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GULLIXSON: Cutting through county fog

By PAUL GULLIXSON

Did Sonoma County supervisors break the law in the way they boosted retirement benefits for themselves and other employees 10 years ago?

The county grand jury posed that question earlier this year, and the county issued its formal response last week. As I read through it, I was reminded of former President Bill Clinton’s famous parsing of words: “It depends on what your definition of ‘is’ is.”

Paul Gullixson.

If you’ve forgotten, this was Clinton’s rationalization to the grand jury about why he wasn’t lying when he said “there’s nothing going on between us” in reference to one Monica Lewinsky.

His definition of “is,” as he explained, was that there was not something going on at that moment. The implication is — or was — that if the question had used a “was” instead of an “is” he might have answered more truthfully. But then everyone knows — certainly anyone who has had a child who has sought to debate the meaning of “clean” as in “your room” — that the discussion would then proceed to a parsing of the word “was,” rather than “is.”

The fact is that when one is determined to obfuscate, there’s no limit to what that individual will do to fog up the windows.

In that regard, the county did a thorough fog job with its report explaining how county officials “substantially complied” with the law back in 2002 when they ratcheted up retirement benefits.

It’s largely because of those increases that the county now finds itself in such hot water financially and faces having to devote a much larger piece of its revenue pie to paying for retirement benefits, making the portion of the pie devoted to fixing potholes and meeting other needs that much smaller.

“A public notice is required to be published two weeks prior to a Board of Supervisors meeting at which a pension increase is to be discussed,” the civil grand jury noted. “This notice could not be found in The Press Democrat archives.”

That’s because it doesn’t exist.

But it’s worse than that. The California Employees Retirement Law of 1937 clearly states that before benefits can be increased, the Board of Supervisors “shall secure the services” of an actuary, that the actuary “shall provide a statement of the actuarial impact upon future annual costs” and that “the future annual costs as determined by the actuary shall be made public at a public meeting.”

None of that happened — not in any way that meets the letter or the spirit of the law. The county sort of acknowledges as much in its response to the grand jury. But it’s hard to find it in the lengthy — nearly 40 pages in all — analysis and word-parsing.

County staff first writhes over the word “secure,” arguing that the law is “silent” on what it means to ” ‘secure’ the services of an actuary.” (That’s because the county didn’t do it. It relied on a series of less-than-thorough letters from an actuary to the Sonoma County Employees’ Retirement Association, which is a separate entity.)

The staff dodges and fades over whether the law is ultimately “mandatory” or just “directory,” meaning that the outcome is still irrevocable even though the county mishandled it. (The county ultimately argues that it did nothing wrong but adopted a number of changes to procedures to make sure it doesn’t do it again.)

But the worst waffling was saved for what the law means by the county “shall make that information public at a public meeting.”

That seems pretty clear to me. But not to the county counsel’s office or its consultants. Ultimately they decided that because the issue of enhanced benefits was discussed — in apparently broad terms — during supervisor discussions about collective bargaining agreements, pension obligation bonds and other subjects, and given that the actuarial letters were discussed in apparent detail at two separate SCERA governing board meetings (which were held in a public works conference room with relatively few, if any, members of the public in attendance) that this means the county “substantially” complied with the law.

Really? To me that sounds as if the county substantially blew it.

The general weaseliness of the county’s response can be summed up on page seven of the letter from an outside law firm — Steptoe & Johnson LLP of Los Angeles — essentially confirming all of the county’s arguments. “The public must be informed of the cost of pension increases on a timely basis,” the report acknowledges. “In this case, the public could have obtained this information if it chose to ask.”

There you have it. It’s the public’s fault! It didn’t ask.

The fact is the public is still knocking and asking questions — through public comments before the Board of Supervisors, through grand jury inquiries and through questions posed by this newspaper. And it’s still getting foggy answers.

One person who is leading the asking is Ken Churchill, a Santa Rosa winemaker who became fed up with all of the shenanigans about pensions and is now a director of a growing citizens group called New Sonoma that’s pressing for answers and changes. It was Churchill who first raised questions to the grand jury about how these pensions were approved. In the end, he found the county’s answers wholly unsatisfying.

“I think the supervisors just want this to go away,” he said.

He hoped the supervisors would seek an analysis from an independent, third-party group or some well-respected individual — someone who does not have a pension coming from the county. But that didn’t happen. But here’s the more significant question he wants the grand jury and the county to explore. Ten years ago, the presumption — as stated in numerous public documents — was that the cost of the enhanced benefits would be borne entirely by the employees themselves. What happened?

