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Brown’s pension deal to have big local impact

By KEVIN McCALLUM & BRETT WILKISON
THE PRESS DEMOCRAT

After spending a day digesting the details of Gov. Jerry Brown’s complex pension deal pending in the Legislature, local officials say it would impact not only future local public employees but thousands of current workers, too.

Jerry Brown.

By enacting “anti-spiking” provisions for existing workers, requiring employees to pay half the cost of their pensions and shifting the landscape for labor negotiations, it is becoming clear that the governor’s plan goes beyond state employees and would have wide-ranging implications for local governments.

Future employees would face caps on pensions and less generous pension formulas.

The deal with Democrats in the Legislature could become law by the end of the week and for some, those changes are welcomed.

“It certainly seems to give us more flexibility,” Sonoma County Supervisor David Rabbitt said Wednesday after a day of meetings with county staff on the subject. “How we use that flexibility to make sure we come out on a sustainable path is yet to be determined.”

Union officials, however, warned of the dangers of making unilateral changes without bargaining with workers. Ed Clites, president of the 500-member Sonoma County Law Enforcement Association, said some of the changes were “wiping away 40 years of gains with the swipe of a pen.”

“It’s less pension and you have to stay longer to get there, and that’s really where the concern is,” Clites said, citing new tiers of benefits for public safety workers.

Currently, county public safety workers can retire at age 50 with 3 percent of salary for every year worked, a formula referred to as “3 at 50.” Clites said his members have expressed a willingness to drop to 3 at 55 for new workers.

But Brown’s proposal imposes a range of new public safety tiers as low as 2.7 percent of salary at 57 years of age. County officials say the most likely new tier for their public safety workers would be 2.5 percent per year at 55.

That’s where things could get dicey at the bargaining table. The county is in the middle of talks with most of its workers and just opened talks with its public safety workers, in both cases seeking salary reductions in addition to second tiers and anti-spiking provisions.

Clites suggested the imposition of even lower tiers for new workers would make them less receptive to the 3 percent compensation reduction the county seeks. He said the union may point to that lower tier and say “there’s your 3 percent — the governor did it for you.”

County Administrator Veronica Ferguson said officials had only about 12 hours to analyze the changes, but it is clear they could shift the negotiations.

“That will be interesting to see if the unions will be willing to agree to that new tier and continue to reach the 3 percent savings target,” she said. “I’m hopeful that the new formula won’t derail the conversation.”

Among local governments, the anti-spiking provisions would affect county government most, reining in generous extra pay and perks that CalPERS, the state pension giant that also oversees many city retirement benefits, does not recognize in pension calculations.

The anti-spiking provisions are strongest for future hires, limiting income that would qualify for pension calculation almost exclusively to base pay or salary. For Sonoma County, that would exclude such things as leave cash-outs, car, cash and uniform allowances and county contributions to deferred compensation retirement accounts.

“That’s a pretty big change,” said Eraina Ortega, legislative representative for the California State Association of Counties.

On average, those perks add more than 11 percent to the final earnings used to determine a pension for county employees. The boost is more than 14 percent for deputies and other public safety officers. Those perks added nearly $3 million to final earnings for the 261 county and special district workers who retired in 2011, retirement records show.

For current county employees, the anti-spiking provisions would cap leave cash-outs, including vacation and holidays and compensatory time, to those hours earned during a 12-month period.

The effect on county supervisors and elected officials would be greatest. Currently they can cash out up to 200 hours of administrative leave a year. They earn just under 80 hours a year and can bank unused hours.

Under the proposal, the county’s top pensioner, Rod Dole, the retired auditor-controller-treasurer-tax collector, would not have been able to cash out $19,994 to boost his pension of $254,625 per year. Instead, his cash-out would have been limited to $7,700.

Cash-outs and conversions for all other employees already are limited to 80 hours of vacation, 24 hours of sick leave and yearly holiday allocations.

Still, the county is hoping to exclude those perks entirely from pension calculations for current employees as part of contract talks.

Just how many future employees would be affected by the proposed pension caps is speculative. For those receiving Social Security, including county employees, the cap would be $110,000 a year, while those who don’t receive the federal benefit, the cap would be just over $132,000.

