere in the commentary." 

    Councilmember Liccardo emphasizes, that the council made no decisions based on the figure $650 million as projected retirement costs.

    "I know and I am confident in my own deicision-making and as I look among my colleagues and the documents we have been relying on, that we've been relying on numbers that have nothing to do with $650 million."

    State Assemblymember Jim Beall is now calling for a delay of the city's planned pension reform measure expected to appear on the upcoming June ballot.

    Click here to see the story that triggered the fallout.

    Do you have a story we should investigate?  Contact: TheUnit@NBCBayArea.com