Advancing Pension Reform in San José


Advancing Pension Reform in San José

Interview with Pete Constant, San José, (CA) City Councilman

Like many cities, San José, California has been reckoning with a looming crisis related to unfunded government employee pension liabilities. The city is facing a $2.3 billion unfunded liability in its pension system, and the city’s annual pension contributions have risen from $73 million in 2001 to $245 million in 2012. That annual payment now accounts for over 25 percent of the city’s general fund expenditures, putting a strain on its ability to fund essential services.

This situation came to a head in June 2012, when 70 percent of San José voters passed a ballot measure-Measure B-to reform the city’s pension systems and put them back on a path toward financial sustainability. Among Measure B’s provisions:

  • Current employees are required to pay a larger portion of their salaries to maintain their existing pension benefits.
  • Current employees can choose to avoid the higher contribution rates by shifting to a new, less generous pension plan. New employees are also automatically entered into a less generous pension plan and must cover half of the cost of annual pension contributions.
  • The city’s practice of issuing pension “bonus payments” to retirees when pension investment funds have higher-than-expected returns is discontinued.
  • The measure lowered pension benefit levels and increased the retirement age for both current and future workers.
  • The automatic annual cost of living adjustments (COLAs) paid to retirees were reduced from 3 percent to 1.5 percent for new employees and current employees that opt into the newer, less generous plan. Further, COLAs may be suspended for up to five years in the event of a fiscal emergency.
  • Voters must approve all future increases in pension or other post-employment benefits for government employees.

One of the leaders of the pension reform movement in San José was City Councilman Pete Constant, a retired police officer and former board member of the San José Police Officers’ Association, the union representing the city’s law enforcement officers. Constant worked with Mayor Chuck Reed to design the language in Measure B and was a leading advocate of the measure prior to voter approval. Constant was also the sponsor of a separate policy initiative that ultimately ended the provision of lifelong pension benefits for San José elected officials.

In September, Reason Foundation Director of Government Reform Leonard Gilroy interviewed Constant on what prompted him to take on pension reform in San José, how he made the case to policymakers and citizens, the specifics of the reforms enacted, and more.

Leonard Gilroy, Reason Foundation: Can you describe the financial situation that drove San José voters to approve sweeping reforms to public employee pensions in 2012?

Pete Constant, San José (CA) City Councilman: The City of San José found itself faced with a decade of general fund budget shortfalls, and the shortfalls were very large in scope. If you were to take all of our budget deficits over the past 10 years and add them together, they would exceed $670 million, with two individual years that topped $115 million each.

And when a city is faced with such incredible budget challenges, it really has a limited scope in how it can respond, because as we all know, local governments have to balance their budgets every year. You don’t have the luxury of borrowing money or deferring like the federal government does-you have to deal with it in the year that you face it.

The city had to severely reduce the number of services that it provided to its residents, and we did that across the board. That involved everything from having our libraries closed half a week each, having new facilities like a police substation and four brand new libraries closed-we never opened them and had fences around them-not opening parks, deferring maintenance and slashing our workforce. We went from well over 7,000 employees to around 5,000 employees. And it really was a severe case of service reductions-everything from police officers and firefighters right on through the organization.

What that did is it put San José in a place where these budget difficulties were not just something that people were reading about in the newspaper. They were seeing, touching and feeling these service cuts close to home. They felt them when they drove down the road and saw unpaved roads. They saw it and felt it when they called police or fire and they experienced extended response times. They felt it personally when they went to take their children to the library and found it closed.

So that really was the situation, where there was not much that San José could do and still keep a city operating and functioning.

Gilroy: San José had experienced a dramatic ratcheting up of retirement benefits in the years, and really decades, before Measure B passed. Can you speak to that? What impact did this have on current city services?

Constant: The City of San José had a number of factors that collided to significantly contribute to this financial crisis and the pension crisis. First, there was a series of escalation of pension benefits provided to not only our current, working employees but also to people who had already been retired. Mayors and councils made promises that really didn’t take into consideration the future cost implications.

For example, people who had been hired on by the city with pensions that were a maximum of 75% of final salary saw some of those pensions escalate to 90% of salary. People who had retired in a pension plan where their annual cost of living increases were tied to the consumer price index found that the city had increased that benefit to the point where it was a 3% guaranteed annual increase. We also saw an increase in our retiree health benefits when our city council provided 100% paid healthcare-not only for the member, but for their entire family-upon retirement.