He estimates the enhanced benefits have cost the county an extra $323 million just in the past eight years. Of that, the employees have paid about $80 million. Given that, “how can you continue to have the county pay for it?” Churchill asks. “It’s a misuse of funds.”

We’ll delve into that issue more in a future column. The only thing I can promise at this point is more fog.

(Paul Gullixson is editorial director for The Press Democrat. Email him at paul.gullixson@pressdemocrat.com.)





22 Responses to “GULLIXSON: Cutting through county fog”

  1. Robert says:

    A quote from the New Sonoma website:

    “”Our Plan

    First, we will work with our current leaders and help them implement the changes we feel are necessary to restore our County’s fiscal health. And we will help to elect candidates who understand the financial impacts of their decisions and will represent the people’s interests over special interests.

    We will also work to ensure the County is properly managed by making New Sonoma an important part of our local government. Its purpose will be to monitor our government’s actions, provide input into important financial decisions, and ensure the interests of citizens and taxpayers are properly represented in all important financial decisions.””

    Sounds like they want to control the government without having to worry about those pesky elections.

    What is this? ” making New Sonoma an important part of our local government.”

    Sorry guys, your own mission statement dimes you off. You may vote. You each have one vote, but after that, it is up to the electeds. I don’t think people want their local government CONTROLLED by corporate heads, any more than it already is.

    Wow, you really put that out there on your site. You must think Sonoma County is as stupid as Washington DC thinks it is.

  2. MOCKINGBIRD says:

    Ken-maybe you don’t know that the unions ARE working with the board. I would direct my questions to management since they are the ones with the big salaries, perks and pensions some of whom can retire with more coming in than when they worked. They are the ones being given the authority all being approved by the BOS.
    In fact, SEIU and other unions have brought up all kinds of money savers that the BOS is ignoring. My guess is that the BOS has their pet projects and really like managers because they KEEP ADDING MORE while outsourcing and cutting rank and file jobs. The expertise that the public needs is with the rank and file.
    SEIU also told the BOS way back in 2008 that Bob Deis’s plans for the county workers would cost the county more money AND IT HAS. Besides contracting out rank and file jobs they are contracting out services that managers, whose job descriptions list those duties but don’t have the skills to perform those duties, to high cost contractors. One of those contracts involve negotiating with the unions at $250 per hour since the manager is not qualified to do the job she was hired to do (but is still working).

    There will be a day that the rank and file are gone along with their expertise. Left will be hoards of high paid high perk managers and expensive contractors cutting corners to line their own pockets. Privatizing COSTS MORE FOR LESS. The public will suffer. I’m not happy with the less than 5 rank and file to 1 manager 5:1. I’m not happy with all the new management positions being added and the filling of positions they’ve held empty (to fool the public) because that’s what’s happening RIGHT NOW.

  3. GAJ says:

    Keep shining the light Ken.

    I have joined; others should consider doing so as well.

    http://www.newsonoma.org/

  4. Dick Tracy says:

    Hey Ken, I think I found a typo in the Declaration of Independence. The USA is null and void, right?

  5. The County’s response to civil grand jury proved that the Supervisors and the retirement board did not follow the law by performing the required financial studies and presenting them to us before they approved the increase in 2002. And since they can only give themselves the authority to increase benefits by following the law, they never had that authority. As a result, the pension increase should be voided.

    This group of Supervisors decided not to hire an independent investigator to look into this as our organization had requested. As pointed out by Paul they just hired pension attorneys to act as their consultants. This is simply outrageous and a cause to worry that our current Board of Supervisors are as corrupt as the last group.

    But what is really upsetting to me and should be to you is that the deal crafted between the County and the unions required General employees to pay for 100% of the cost of the increase and Safety employees to pay for 50% of cost and that is simply not happening because the cost of the increase was grossly under estimated. Worse yet, our current Supervisors know it and they are not doing anything about it.

    Since the increase became effective in 2004, 2000 people have retired. If a career employee made $100,000 per year and retired at 55 in 2005 a year after the increase, they would have paid $3,000 towards the increase (3% of their salary), but under the new formula will receive an additional $22,000 per year for the rest of their life. If they live 30 more years to 85, the additional pension cost is $660,000. How is this having the employees pay for the increase?

    In 2002, the Supervisors and Senior County Managers, all since retired, crafted and illegally enacted a flawed plan and left the County with a huge bill it can’t afford to pay. These folks may have gotten away with their ill gotten gains, but they did it by blowing up their pension system and their actions will very likely result in the bankruptcy of the County.

    In Stockton, retirees have already lost their health benefits and may lose a percentage of their pensions. Their pensions will be treated the same as all other debts and it will all be up to a federal bankruptcy judge to decide.

