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Mr. Toneck said that years ago, while he was still on the police force, he saw signs that San Diego was cutting corners. He recalled having to go to Kmart to buy jumper cables for his squad car. He was not surprised to learn the city had shortchanged the municipal pension fund. But he never dreamed his pension could be reduced.

"It was guaranteed, written in stone - when I retire, I make this much and they're not going to be able to touch that," he said.

His pension was set at about $35,000 a year. But last May, he received a letter saying he would start getting about $31,000 instead.

He and the others on disability pensions fell victim to an ambiguously written pension statute that lawyers noticed while combing through San Diego's financial records in the wake of a pension scandal. But there do not have to be accusations of wrongdoing for a government to start looking into whether its obligations to retirees can be reduced.

Some places, including Oregon, Rhode Island, Milwaukee County and several cities and towns in Texas, have already cut public workers' pensions on the basic argument that their pension funds had gone disastrously out of balance. Whether because of investment losses, faulty calculations or other factors, these places have declared that they can no longer sustain a level of benefits that had looked affordable just a few years ago.

Beyond the sheer political difficulty of removing an existing benefit, an array of legal guarantees - some in statutes, some in state constitutions, some in city charters - were supposed to prevent such reversals. But lawyers have been finding chinks in the armor.

In Texas, the pension guarantee in the state constitution has an unusual clause, giving towns and cities the chance to hold referendums on whether to opt out.

Voters in Houston made that choice after learning that pension sweeteners issued there in 2001 were allowing some people to retire in their 40s. Others, who participated in a special program that let them simultaneously work and collect pension money in high-interest accounts, got an even better deal, sometimes walking away with one-time payments of a million dollars or more on top of their regular pensions. The city raised the eligibility requirements for retirement and cut some of the biggest sweeteners.

Oregon rolled back $6 billion worth of public pensions in 2003, but the cuts have been snarled in legal challenges. In October, a federal appellate panel affirmed that Oregon could stop paying a guaranteed rate of 8 percent a year to participants with individual accounts. But another measure, freezing some retirees' cost-of-living adjustments, is still unresolved.

"Retirees have been in a state of turmoil," said Gregory A. Hartman, a Portland lawyer representing some of them. "They don't know what their rights are. They don't know what they're entitled to."

In Rhode Island, state workers' pensions take an unusually long time to vest, so the legislature was able to cut the planned pensions of everyone with fewer than 10 years of service, about 11,300 people.

In Wisconsin, Milwaukee County has tried to avoid legal battles by working with its eight public employees' unions after a pension scandal broke in 2001. A recall election was held and angry voters ousted seven county supervisors from office after learning they had jacked up pensions, including their own.

"This was a totally corrupt, venal deal by a bunch of politicians and their friends who figured out how to loot the treasury," said Roger H. Quindel, a county supervisor. Even so, Milwaukee County has been able to make only marginal trims so far.

Money is draining out of the pension fund so fast that the county has been contemplating the sale of some parks and an airport, along with cuts in government services. And it plans to ask for pension cuts when its labor contracts come up for renegotiation in January. "We won't survive if we don't," Mr. Quindel said.

Wisconsin's state constitution does not specifically protect public pensions, but the county's lawyers have warned that a constitutional protection of property rights may cover pensions. The supervisors asked whether the county could shed some of its pension obligations by declaring bankruptcy, as airlines, steel companies and others have sometimes done. The lawyers said no.

In the private sector, a uniform federal pension law bars companies from reducing pensions that employees have already earned. Since pensions are built up over time, this means that if a company freezes or reduces the growth of benefits at some point, workers will earn smaller benefits going forward, but they cannot be stripped of anything they earned before the change. The only way around that rule today requires a bankruptcy judge to approve a default.

In the public sector, the protections often go further. About half of the 50 states have constitutional or statutory guarantees, said Robert D. Klausner, a lawyer in Plantation, Fla., who represents state and municipal pension plans in more than 20 states. "The day you're hired, your benefits are locked in at a minimum level," he said. If a government wants to cut pensions, it cannot apply the cuts to people already in the work force, as a corporation can. It can only apply them to new hires, he said.

Governments are also studying the guarantees on retiree health benefits because of a new accounting rule that is now requiring them to calculate, for the first time, the total value of the health benefits they have promised to retirees. (continued page 3...)