All of these individually might have seemed like minor adjustments-like taking a pension from 75% to 80%, or subsequently from 80% to 85%, and ultimately from 85% to 90%. But what we found was that these increased benefits were given at a time when salaries increased a very significant amount at the same time. For example, if you were a police officer working in this city in the year 2000-without supervisory rank, just an officer on the street patrol-the money you would make would have been $72,000 per year. And in 2000, that came with an 80% retirement. So someone who had served for 30 years would retire and get approximately a $58,000 per year pension for the rest of their life.

Fast-forward just a decade later to the year 2010, at a time when the pension benefit was only increased from 80% to 90%. At the same time, wages were increased by over 50%. So that same officer who had worked for the city for 30 years was making a salary of approximately $118,000 per year at a 90% pension. As you can see the simple math shows that that’s now a $106,000 pension a year for the rest of your life, plus the 3% guaranteed cost of living adjustments compounded every single year.

So for that period of 10 years the actual cash retirement benefit nearly doubled from $58,000 per year to $106,000 per year. It’s that exponential factor that we found-that by increasing salaries and benefits along the same track-that resulted in these huge unfunded liabilities that we now see top $3 billion in San José.

Gilroy: How did you get involved in this issue? And how did you educate yourself on the pension issue, given the typically steep learning curve?

Constant: I’ve always had a keen interest in retirement and pension systems. When I was a police officer-I was a police officer in San José for 14 years-I had run to be a pension board representative. Unfortunately that didn’t pan out for me, but that interest was something that was sparked early in my career.

When I decided to run for city council, one of the main reasons I ran was that I was concerned about the financial future of the city of San José. At that time I was out talking to people explaining what I felt was this impending financial disaster coming around the corner. And a lot of people looked at me and thought I was exaggerating a little bit or just looking for some explicit topic to run on. But we found a short time later that the fears I had were real and had actually come home to roost.

When I ran and ultimately got elected I asked Mayor [Chuck] Reed if he would assign me to be a pension board trustee. I really wanted to see how the pension boards operated, what types of decisions were being made and how we might be able to approach this.

As you know, the business of pensions is a very complex business. So I took it upon myself to seek out a number of educational opportunities-going through certificated course work at the University of Pennsylvania’s Wharton School of Business, the University of Chicago graduate business school, Stanford University’s fiduciary college, and a host of other trainings that were specifically designed to educate pension board trustees. And I felt that that really would allow me to make better policy decisions.

As I worked on these pension funds as a trustee, I immediately saw issues that needed to be addressed. Number one was the inherent conflict of interest when you have a majority of board members involved in the plan as members or retirees who have a direct stake in outcome of how contribution rates are going to be calculated or what benefits may ultimately be paid. With that, I launched an effort to change the governance structure of our pension boards that was actually successful. We were able to change the governance structure of our two independent pension boards to where now we have a majority of each board that are outside experts in the field and have no direct ties to the city’s pension plans.

I believe that was a critical first step in us addressing the issues. It also allowed me to have contact and deep discussions with peers who were entrenched in the investment world and really understood some of these complex issues around pensions, calculations and actuarial science.

All of this has led me to the point that now I’m studying at the University of La Verne in southern California pursuing a doctorate degree, and my field of study is focused on public pension systems and the decision-making that goes along with running these plans.

Gilroy: Was the pension crisis something that the city’s elected officials had been focused on prior to the passage of Measure B in 2012? What steps did you take to build the case for reform?

Constant: Initially, the city council had not been officially and directly engaged in pension reform, but as we were struggling to find solutions to the budget shortfall, we really started to assess where these drivers were in our budget that were causing us to have these increased costs throughout our organization. So we did a number of things.

First, the mayor put together a structural budget deficit elimination task force, which he asked me to chair. We convened a group of stakeholders from management, elected officials, union officials and residents to start taking a critical look at the city’s budget and see if we could identify those driving factors that caused the structural deficit, which did not seem like it was going to go away anytime in the future. That was the first step moving forward.

From there, we asked our city auditor to conduct an audit of our pension system to look at the actual contribution costs and how those costs could be attributed to the different areas of the pension system. Were the costs being driven by the administrative expenses, by the investment losses-which categories really had the effect? And that was a really illuminating audit, and we were able to see that it was the formula and the young age of retirement-where people could retire as early as 50 or 55 years old-that was really driving these costs. And it also really put a highlight on the fact that the 3% annual cost of living adjustment was one of the strongest driving factors in causing our contribution rates to go up at such a steep curve.

