By BRETT WILKISON
THE PRESS DEMOCRAT
A proposed cap on pensions for all employees, a higher retirement age and less generous benefits for new county employees are among the recommendations being made by two Sonoma County supervisors studying pension system overhaul, according to an outline of a forthcoming report obtained by The Press Democrat.
Supervisors David Rabbitt and Shirlee Zane, who will release their report Thursday, are also proposing that employees share equally with the county in the cost of their pension contributions.
Other proposals would change the makeup of the county’s pension board and establish limits on county debt, including pension bond debt.
The moves are aimed reducing over a 10-year period the rise in taxpayer costs linked to the county’s retirement system. Those costs are up more than 300 percent over the past decade, and now represent 19 percent of the county’s total salary and benefit expenses of $504 million. They are set to climb to nearly 30 percent beyond 2015.
Rabbitt and Zane want that number back at 10 percent, where it was in 2000.
“We’ve got problems that we need to address,” Rabbitt said, adding that the report was aimed at “putting everything on the table.”
Public employee pensions have drawn increasing scrutiny in the county, statewide and across the nation as soaring obligations to retirees leave less taxpayer dollars for already-stretched public services.
Sonoma County supervisors, administrators and labor leaders launched several parallel efforts this year to deal with the issue.
The committee headed up by Rabbitt and Zane is the first to present its findings and goals, which were shared last week with labor leaders and county officials in a two-page outline leaked to The Press Democrat by a source who attended the meeting.
The larger 100-page report is set to follow last week’s unveiling of Gov. Jerry Brown’s 12-point plan for overhauling public pensions.
Based on the outline, some of the state and county proposals are similar, including a bid to end pension spiking, where employees boost their pension in their last year through extra pay and perks above their base salary.
The proposed increase in retirement age for new employees is another shared proposal. While the governor’s plan put forward new ages of 67 for general employees and something less for public safety workers, the county outline does not provide figures. Sources close to the discussion said they’d heard talk of a new standard of 55 for safety workers — up from 50 — and 65 for all other employees, up from 60.
Although not noted in the outline, Rabbitt also said the county is studying a shift of new employees to a hybrid pension plan that includes a traditional defined benefit guaranteed by taxpayers and a 401(k)-type account where employees bear most of the investment risk.
Rabbitt and Zane also put forward a proposal to limit benefits to 100 percent of an employee’s base salary, a measure not proposed by the governor.
The goal, Rabbitt said, was to find a mix of ways to reduce county costs both quickly and over the long-term and provide a retirement benefit “that is fair, competitive and sustainable for everyone in the county.”
Labor leaders say they agree with that stated goal and the need to address rising retirement costs.
But in interviews on Tuesday they questioned both the cost benchmark in the supervisors’ report and the impact of some of their reform proposals.
“We all feel the same. Something has to be done,” said Ray Leonard, chairman of the Sonoma County Administrative Management Council, a group of unrepresented administrative and middle managers. “The questions continue to be how it’s structured, how deep does it go?”
Other leaders stressed that any changes needed to come through agreements at the bargaining table. All but two county employee groups are set to enter negotiations next year.
Rabbitt and Zane conceded the point in the outline, saying that some of the proposals would be subject to bargaining and others to legislative changes.
In the latter group is the supervisors’ proposal to double the number of Board of Supervisors’ appointees on the county pension board. Currently the Board of Supervisors appoints four of the nine voting members. The four additional appointees would not be former, current or contract employees. Their inclusion, officials claim, would provide better, unbiased input on pension decisions affecting taxpayer money.
Rabbitt, who was elected last year and serves on the pension board, took aim at some of those past decisions, saying they had not served the county well.
“When times were good, people were offering the sky. I think we need to be cognizant that all those decisions had consequences. The evidence is in the annual costs,” he said.
Zane could not be reached by deadline Tuesday. The three other supervisors will get their first look at the report after its release Thursday.
Ed Clites, head of the Sonoma County Law Enforcement Association, was critical of the proposed changes to the pension board and suggested the county could face opposition on that front.
Legal battles could tie up other proposals, especially any move to change benefits for current employees.
California courts have been fairly consistent in upholding retirement benefits as vested rights for existing workers. The state’s current legal standard also holds that any change that results in a disadvantage to workers must be accompanied by a comparable, offsetting advantage.
Some fiscal watchdogs calling for more aggressive pension changes admit frustration with those legal protections, looking fondly at more permissive laws in other states.
At least one county critic shown the recommendations Tuesday called the proposed cost benchmark “unrealistic.”
Tom Lynch, a Guerneville resident and county planning commissioner, said the projected rise through 2023 in payments on existing pension bond debt of $515 million will prevent the county from reducing its pension costs to anything close to 10 percent of total compensation.
“There’s no way,” said Lynch.
He said more “dramatic changes” affecting the current workforce were needed. A ballot measure could be the only way to force the issue, he said.
The cities of San Francisco, San Diego and San Jose may take that path this year and next, following similar moves by San Luis Obispo, Los Angeles and Redding to contain pension costs by putting measures before voters.
“I don’t see a lot of hope for change with what they’re proposing so far,” said Lynch. “We can’t afford any more time wasted.”