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The numbers now being disclosed are daunting. Mercer Human Resource Consulting estimates that when all the calculations are done, the nation's states and cities will find they have promised a total of about $1.4 trillion, said Derek Guyton, a senior consultant.

Little, if any, money has been set aside to fulfill these obligations.

Mr. Maco, the Vinson & Elkins lawyer, said he feared that many towns and cities, particularly in places like upstate New York and along the Great Lakes, were about to discover that years of factory closings and job losses had eroded their tax bases so much that they had no realistic way to pay their full bills.

"The steel industry can shut down and close its plants, but that's hard for local governments," Mr. Maco said. After industries move away, the retired teachers and firefighters will still be there.

Pension funds can normally operate for many years with a shortfall, because they have investments to call upon and pensions are paid out slowly. But health claims, with little or no money set aside to pay them, can come due right away.

Some government agencies, like Chicago's municipal bus and rail authority, have set up a potentially explosive situation by arranging their retiree health claims to be paid directly out of their pension funds. "The taxpayers need to understand the seriousness of our situation," said Laurence Msall, president of the Civic Federation, a nonpartisan research group in Chicago. "It's not a far-off crisis."

San Diego's municipal pension fund was also responsible for retiree health care. But when the city's pension scandal broke, officials separated the health obligations.

"Now we're looking at a $3.1 billion debt, and $1.4 billion is health and $1.7 billion is pension," said Michael Aguirre, the city's independent attorney.

He is now in court, leading an unusually aggressive initiative to cut the city's pension obligations, arguing that benefits granted in 1996 and 2002 were issued illegally and must be annulled.

California law protects public pensions, but Mr. Aguirre is arguing that those protections conflict with other laws that govern the actions of public officials, which he says San Diego pension trustees violated. If the court agrees with him, the benefits owed to San Diego's roughly 15,000 city workers and retirees could go back to the level before the 1996 increase - a total reduction of some $500 million to $700 million.

Mr. Toneck, the disabled San Diego police officer, is not directly affected by Mr. Aguirre's case. He has petitioned the San Diego city council to reverse the cut in his pension, arguing that workers disabled on the job are the last people who should pay for a mistake that was caused by an ambiguity in the law.

The council has referred his petition to Mr. Aguirre, who is busy with the broader case.

Meanwhile, Mr. Aguirre said San Diego still had not developed a plan for paying all of its obligations, whatever the courts ultimately rule. He said he might ultimately have to try bankruptcy court.

"There's no good option," he said. "It's only painful."

Community Oriented Policing
Services (COPS)

POLICE UNION AND MANAGEMENT PRACTITIONERS COLLABORATE ON EXAMINING THE COMPLEX WORLD OF POLICE LABOR-MANAGEMENT RELATIONS

The U.S. Department of Justice Office of Community Oriented Policing Services (COPS) has released a two volume publication series that was written by police union leaders, police management officials, academicians, community activists and political consultants that for the first time goes inside the complex world of police labor-management relations and explains how the relationships between police unions and police management impact police professionalism and the delivery of police services. The first publication in the series, Police-Labor Management Relationships: Perspectives and Practical Solutions for Implementing Change, Making Reforms, and Handling Crisis for Managers and Union Leaders provides readers with an overview of issues confronting police managers and police unions as each side attempts to resolve conflicts that arise, not only during contract negotiations, but in disciplinary cases and highly charged media crisis. The accompanying guidebook, Police Labor Management Relations: A Guide for Implementing Change, Making Reforms, and Handling Crisis for Managers and Union Leaders offers practical methods and tools that can be replied upon during periods of conflict to reach an accord and reduce potential future conflicts.

Rising crime rates, reduced personnel, more demands for services, recruiting problems, increased media scrutiny of the police,

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technological changes to policing, continued privatization and civilianization of police jobs, community activist pressures on the police and political demands on police services all contribute to a highly charged and stressed work environment. Police managers are being pressed to reduce crime, control overtime, take on more tasks formerly handled by the federal government, and maintain discipline and morale. Police union leaders are facing generational challenges as Gen X and Y officers demand more and more wages and benefits even as wages and benefits are increasing at the fastest rate in history. The high turnover of police chiefs and police unions leaders create an environment that only rewards only short term goals. Efforts to address the long term needs of the police profession are set aside for another day that never seems to come.