So we worked with a number of stakeholder groups and got out in the community through budget surveys, priority-setting sessions with our neighborhood associations and youth commission, and budget sessions held in each of the 10 council districts. The mayor, city manager and each council member in each district went out to the community and talked to their constituents about the structural budget deficit, the main driving expense-which was retirement contributions-and then within those retirement contributions what were the driving expenses. We went to great lengths as we spoke to these residents to tie a direct line between these escalating costs and the elimination of services that they were seeing on a daily basis in and around their homes, their communities and their businesses.

I think it was the education plan that we used going from neighborhood to neighborhood that helped us explain to people the complex problem that we had in very simple terms.

Gilroy: Actuarial assumptions and assumed rates of return play a key role in the outlook for government pension systems, and overestimating the assumed rates of return-making pension systems appear more solvent than they really are-is a fairly common problem with state and municipal pension systems. Can you describe the steps you took to get a more realistic assessment of the pension picture in San José?

Constant: Actuarial assumptions are really complex and key to understanding a lot of the dynamics behind pension systems. The one actuarial assumption that gets the most attention is the assumed rate of return, but there are a number of other assumptions related to issues that really drive costs. In fact, the typical actuarial evaluation will have a couple of dozen assumptions built into them. So we took a critical look at those assumptions and how they drove costs.

And what’s interesting to see is that our pension systems-like many others-were using a fairly high assumed rate of return. One of our plans was at 8.2% net, which means they really had to receive about a 9.25% return in order to net out all of their expenses and realize an 8.2% return, which is not only very high but is also very unsustainable over long periods of time. When you have a pension system investing over long periods of time, the goal is to have an assumed rate of return that will hold true of periods of 10-, 20-, 30-years and beyond. Historically these high rates of return might have made more sense than they do today for a number of reasons.

One reason involves the correlation or relationship between the risk-free rate of return that’s available out in the market and the assumed rate of return. Back when our retirement board was hoping for an 8.25% return, the risk-free rate of return in those years was in excess of 4%, sometimes higher. The difference between the two was about 4.25%.

But as you fast forward to today, you see that the risk-free rate of return is about 1% or even lower during some periods. And when you now look at an assumed rate of return that’s 7.25%-what our boards are using now-you’re looking at a difference that has to be made up in market gains of over 6%. And the profile of risk and the investment returns needed to bridge that gap have increased. I think a lot of it was a lack of recognition by pension boards across the nation that this one fundamental change was putting them in a position where they would have a very difficult time of ever catching up with their rate of return.

This is a very common problem in all pension systems, both local and state, and what we’ve done here in San José with our pension board-especially now that we have the outside experts-has been to slowly ratchet down that rate of return to bring it to a more realistic rate. In fact, many of our board members have expressed that they’d like to see that rate of return drop into the mid-to-low 6% range so that we are getting something that is realistic and sustainable over long periods of time.

Gilroy: Can you describe the key components of the reforms contained in Measure B?

Constant: Measure B is a very comprehensive reform. In fact it’s probably the most comprehensive reform package that’s been proposed or passed by voters. It can basically be broken down into four major categories.

The first major element involves new employees; that’s probably the easiest area to address. In fact, as you look at government agencies that have talked about pension reform, what they’ve mostly done is address the pension benefit for new or future employees. While this is very important, these changes don’t do anything to address your unfunded liability. But we know that it needs to be done.

So for new employees in the city of San José, they have a new pension formula. It remains a defined benefit plan, but the formula is 2% for each year of service. We increased the retirement ages so that people have to work longer before they’re eligible for retirement. We took the salary component and instead of being their highest one-year salary as the basis for their pensions, we changed it to a three-year average salary. And most importantly, we’ve made sure that the cost of providing the pension-both the normal cost of funding the pensions and the unfunded liability costs-are shared on a 50/50 equal basis between the employee and employer.

Why this is so important is that this really creates a shared risk perspective. So now when the pension board trustees are making their decisions, they not only have to keep in mind the city’s ability to pay-we know that many people look at governments and see deep pockets that can afford an extremely large amount of money when needed-but also take into account how the average city employee bears the cost of different decisions. On top of that, we also took the cost of living adjustment-which was 3% compounded-and changed it to tie it to the consumer price index and put a cap on it of 1.5% per year.