County payroll records from 2011 show 553 of 4,700 employees make at least $110,000 in salary and other ongoing pensionable pay. In Santa Rosa, records show 52 of about 1,200 employees made more than $132,000 in 2011.

One of the consequences of the changes could be that cities such as Petaluma might find it harder to recruit new workers from other agencies, said City Manager John Brown. Many workers might decide to “hunker down” where they are instead of looking to jump to a new organization out of concern that they’ll become a new employee and drop to a lower tier.

Another possible problem could be higher workers compensation costs from requiring employees to work longer, said Santa Rosa City Councilman Scott Bartley.

“One worker’s comp claims could negate all the savings that would be generated in a year,” said Bartley, who served on the city’s Pension Reform Task Force.

Clites agreed such on-the-job injuries aren’t in the best interests of taxpayers. “Our concern with that age is, do you want cops and corrections deputies and probation officers at 57 running around chasing bad guys?”

Just as union officials were quick to criticize the plan, which is on track for a vote Friday in the Legislature, pension critics said it doesn’t go far enough.

Former North Bay Assemblyman Joe Nation, now a Stanford public policy professor and pension critic, said the protests of some union representatives were “Academy Award worthy performances.”

CalPERS officials estimate the savings from the measures will be $40 billion to $60 billion, Nation said. But the state faces a $300 billion pension shortfall, by Nation’s calculations.

“Obviously, this does not solve the problem,” he said.

You can reach Staff Writer Kevin McCallum at 521-5207 or kevin.mccallum@pressdemocrat.com.





23 Responses to “Brown’s pension deal to have big local impact”

  1. Big Jim says:

    Unfortunately, California public employee unions got very greedy, especially public safety unions. No there is the inevitable backlash as the pay and benefits to those employees is far out of proportion to what private sector workers, the military, or federal workers doing the same jobs get. Current and future taxpayers cannot fund the largess, and unions are fighting tooth and nail to prevent any real reform. That is why i will vote yes on Prop 32 because unions have too much power in government and we need to reduce it.

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  2. MOCKINGBIRD says:

    Gaj, thank you. It’s gratifying that even conservatives can see the light. There was a time when Republicans supported unions. It hurts to be attacked for doing a good job for the public.
    Now you can spread the word and tell people to vote NO ON PROP32 which is purely a union busting prop sponsored by huge donations from big business. Always look where the money comes from (which is hard to do with Citizen’s United in effect). Unions are quite open about how they use their money and who they sponsor.
    Managers aren’t union and they run the county with the approval from the BOS. It’s beginning to look like the BOS won’t say no to anything the managers bring forth hence the contracting out of rank and file staff and the retaining and adding management positions.

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  3. Still Waters says:

    Sonoma County Sheriff’s department has a fully equipped gym just for the officers. Mr. Clites statement is absurd.

    The guys (and gals) who fix potholes on 100 degree days in the summer and clear roads in torrential downpours in the winter will still be expected to do their jobs until 67.

    What I don’t understand is why the Board of Supervisors and other elected officials get pension and health care after only 8 years of service. Are they too old to chase paper anymore?

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  4. GAJ says:

    @Union Guy.

    Funny, my daughter was in SEIU as is one of my best friend’s.

    They are taking it on the chin while the 3% vesting crowd rakes it in.

    If you’re one of the elite 3% vesting crowd protecting what’s “yours” and taking advantage of such things as spiking, then yes, I have contempt for you.

    If you are a member of SEIU then I have tremendous empathy for your situation and think that your leaders had a hand in creating the unfortunate scenario where you are sacrificed (as are services to the poor, the young and the aged), to maintain the status quo for the “3 Percenters.”

    I think my previous posts have made my position pretty clear.

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  5. R.B. Fish says:

    @ Just Me. Regarding rise in Workers Comp for those over 50. In NYC it was very common the 1980′s for cops, firemen, longshoremen, transit, etc. in this age group and( even those younger who wanted 6 months off)to submit fraudlent claims for job injuries. There were lawyers and doctors who were on a list.

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  6. Snarky says:

    READ AND WEEP AS GOVERNMENT RAPES YOU
    ———————–

    Retired Schools Chiefs Earn Big Pensions
    Phillip Matier and Andrew Ross, Chronicle Columnists
    Updated 3:46 p.m., Monday, September 3, 2012

    A check of the California State Teachers’ Retirement System shows that 77 retired superintendents – some from very small districts – are spending their golden years earning pensions of more than $200,000 a year.

