By MARTIN ESPINOZA
THE PRESS DEMOCRAT
The two challengers trying to unseat Sonoma County Supervisor Efren Carrillo both say the current Board of Supervisors has been too slow in dealing
with the current pension crisis.
Former Supervisor Ernie Carpenter, who is vying for his old 5th District seat, said the board already should have kick-started its pension overhaul efforts with non-union county managers, and that all county employees, including public safety workers, should make pension concessions.
“The point is they have to get started,” Carpenter said. “Where they start might be a question of strategy.”
Veronica Jacobi, a former Santa Rosa city councilwoman, said scaling back pension benefits for new county employees alone would not likely solve the mounting pension crisis. Current employees, she said, are going to have to give up something.
But pension change should begin with county managers and supervisors themselves, she said.
“How does one ask for concessions without giving,” she said. “When one is making more than $100,000 and expecting someone that’s making $40,000 or less to make concessions — I think that’s immoral.”
Carrillo defended the board’s efforts to control rising pension costs.
“It’s easy in the context of a campaign to make a lot of grandiose claims of what they will do and how fast they will do it,” he said.
He said the board has been “aggressively demanding answers from county staff about what the law will allow us to do,” and he believes the county leadership should and will set an example through their own concessions.
Carrillo would not give specific targets for such measures as benefit caps, saying he did not want to negatively affect current negotiations.
The changes the county is pursuing in labor negotiations and revisions to state law include capping pension amounts and scaling back pension spiking, reducing pension formulas and raising the retirement age for future employees.
The county also is seeking seeks to cut salaries for the entire workforce by 3 percent, as well as add four more Board of Supervisors appointees to the pension system board to increase public oversight of the system.
Supervisors are part of the pension system, and if Carrillo is elected to a second four-term, he would be vested and eligibile for retirement benefits after five full years of service.
Carpenter, who served 16 years as supervisor before retiring in 1997, receives an annual county retirement of about $18,000. If elected, he has two basic choices. He could continue to collect his retirement pay along with his new salary of $134,000. Or he could suspend his current pension and begin accruing service credit towards a second pension based on the pay and benefit provisions in his new term of office.
Jacobi’s proposals include eliminating pension spiking; capping benefits at possibly $100,000 or $90,000, which she says is sufficient in most cases; negotiating or, if necessary, imposing a two-tier pension system that gives employees reduced benefits compared to current employees.
The caps and lower tier benefits would “certainly” affect all new employees, she said. But, recognizing that the impact of such measures would not bear fruit until a later time, Jacobi said that “for existing employees we need to do something.”
She suggested giving current employees “some warning” so they can make the necessary career change. She said she would be open to look at a 401(k)-style alternative to the current benefits plan.
Jacobi proposed pension caps or reductions for anyone whose payout is above poverty level. Those closer to the poverty level would see a lower reduction to their benefits.
The county is in negotiations with Service Employees International Union Local 1021. Negotiations began April 11 and SEIU contract ends Aug. 31.
The county retirement system, which has an investment portfolio of $1.8 billion, has a long-term shortfall of $353 million. Pension bond debt as of July 1 is $495 million in principal, plus $279 million in interest.
Investment losses coupled with higher pensions promised to the current work force are key factors behind the current shortfall.
Carpenter advocates changing the pension formula that allows general workers to retire at age 60 with 3 percent of their highest year’s pay for every year worked. Carpenter said any changes should also apply to safety workers, who can retire at age 50 with a 3 percent of their highest year’s pay for every year worked.
“I think you have to start with all the unions,” he said. “I don’t know how you could do it with just one.”
Carpenter’s other proposals include capping retirement income. He offered an “arbitrary” cap of $125,000; eliminating pension spiking; changing pension calculations to an averaging system; reducing benefits for county management to a level comparable to other counties of similar size.
He acknowledged upper-level retirement income caps affect only a small number of the 3,992 pensioners, saying that caps are among “several things to be done.”
He also proposed implementing a two-tier system that may require employees to pay more for their retirement package, as well as lowering the investment risk of Retirement Board investments.
Carpenter was cool to the idea of swapping the county’s defined benefit plan for a 401(k)-type plans, which are preferred by private-sector employers. Such plans offer less security.
He said he is not ready to abandon the current pension system.