That’s what we did for new employees. The next category of employees is the current employees. For current employees, we clearly said that we recognize that the pension you have accrued and earned to date is yours-that’s a vested benefit-and we do nothing to take that benefit away at all. Everything you have is yours.

But if you want to go forward and stay in the pension plan that you’re in, you have to understand that the costs have far exceeded our ability to pay. So if you want to stay in it, then you must increase your contribution to the system to the system so that your contribution comes in at 50% of what’s needed to meet the unfunded actuarial liability. We did put a cap on that of 16% of pay, and we used a phased-in approach where it would phase in at 4% per year for four years.

We added a caveat that if the courts rule against the increased contributions, then we would reduce pay along those same lines so that we have the money to pay these unfunded liabilities that have been crippling the city. And of course when the unfunded liabilities are reduced, the amount of money that will be needed to pay the amortized unfunded liability will decrease, and then the employees’ contributions will decrease as the city’s does.

We know that’s an expensive plan, because we’ve been paying the price for these exorbitant pension costs for a number of years. So what we say to our current employees is if you can’t afford it-and I don’t believe that many can-then you have the opportunity to opt in to the lower-tier benefit that we are providing to new employees. And if you do that, everything that you’ve already earned is protected, and going forward you will earn the reduced benefit formula of 2% per year. And the higher retirement ages will be phased in over an approximately 15-year period. So if you’re close to your retirement window, you don’t suddenly see the age jump five or 10 years.

And if the employees agree to that, then they’ll have no responsibility for any existing unfunded liability. But like new Tier 2 plan members, they will have a responsibility for 50% of any future unfunded liabilities.

Our third element was retirees who are out there drawing a paycheck and getting their cost of living adjustments every year. Measure B clearly recognizes the fact that these are vested benefits that have been earned, so we do not take any benefits away from any retiree. But there is a provision that if the city council declares a fiscal state of emergency, then the council can reduce or suspend cost of living adjustments for up to five years or until the fiscal emergency has passed. And then going forward after that the cost of living adjustments would be reinstated.

The fourth main element involves a number of changes to the overall pension system. First, it redefines “disability.” We had a definition of disability that’s very broad that allowed people that have injuries that may or may not actually be disabling to receive full-disability retirements. What it says now is that you have to be unable to work in any function in the city before you’re eligible for disability. And if you’re eligible for a service disability-say you’ve already put 30 years in the department-you get your service disability but no additional retirement disability benefits on top of that.

And it codifies an agreement that the employees will share the costs for that retiree health benefit on a 50/50 basis. That’s really important because back in 1986, the city council came to an agreement with its labor unions to offer this really rich increased healthcare benefit as long as employees were paying 50% of the costs. Unfortunately the city never required those contributions, so two decades went by in which time we found this huge unfunded liability in our retiree healthcare-to the tune of about $1.4 billion-without having employees contribute. We’ve now codified that so that contributions must be made moving forward on an amortization schedule so that we can once and for all reduce this unfunded liability related to healthcare.

One of the other elements in our pension reform is that it eliminated the “bonus” checks that were being paid to retirees. We had a system that would pay out bonuses to retirees when the plan had a good year, even if the plan had unfunded liabilities overall. So we found ourselves in a year where we were approaching a $2.5 billion unfunded liability, and the pension fund was paying out bonuses to retirees. That was really important to eliminate because you’ll never become fully funded if you’re always skimming off the top. And there are a number of pension systems have these “13th check” bonuses that really should not be paid out, even when a plan is fully funded. Those funds should be used to drive down contribution rates and drive down the costs.

And importantly, any future increases to pension benefits will require a vote of the residents for approval.

So as you can see, Measure B is comprehensive in the sense that it has provisions that apply to current employees, new employees and retirees, along with a number of governance changes to solidify the system.

Gilroy: Pension reform is a complex issue. How did you make the case for reform to city voters? What were the most effective messages?

Constant: There were a number of things we did to inform the voters, and most of it started a number of years before we actually brought this ballot measure to the voters. I mentioned earlier that we implemented a change to the governance structure of our pension boards, and we talked with the community a lot about why that was important.

Then we went to the voters two years before the pension reform and asked them to change the charter, because our charter had very strict provisions on minimum pension benefits. We felt it was important to remove those charter limitations so that we could look at all of the driving costs behind pensions and have a comprehensive package of reforms. So we took that to the voters and had an education campaign around the need for that, and that gave us an opportunity to have a deep discussion with the residents about the pension problem and how we were looking to address it.