    At the head of the class is James Enochs, longtime superintendent of the Modesto school system, who retired after 49 years with an annual pension of $301,000. (Enochs also got a school named after him.)

    Fredrick Wentworth of the San Joaquin County Office of Education comes in at No. 2 with $296,000 a year, followed by Edward Hernandez Jr. of the Rancho Santiago Community College District at $291,000.

    Closer to home, there’s Marilyn Miller, retired schools superintendent in wealthy Hillsborough, pulling down $268,000 a year, and Johanna VanderMolen, late of the Campbell Union School District, retired at $267,000 annually.

    In the East Bay, former San Leandro schools chief Christine Lim clocked out with a $244,000-a-year pension, and Brenda Miller of the Livermore Valley Joint Unified School District exited with $228,000 a year flowing into her pocketbook.

    Then there’s the average teacher’s pension in California: about $39,600 a year

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  7. Union Guy says:

    @Union Guy, what in the heck does “povertisize yourselves, minions” mean?

    Your contempt and loathing for public employees is overly obvious. You think they are all udeducated and beneath you and hate that some will retire with more than you. Yes, some of your past posts show your contempt and you go off in a fantasy suggestion. You have shown that you think of all union members as corrupt, a lie. I have never known one in 30 years. I have read about them in the paper thousands of miles away.
    You have shown that you think we are all your servant minions, not deserving of your consideration. I am not looking for your consideration or respect, I could care less about the opinion of people with your type of attitude. I have been called worse, by better. Yes, you are that transparent. I did the math 30 years ago and the math got better along the way. I went for the guarantee, not the gamble. In the end, the gamble crashed,and so far, I still have my guarantee. But take my word for it, I am just an uneducated, corrupt union guy.

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  8. GAJ says:

    Nice canard Juvenal.

    NFL players, (average career span is 3.5 years) can’t collect full retirement till 55.

    So let’s say you retire at age 25, you have to wait 30 years till you’re 55 to collect.

    And how much would that wide receiver get in retirement after waiting 30 years?

    $10,710 per year.

    There are lots of 57 year olds working in physically demanding jobs for which they must stay in shape.

    If Federal Public Safety employees can do it I’m guessing our pampered local Public Safety employees can do it also.

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  9. Steveguy says:

    57 ? Carl Malden chased bad guys, so did Cannon.

    So have real life cops and civilians and women.

    Heck, there are 65 year and older women that I wouldn’t want to mess with. Really

    Ohh, our so called ” saviors” are too tired to work after 50 ! Excuse me ? Aren’t they supposed the be the ‘best’ ?

    We may need a better ‘best’ without the greed.

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  10. Juvenal says:

    @GAJ

    ““Deterioration of skeletal muscle and its neural inputs begins between the ages of 50 and 60 years. Much of deterioration of skeletal muscle observed may actually be a result of inactivity, rather than age itself.”

    That’s why the very lucrative occupation, NFL Wide Receiver, provides work for so many players in their fifties…

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  11. GAJ says:

    @Union Guy, what in the heck does “povertisize yourselves, minions” mean?

    If you think a person needs to retire at 100% of highest years’ wages in order to retire then you have a very poor grasp on fiscal discipline and taking control of your own retirement.

    At retirement age, (in my case 51), you should have the house paid off, the cars paid off, the credit cards paid off and the kids out of the house and supporting themselves. That right there could easily amount to $50,000/year in expenses that you no longer have to support.

    But perhaps I’m in poverty because I still live in the same house we bought in 1984 and I still drive the same car I bought in 1994.

    In a few years I’ll have access to my IRA monies (started investing in my early 20′s) and Social Security so no worries here.

    But perhaps you feel that the bipartisan support in Sacramento for baby steps towards Pension Reform are misguided and wrongheaded.

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  12. Snarky says:

    Social Security for private sector workers.

    Social Security for public employees.

    DIS-mantle public employee pensions.