    If I were a County employee or retiree, I would be advocating for real reform measures that would save my pension. I would start by telling my union to work with the Supervisors to find a long-term solution, such as lowering the pension formula going forward, cutting salaries at the top and freezing the rest until the pension fund is healthy again.

    My hope when I went to the Supervisors meeting to hear their response to the grand jury was that maybe our current Supervisors were different than the last group. That they understood the train wreck we are headed towards and would somehow find the courage to fight for us, to fight for what was right to get to the bottom of this mess, and try to find a way to make pensions affordable for all of us.

    But that day turned out to be just another day to put the employees and their own interests over ours and our kids.

    I hope you will go to our web page http://www.newsonoma.org and join us in our fight for pension reform and creating a new future for our County.

    On their side are the special intersts, the unions and lots of money, but on our side is something much more powerful, the truth.

    Ken Churchill is a director of New Sonoma, an organization of financial experts and concerned citizens working together to reform our government and solve the County’s financial problems.

  6. andrew simpson says:

    Our billion dollar pension mess is compounded not only by a huge unfunded roads budget; but by the looming, undocumented NEXT BIG BAD THING FROM THE COUNTY: Sonoma Clean Power.

    Sonoma Clean Power, authored by the Climate Protection Campaign and entailing capital investments in excess of a billion dollars, is a visionary, practical and effective initiative: if it were in competent leadership hands in the County. Its holds the genuine potential for massive reduction of air pollution, increase in employment; and more: a reset of the County’s wealth generation after the fashion of our Telecom Valley boom of 15 years ago, with positive influence on our local government’s ability to sustain pensions, roads, education and other vital services.

    That’s what should happen.

    But Sonoma Clean Power is in the hands of the Supervisors and managed by the Sonoma County Water Agency.

    It’s an echo of our pensions challenge; a mirror to our tribal political culture in Sonoma County.

    Sonoma Clean Power, as will become increasingly evident, is an instrument for economic renaissance in Sonoma County that’s been turned–not by conspiracy but by habit and deceptive reflex by our County leaders–into a vehicle for fraud, payoffs, breach of fiduciary duty, lies and deliberate, repetitive, heavy handed exclusion of legitimate public inquiry: including the withholding of vital financial information on Sonoma Clean Power and its financial structure.

    The entire Sonoma Clean Power feasibility study effort is an exercise in artful lying that mirrors County Counsel’s tortured evasions on the pensions issue. Here’s the most obvious one: Sonoma County’s Healdsburg enjoys electricity rates lower than PG&E’s, on average, by about 10%. Healdsburg is associated with the Northern California Power Agency (NCPA), a non-profit power cooperative that both purchases electric power and generates it.

    Here’s where that somewhat obscure fact gets interesting.

    The Sonoma Clean Power study effort has made some detailed inquiry into a joint effort with the analagous, current local power effort in Marin. But has made no effort to assess merging with or joint undertaking with Healdsburg and NCPA.

    Can we put that in perspective? If PG&E is the benchmark, then Healdsburg right now–and likely with Sonoma Clean Power rolled in–enjoys a material rate advantage over PG&E. Sonoma Clean Power as presented by the Water Agency would likely entail a slight increase over PG&E.

    But the Water Agency didn’t happen to mention that in their feasibility study. Why not?

    Because user rates and user experience have no bearing on Sonoma Clean Power as envisioned by the Water Agency.

    Sonoma Clean Power is a business-as-usual spoils and patronage vehicle.

    Under the deceptive (not to mention bumbling) hand of the Water Agency, Sonoma Clean Power isn’t a catalyst to economic renaissance in Sonoma County. It bids fair to become the straw that breaks the camel’s back: by layering another billion dollar debt burden on Sonoma County taxpayers; made worse by this prospect–the Water Agency is demonstrably incompetent in running a $60 million pilot for Sonoma Clean Power called Sonoma County Energy Independence (“SCEIP”). Imagine what is likely to happen if the Water Agency convinces the taxpayers to support a billion dollar credit card for the insiders who run, and squeeze, the County for insider contracts, fake consulting projects, inflated fees for make-work projects. Imagine what would happen if these operationally incompetent managers get their hands on a billion dollars, mismanage our power needs in a highly competitive market; lose rate payers back to PG&E; don’t have the revenue to cover the debt service on a billion dollars; default; trigger a credit black eye for all County issuers; and further disable the County’s abilty to pay for its base level of services including a road repair capital bill that may exceed $500 million

    This is old, bad wine–vinegar–in a fancy new bottle. This is the tribal political culture that underwrites our Board of Supervisors’ deceptive governance methods, hungry for a new way to feed the beast of spoils and patronage that is main fare in County governance.