And then as we moved towards the actual pension reform ballot measure, we went to great lengths to talk to residents throughout the city about our budget and service delivery model and make direct connections between the cost of pensions and the impact it was having on the city to provide the services that the residents were looking for-and often not finding-simply because we could not provide them.

As we crafted our pension reform ballot measure, we went neighborhood by neighborhood as individual council members and talked to them about why these provisions were important, what they meant to voters, and quite frankly, what they meant to the future of the city.

So by the time we actually got the ballot measure on the ballot, people were very well informed about the impacts it would have and the great need we had for it in the city of San José.

Gilroy: What types of opposition to reform did you run into along the way, and how did you address those challenges?

Constant: There were a number of challenges. We had put together stakeholder groups where we got our union leadership together with our administrators and residents to talk about the pension reforms. Unfortunately we had the leaders of our employee unions not contribute anything of substance during these stakeholder meetings because they didn’t want to give any credibility to the fact that there was a problem. In fact, some of them went so far as to write editorial pieces for the newspaper that said that there was no problem-that this was a make-believe problem-and that it was something that we did not need to address.

Every step along the way, we found interventions by special interest groups-unions or employees. We had a local member of our state Assembly who called on the state auditor to audit our pension systems because he was convinced that what we were saying was not truthful to the voters. We had a number of competing actuaries present reports on what the pension system was and wasn’t in public meetings. There were just a lot of people blocking us at every stage of the game, but the mayor and city council members stood firm and moved forward on educating the public on what the real issues were. We told the public that we were not just making this up-we have a decade of history that we can show you to prove that this is a real and tangible problem.

When we actually got the measure on the ballot, it was interesting that all the unions took a step back, and no one publicly, aggressively fought the ballot measure. I think it was because at that point, we knew from our polling that this was a clear winner with the residents, who knew that it was something that had to be done-and had to be done soon.

So many of the unions at that point gave up and said that they were going to put all of their eggs in the basket of lawsuits, saying that when it passes we will fight it at every step through the legal process and try to have it overturned.

Ultimately, it went to the voters and passed with over 69% of the vote, a very strong statement by the residents that we need to implement this.

Gilroy: Measure B has faced a number of lawsuits that are currently being decided in the courts. If the courts rule against Measure B, what would be the effects, both with regard to the reforms themselves and to the ability to fund city services into the future?

Constant: You’re correct in saying that there have been a number of lawsuits. We’re fortunate in the fact that we got all of the lawsuits consolidated into one case, and that case was heard in Superior Court in July, so now we’re awaiting a ruling from the judge.

Initially there were some complaints filed with Public Employees Relations Board in the state of California, as well as a number of other unfair labor practice charges that have been filed as well.

The threat of Measure B being overturned is serious, and it’s real. But it is important to note that not all of portions of Measure B were challenged. In fact, the portions of Measure B that apply to future employees was not challenged at all, so we know that at least that element will survive.

But this current budget year, we were able to balance our budget primarily because we identified $20 million in immediate savings from the portions of Measure B we were able to implement right away. That’s $20 million that helped us to restore services throughout the city-getting our libraries open, keeping police and firefighters on the street and the like.

If Measure B were to be overturned by the courts, it would shoot an immediate $20 million hole in budget this year, and it would also ensure there’s no slowing of the increases in pension costs going forward. This year we already have over 20% of our operating budget being paid directly out to pension contributions. We can see that number increase steadily, passing the one-third mark and approaching half of our operating budget, going just to making these pension contributions. If the courts overturn it, then we will have to get back to work immediately to figure out another way to approach pension reform, because without it, you’ll see San José go the way of many other cities, like Stockton, San Bernardino, Detroit, Vallejo and others that are plunged straight into bankruptcy.

Gilroy: If Measure B is upheld by the courts, how would you assess the financial risks that San José taxpayers face, post-reform, with regard to the city’s government pension systems? How much would implementation of Measure B address the city’s current unfunded pension liabilities, as opposed to preventing the accumulation of future liabilities?

Constant: The financial risks to city will go down considerably once we are able to fully implement Measure B. We know that full implementation of the pension reform will allow us to realize a significant amount of annual savings to our general fund. It will provide a savings of approximately $68 million per year in contributions to our pension system going forward. Those millions of dollars can immediately go directly to restoring those services that have been cut over the last decade. That has to be our number one goal moving forward. There are a lot of things that need to be done in the city, but first and foremost, we need to restore services to residents who have been faithfully paying their taxes to the city and seeing fewer and fewer services provided.