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  13. Union Guy says:

    Age won’t matter, you will still hate them for their benefits. I remember being laughed at for my wages in 2005. That same individual is applying for every county job he can since both his industries evaporated in 2007 and 2008.
    How things change. Remember, if you can’t retire on 35%, like GAJ, you’re doing it wrong. Quit shooting for 100% through investing and planning. Compromise, settle, and povertisize yourselves, minions. I guess we are all doing it wrong.

    I do wonder how the county passd a balanced budget if they are BK? Oh, that’s right, they are not BK. Some people just don’t like what they are doing. Welcome to life.

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  14. MendoTech says:

    First, the Governor’s “pension deal’ is not a deal at all. Re-read the article, paying special attention quotes from the union goons and their (mostly elected) supporters. It would only become a “pension deal” when there is agreement on all sides. That isn’t going to happen so long as the status quo is maintained.

    In this case, even the elected and appointed officials are expressing their concern and reluctance. They know the unions will not agree to this, and they are definitely NOT going to anger the unions as they all want to get re-elected. After all, they have their own pensions to protect!

    Brown has put this forward now to help get his huge tax increases approved in the upcoming election. “Hey, look: I’m doing something about the outrageous pensions that California governments are passing out.”

    Election over, he will back off as the unions and government officials flatly reject the proposals. “Well, I really tried, but the employees just won’t go along with it.”

    Some “deal.”

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  15. Joe says:

    Fire fighters get paid 2 hours per day to workout, so shouldn’t they be in tip top shape at any age because they do train everyday? So this age thing should be no problem for them. Oh wait, I have seen a few of them that are overweight, I guess I was wrong, maybe they all don’t work out everyday for two hours a day. If I got paid two hours a day to workout, I would be there everyday, I guess that’s just me. Getting paid two hours a day to workout, that’s funny….and what do the other F/Fers that don’t workout do for their two hours of free time?

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  16. Just Me says:

    Back when I worked at the County, I was informed (by the County) that there were studies done that proved a significant rise in Workers’ Comp cases in Safety employees over 50 and that it was actually cheaper to retire them with 3% at 50 than to keep them on until 55.

    How about we ask the County to pull that report out and republish it? Look back to the 2000-2005 years for it.

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  17. GAJ says:

    Dear lord, anyone that thinks there is a dramatic difference in strength/agility between a fit 50 year old and a fit 57 year old doesn’t have a clue.

    “Deterioration of skeletal muscle and its neural inputs begins between the ages of 50 and 60 years. Much of deterioration of skeletal muscle observed may actually be a result of inactivity, rather than age itself.”

    http://tkdtutor.com/TOPICS/Training/Strength/Age/Age-01.htm

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  18. Dick Tracy says:

    Have to wonder whether public safety management is still able to carry a coffee cup or a three-ring binder at 57. Seems like their job is like any other management level job.

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  19. Juvenal says:

    Better yet, do you want a 57 year old firefighter carrying your near-lifeless body down a ladder?

    Thumb up 24 Thumb down 16

  20. GAJ says:

    There are millions of 57 year olds doing very physical work.

    Vesting at anything above 3%/year is nuts; if an employee can’t live on 60% of their salary after 30 years of employment we shouldn’t subsidize their lack of fiscal discipline.

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  21. Big Jim says:

    “Our concern with that age is, do you want cops and corrections deputies and probation officers at 57 running around chasing bad guys?”

    If they don’t stay fit and capable of doing the job, replace them and reassign them to a lower paying desk job! Why pay them off early, while I will have to work till 70 to pay the taxes to fund the exorbitant salaries and pensions? Let’s have some fairness here – this argument is spurious.

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  22. Follower says:

    Gotta love someone w/a sense of humor!

    But as far as “age” goes… since when has that been a cause for concern? Oh, that’s right… since cops unionized.

    Before that I guess the bad guys couldn’t run as fast because they were drunk instead of spun.
    But isn’t 60 supposed to be “the new 40”?
    I guess times have changed on both ends of the argument.

    I have a feeling that if we were to put an end to Public Employee Unions we wouldn’t have any problem finding 60 year old seasoned, professional Law Enforcement officers willing and able to take on your average 20 year old punk.

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  23. steve humphrey says:

    . “Our concern with that age is, do you want cops and corrections deputies and probation officers at 57 running around chasing bad guys?”

    Why not just make a rule, if the officer is over 50 they can just shoot anyone who runs…

    just kidding

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