    Our pensions crisis may be hard to fix. Sonoma Clean Power is a train wreck that’s avoidable.

    We just need to pay attention.

  7. Largeframe says:

    This reminds me of the baseball steroid debacle when Mark McGwire did not have the courage to own up to his mistakes on national TV in front of congress. He could have admitted to his mistakes, come clean, talked about the truth. If he had the courage to do that, he would have been a national hero instead of a zero. He could have become an example for millions of citizens about the impact of integrity. He could have rehabilitated his name. He would have served his country and family well. Instead he got weak in the knees, his voice cracked and he lied. What a shame. What a huge missed opportunity!

    What will our BOS do under a similar spotlight? What will they do? Will they be shining examples?

    Thanks, Paul, for this important work. And many thanks to newsonoma for their courage.

  8. Jean Anderson says:

    @Just Me

    We need more employees like you who worked hard and tried to do things right, and less of the greedy, self-serving ones who merely see taxpayers as piggy banks for their big salaries and pensions.

    As you say, this county, state and country need more intelligent voters who can think for themselves and will stop voting for the same lame left-wing dopes who are leading us over a cliff. Too many useful idiots, far too few informed voters who make the right choices and value personal liberty and independence over government dependence.

  9. Fiscal Conservative says:

    In response to ‘Just Me’,
    The public notice I referred to in the newspaper was a notice from the Sonoma County
    Tax Assessor, not a Bank or lender. I know several of these families and they do not
    match your preconceived assumptions.

    You suggest that the outrage over $2Billion in illegally gained pension that is accruing
    interest at the taxpayers expense is simply jealousy. No, in this situation, I am outraged. I
    have no jealousy for illegal gains. I also have no sympathy for a County employee who
    has gotten by just fine while hundreds of hardworking taxpayers are contemplating a
    ‘Ruby Ridge moment” in their lives when the Sheriff comes with an order to vacate due to
    tax default.

    I do agree that many Sonoma County politicians should not only be voted out of office,
    but personally more of them should be awaiting a trial.

  10. Just Me says:

    @Fiscal Conservative as you state, many hard working people are losing their homes while entitlist County employees are obtaining pensions that are illegal, rigged and overinflated.

    News Flash! those people are losing their homes because of their willingness to jump on the band wagon of over-inflated housing prices and poor loan practices by the banks ordered by a Democratic Congress and Senate. They CHOSE to live beyond their means. I’m sorry they are losing their homes, but hopefully they will also learn a lesson.

    As a retired County employee, I am NOT making the big bucks you think I am. I worked raising two children on my own without child support, on subsidised housing and making $50 a month too much for food stamps. I was NEVER an overpaid County employee. I purchased my home AFTER I remarried and bought within my means so that if anything happend to my husband, I would be able to keep my home on my income and whatever death benefit I might get from him.

    To all of you jealous non-County people, wake up and smell the coffee. You keep voting in the SAME KIND of people who will continue to do the SAME KIND of stuff. Valerie Brown is retiring, but look at who is left. Perhaps it’s time to vote the RIGHT kind of people in who will be fiscally conservative and conscientious about where our tax dollars go!

  11. angry taxpayer says:

    The Pension issue is big. The bigger issue is the Board is putting self interest above serving the public.

  12. Steveguy says:

    The crash is coming, whether you believe it or not. Add up ALL of the unfunded liabilities of the Cities, Agencies, Counties, States and the the Fed. All unsustainable.

    We have already gone off the cliff, just waiting for the HARD landing. Sorry for the reality….

  13. Steveguy says:

    Bear, you make some points up to the funding part. Way before 2008 there were cries about the unsustainable system. All ignored on the way to refinancing a home for trips and boats. Ignore the elephant in the room.

    I say FINALLY a great great kudos to the PD, as they had to already take the County to court for public records.

    More Paul, more, so that we know more. Lift the fog, it is YOUR job. Really

  14. bill says:

    It is clear, the supes broke several laws and the pension increases are not valid.

    There is enough evidence to bring this matter before a judge.

    The public who have been negatively impacted by this pension increase deserve to be paid back for this illegal pension increase which is bankrupting the county.

  15. bear says:

    Dear Friends.

    Let’s get straight here. The corporations and voters of California voted themselves decades of property tax breaks with Prop. 13 in 1978. Where is it written that voters get to directly approve taxes? NOBODY would vote for more taxes, not even me.

    The intended process was for elected politicians to establish taxes that covered the cost of government. If you didn’t like their decisions, you could quickly vote them out of office. That is NOT the current system, and all current problems center around this issue.