These publications represent the first collaborative effort of police union and management practitioners and the observations of academics, activists and political consultants to present all sides of the problems and how each side sees potential resolutions. There are no simple answers to these complex problems and relationships, but from these guides the reader can gain some insights and methods to work through them and at least be prepared for the next crisis or conflict.

The series can be downloaded from COPS website at http://www.cops.usdoj.gov , or ordered from COPS Response Center at 800-421-6770.

These publications are two of the many technical assistance resources that COPS provides to state and local law enforcement agencies. Since 1995, COPS has helped law enforcement agencies hire more than 118,000 officers, and provided community policing training and technical assistance resources.

Here's a link to the press release by COPS. http://www,cops.usdoj.gov/Default.asp?Item=1939 This is also noted on the front of the COPS webpage (top right). http://www.cops.usdoj.gov/

Health care benefits cut

County supervisors vote to stop paying subsidies to thousands of retirees By Leslie Wolf Branscomb, STAFF WRITER

December 6, 2006 The county will stop paying some $30 million annually for health care for thousands of current and future retirees, virtually assuring the benefit will disappear, under a plan adopted by the Board of Supervisors yesterday.

Supervisors unanimously approved the cuts yesterday over the

objections of more than 200 current and former employees.

Pensioners now receive up to $400 a month to help pay for health insurance premiums, under a plan that is not guaranteed but has been in place since 1974.

The new rule, proposed by Supervisors Dianne Jacob and Pam Slater-Price, will eliminate the subsidies for most of those who retired after March 2002, when benefits were bolstered for the newer retirees.

Older retirees will retain their health care subsidies. Health insurance will not be eliminated for the younger group, but they will have to pay the premiums on their own.

Forcing the issue are new nationwide governmental accounting rules that will soon require public pension systems to list among their debts all future health care benefit payments to retirees. Doing so will increase the county's debt - at least on paper - and potentially hurt its credit rating and ability to borrow money.

Officials said the new accounting rules also will force the county to make higher contributions to the retirement plan, potentially costing $1.8 billion over the next 20 years.

"We, along with the taxpayers, simply can't afford to do this," Jacob said. "We know our proposal is tough, but we do believe it to be fair." Dorothy Sloter, president of the Retired Employees of San Diego
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County, urged pensioners to attend tomorrow's meeting of the county retirement board to reiterate their complaints, even though the matter is not on the agenda

Jacob is a member of the retirement board, which acts independently of the Board of Supervisors. The supervisors' action yesterday asks the retirement board to go along with cutting health care benefits for newer retirees.

If the retirement board does not cooperate, the county will stop contributing to the health care fund, effectively cutting off health benefits for all retirees.

Only three people spoke in favor of the change, including Lani Lutar of the San Diego County Taxpayers Association, who hailed it as a financially sound move.

However, many retirees said it was unfair to take away the benefits.

Several speakers begged supervisors for more time, and some said the decision should be left to the retirement board.

Others doubted there was a crisis at all. "This resolution is a solution in search of a problem," said Dennis Hayes, an attorney representing deputy public defenders and other court employees.

"What's the reason given today? An accounting change," Hayes said. "It's a paper change, not a money change."

Some disputed statements by county officials that recent retirees are better off financially and thus able to absorb the lost benefits. "You're considering a move that would truly hurt those who served you so well over the years," said Pat Stalnaker, a retired public information officer.

Stalnaker and others said they worked past the age when they could have retired, thereby inadvertently joining the group of recent retirees whose health care subsidies will be cut. The change will reduce Stalnaker's income by 11 percent, he said.

Last year the county reached agreements with its labor unions that require both sides to negotiate the establishment of trust funds to pay for future retiree health care benefits.

Still unknown is whether the county will contribute money to those trust funds, said Lois Balfour, interim executive director of the Service Employees International Union, one of the county's largest labor unions.

Several of the supervisors expressed regret before casting their votes. "This is not a pleasant thing to do," Jacob said, after pointing out that very few private companies offer guaranteed retirement benefits, let alone post-employment health care subsidies.