I want to be clear that we might not be done with our reform-there are still things that need to be done. We still have a number of structural reforms in the area of governance of our pension systems that can be made. We just worked in conjunction with our two pension boards to have another study of our governance system for even more ways to be accountable to the public, to work more efficiently and to minimize the number of conflicts of interest. We just received that report, and we’re working with the pension boards to bring a ballot measure forward to the voters to change the charter to strengthen our governance system so that we don’t find ourselves looking at this same problem in another decade or so.

The structural reforms that we want to make to our pension systems are designed to ensure that, as we move forward, our pension systems are governed by people with a deep understanding of the complex issues that face our pension board members. We have an independent board of experts that are able to make decisions in a manner that will continue to minimize the risk to taxpayers and participants in the plan, to ensure that in the future we don’t build a new set of unfunded liabilities because of poor decision-making at the governance level.

Gilroy: What are some of the lessons learned from San José’s pension reforms that you would offer to peers in other states that may be contemplating similar efforts?

Constant: I think it’s important that government agencies across the nation, big and small, take a critical look at their unfunded liabilities and how those liabilities are affecting their contribution rates. We often see small jurisdictions that participate in larger state pension systems like CALPERS, and really don’t make that connection between their contribution rates and the unfunded liabilities that lie underneath those rates.

When these agencies analyze this and really see the problem that is facing them not only now, but in the near future, I hope that they strive for reform measures that will allow them to address not only the future liabilities for new employees, but also address those liabilities for the current employees-hopefully in a comprehensive manner like San José has been able to do.

Bringing pension reform to a city is a very difficult thing to do. It’s something that takes a lot of hard work, a number of years, and a very strong fortitude to bring forward, because it’s not a popular thing to do with the employees, nor is it a popular thing to do with the unions. And oftentimes, it doesn’t start to be a popular thing with the residents, but it’s necessary.

We have to remember that every time we create or perpetuate an unfunded liability, we’re taking today’s debt and assigning it to our children and grandchildren to pay. And we just cannot keep doing that. We have to find a way to bring some intergenerational equity to these bills that we’re paying, and we need to stop creating pension plans where we’re making promises without looking at the long-term implications associated with these promises.

Once a board or an agency is able to put together the pieces of a pension reform measure that it wants to implement or take to voters, it’s really important to take these complex issues and break them down into bite-sized chunks that the residents can understand. And in addition to that, you need to make a direct linkage between these complex issues and their everyday life.

Once you can make that connection between the city’s annual bill of X millions of dollars to the library around the corner from their house-or the response time it takes a police officer to come when they need you, or the number of potholes they hit on their drive to work-that is when the public really grasps the importance of this and the impact that it’s having upon their community.

Pete Constant was elected to the San José City Council in June 2006 and was re-elected in June 2010. San José, 10th largest city in the U.S.A. and the Capital of the Silicon Valley, is located in Northern California in the San Francisco Bay Area. Prior to his election as City Councilmember, Constant served for 14 years as a San José Police Officer.

Constant maintains one of the heaviest workloads on the City Council serving as chair of the Public Safety, Finance, & Strategic Support Committee, and as a member of the Rules & Open Government Committee. Constant also serves as the City Council representative on the City’s two retirement boards that govern the City’s pension funds.

Throughout his time on the City Council, Constant has led the effort to address San José’s structural budget issues that have contributed to 10 consecutive years of budget deficits. This work led him to reform the City’s pension system, which has been one of the main contributors to the City’s structural deficit problems. Constant worked to change the retirement boards’ governance and replaced members of the City’s retirement boards with financial experts. His continued work with Mayor Chuck Reed on this issue paved the way for a citywide ballot initiative in June, Measure B, that will significantly reform the City’s pensions, which passed with nearly 70% of the vote.

Constant is an Adjunct Professor of Leadership at St. Mary’s College, where he earned his B.A. in Management and his M.A. in Leadership. He has received extensive training and earned certifications on Pension, Benefits, Hedge Funds, Investments, and Management programs from the University of Pennsylvania, Wharton School of Business and Stanford Law School. Constant is currently studying at the University of LaVerne pursuing a doctorate in Organizational Leadership. He is also a Senior Fellow at the American Leadership Forum-SiliconValley, and a long-time member of the San José Rotary Club.

Other articles in Reason Foundation’s Innovators in Action 2013 series are available online here.

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