    Someone here is right on point when they noted that the BOS at the time was voting on their own benefits. And to cover their asses, they voted the same benefits to employees – always remembering that safety employees get a better deal than general employees.

    Then we had a national economic and stock market meltdown in 2007-08. If you want to debate the causes of THAT, I’m always available.

    We’re living in the aftermath of that. Lots of folks have lost a lot of their 401Ks and other investments. Property values sank and are only starting to come back.

    Damn, most retired County employees are NOT, NOT, NOT collecting big benefits. And most are paying huge amounts for limited health benefits.

    My freaking wife is 64 years and 8 months old, and she will freaking die without collecting Medicare and all the so-called benefits of a lifetime of work. Trust me, YOU have not contributed to the public good as my wife has.

    So before you throw us under the bus, consider the full circumstances and the full costs of YOUR actions. You may just have to deal with a deeply wounded grizzly bear.

    I don’t discount your arguments, just please don’t discount mine.

  16. Grapevines says:

    If your holding your breath hoping that this current BOS are going to do anything other than provide lip service by saying that they can’t do anything about this situation, your going to turn very blue in the face.

    We have already witnessed the “character” or total lack of it that permeates this batch of individuals that make up this BOS.

    We’re going down the toilet and queen Valerie and company are laughing at us all the way to the bank. All you democrats voted for this and now your stuck with it. Get used to being referred to as Bell, California-North.

  17. James Bennett says:

    If is the biggest word in the dictionary.

    If the people did our own comprehensive audit of CAFR it would be a real eye opener.

    Wonder if we’d run into the same resistance Rand Paul is in his efforts to audit the FED.

    How did we get here?

    Through the magic of incrementalism.

    By being preoccupied, largely through the gradual enslavement that is fiat currency.

    By ASS-uming.

    I know Ken, played tennis together. Glad he’s a good citizen too.

  18. Lisa Maldonado says:

    Well, this begs the question. Why was the Press Democrat not investigating the Board of Supervisor and reporting the news ten years ago? Perhaps because that Board was an almost completely different board comprised of many of the so called “pro business” favorites whom the PD never questions and continues to prop up in the pages of their newspaper? Physician, Heal Thyself.

  19. Big Jim says:

    $323 million taken illegally from Sonoma County taxpayers based on an illegally conducted process 10 years ago, yet as reported in the Press Democrat: “Zane and other county leaders, nevertheless, were unified in defending the legality of the enhanced pensions.” Of course they are – they benefit themselves in a blatant conflict of interest.
    The benefits should be withdrawn immediately, or at the very least, public employees should have to pay the full cost of providing the 50% increases they gave themselves (retroactive to boot!).
    There is no bigger crime in the history of Sonoma County, but don’t hold your breath waiting for justice to be done – who would meet that out? Not the BOS, not elected officials (mostly democrats beholden to the unions, not the courts, since they all benefit from this miscarriage of the public trust, and theft from taxpayers. Then who? No one unless you fellow taxpayers demand it! Call your representative today – or pay higher and higher taxes till you’ve nothing left to give.

  20. Taxpayer says:

    We need more people like Ken Church,and put an end to this corruption.This reminds me of Bell,CA.Truly amazing.

  21. Jerry Summerfield says:

    Somebody has got to say it. The county board of supervisors are an arrogant group and have been for years. They lack accountability and view their rise to office as though they were anointed and they have been by their masters in the public unions who represent the county employees.

    If a citizen had appeared at a phantom public meeting concerning the pension increases and questioned what was the meaning of what they were doing would have been ignored.

    Those pension increases were a foregone conclusion when signed sealed and delivered by the unions and the board.

    The entire way the board conducts business needs to be reviewed by an impartial third party, not the county council or county political hacks.

    There is something rotten in Denmark, I mean Sonoma County.

  22. Fiscal Conservative says:

    Reading this story reminds me of when my children reached their first milestones. It’s an amazing moment in time. The light comes on and history is changed.

    Many thanks to Ken Churchill,Paul Gullixon,Brett Wilkison and others who have brought this forward. This has been and will continue to be the largest story in Sonoma County.

    This County issue as well as the FUBAR Ca. State Pension system has been discussed in length on this site. People now understand. The crime against the taxpayers in Sonoma County has been exposed.

    I was out of town Friday night and the print edition of the PD was in my room. I was shocked to read one whole page, three columns and small print of the hundreds of our friends and neighbors who are losing their property due to County Property tax default. I found it sickening that so many hard working people were loosing their homes while entitlist County employees are obtaining pensions that are Illegal,rigged and overinflated.

    A crime has been committed. It needs to be investigated and brought before a judge and jury.

    Well done!