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County takes small step toward pension cutbacks

By BRETT WILKISON

THE PRESS DEMOCRAT

The Sonoma County Board of Supervisors took tentative action Tuesday to reduce the cost of pensions for a small group of future employees.

The board authorized a new, lower set of benefit formulas for future hires who carry over from other government retirement systems their years of service and eligibility for benefits.

Because those employees make up a sliver of the future workforce, the change alone would put only a minor dent in the county’s pension costs.

But it could be the first official overhaul of the county retirement system among the slate of more significant cost-saving measures proposed in contract talks or mandated by state law to take effect Jan. 1.

Supervisor David Rabbitt called it a “small but important part” of the county’s plan to rein in skyrocketing pension costs.

Provided unions agree, the new benefit tier would apply to those employees hired after Dec. 31.

The change would affect a small segment of the future workforce. Only about 12 to 13 percent of county employees come to their job with previous government service that makes them eligible for benefits from Sonoma County. That carryover is allowed under so-called “reciprocal” agreements common among city, county and state agencies in California.

The change alone is expected to save the county a marginal amount off its annual pension costs, starting at an estimated $100,000 in the first year and growing to about $780,000 by 2022. The county’s current annual contributions to its pension system are $47.9 million. Including payment on pension bond debt, total annual costs are about $94 million, or more than 400 percent what they were in 2000.

The change is not expected to lower the county’s current unfunded pension liability, set last December at $353 million.

But county supervisors and officials argued that it does provide some savings to taxpayers and closes a loophole in state-mandated pension reform. Without the board action, officials said, those new hires covered under reciprocal agreements would have been eligible for the better pension benefits owed to all current employees.

Other government agencies throughout the state have been acting to close the same loophole, said Rabbitt, who cast a similar vote recently in his board post on the Golden Gate Bridge Highway and Transportation District.

In Sonoma County, current workers can retire at age 60 with 3 percent of their salary for every year worked. For public safety workers the benefit is the same but the retirement age is 50.

Under the new formulas for qualifying future hires, those formulas would change to 2 percent at age 61.25 for general employees and 3 percent at age 55 for public safety employees. These employees would retain benefit levels earned from previous employers for prior service.

The change would also come with some reduction in the employee cost of pension contributions, now at about 12 percent of pay for both groups. The reduction would be equal to about 2.6 percent of pay for general workers and 0.4 percent for public safety workers.

The board action did not address benefit formulas for the larger group of future hires — those without previous government service that qualifies them for benefits. Under state legislation approved this year, those new workers as of Jan. 1 are set to go to even lower benefit tiers, providing for general employees 1.8 percent of salary for every year worked at a retirement age of 60, and for public safety employees 2.5 percent of salary for each year of service at age 55.

The new state law also mandates changes in how pensions are calculated, including limits on what kind compensation can be factored into pensions. In contract talks, the county is seeking more aggressive limits that would also affect current employees.

Now more than seven months in for the county’s largest labor group, those negotiations continue to grind on, with employees facing proposed concessions equal to 3 percent of their total pay and benefits.

County officials said they did not expect unionized employees to oppose the pension changes for future hires authorized Tuesday. A similar change is to be authorized next month for future hires not represented by bargaining groups.

Of Tuesday’s vote, Supervisor Mike McGuire said, “This is another part of the puzzle to look at short- and long-term savings as regards to our unfunded liability.”

You can reach Staff Writer Brett Wilkison at 521-5295 or brett.wilkison@pressdemocrat.com.





23 Responses to “County takes small step toward pension cutbacks”

  1. David Stubblebine says:

    @Roy: WHAT are you talking about? What public union leaders are making more than mean CEO wages? Remember, SEIU and Operating Engineers are private unions that represent mostly private sector workers and some public employees so their executive pay does not count in your point. Most true public employee associations, like those that represent every police & fire employee in Sonoma County (except CHP) elect their leaders from their midst and for all their extra work to effectively represent their constituency they get nothing in the way of wages.

    Until you post specifics with sources, I will consider your post just another employee-bashing pack of lies, a la Fox News.

    Thumb up 2 Thumb down 4

  2. Skippy says:

    The retired public employees got their unions to bribe temporary politicians into giving them completely unsustainable pensions, and they think they will go on receiving checks from bankrupt little Big Govts forever.
    But Cal. has no printing press like O’Bama has, so from who shall we confiscate the funds?
    The rich folks who left years ago?
    The CEOs with their tax shelters?
    The Hollywood stars?
    Mendo dope-dealers?
    When the checks stop coming, living out of state will mean starving out of state.
    How’s that gonna taste?
    Enjoy it!

    Thumb up 2 Thumb down 4

  3. MOCKINGBIRD says:

    James Ross-like me you are barking up the wrong tree on this blog. Most on here are convinced that ICLEI is a conspiracy, and Area 51, oops, agenda 21 is too. Facts mean nothing. I explained the Hostess problem which happens to be management incompentence, all of it being in the media prolifically and yet someone starts bashing the unions again and mentions Hostess. Didn’t read my post or is not interested in doing any real research on the facts and history of the case.

    I say we go back to the 90% tax on the rich like in Ike’s era (the rich were still rich) when there were fewer dodges for them as well. Give the middleclass worker and business owners a break. Take back our secure jobs with decent wages, benefits and pensions, all of which has “trickled” up to the rich where it’s concentrated in people’s pockets who refuse to use it to stimulate the economy or to create jobs. Let the government take that 90% tax AND CREATE INFINITE INFRASTRUCTURE JOBS, HIRE TEACHERS AND CUT CLASSROOM SIZE AND GIVE THE CHILDREN THE TOOLS THEY NEED, HIRE POLICE AND FIREFIGHTERS, MAKE COLLEGE LOWCOST FOR THOSE THAT QUALIFY (like California once had).

    People are clueless who just can’t seem to understand that their money was taken from them, not by unions, not by the government, but those at the top who are obscenely rich and don’t want to pay workers for their productivity (like Hostess).

    Thumb up 2 Thumb down 2

  4. Follower says:

    @MB
    Are you suggesting that our beloved County Officials are NOT “incompetent”?

    Are you suggesting that they are NOT asking US for MILLIONS for their own incompetence?

    Or are you just trying is your bird brained way to accentuate my point?

    If it’s the latter… thank you.

    Thumb up 13 Thumb down 5

  5. Roy says:

    Well Jim, perhaps you should take a look at what Union’s are paying their CEO’s…with perks are included it’s well above the mean CEO pay for a fraction of the skills.

    The fact is union administrative management is almost as wasteful as public agency management and less productive.

    Thumb up 12 Thumb down 5

  6. Rocky Barufi says:

    Ahh… the tears of the pension envious…they’re like honey to me. It confirms that I made the right choice. I’ll be taking my substantial publicly-funded pension out of state after I retire too. Reform all you want, I’ll get mine no doubt. Boo effing hoo

    Thumb up 3 Thumb down 16

  7. Snarky says:

    James Ross:

    Your post is pointless and flawed until you define what an “average worker” is.

    The devil is in the details.

    Until you define what you are saying, it means nothing at all.

    WHAT IS AN “AVERAGE WORKER” ??

    Thumb up 10 Thumb down 6

  8. Jim says:

    CEO pay is irrelevant in the discussion of public employee pensions. CEOs are paid through revenues generated by a public company. If a company overpays its workers and executive management in relation to revenues/profits it’ll go bankrupt. Look at the airlines, Hostess, auto companies, etc. Labor cost drove the companies into bankruptcy.

    With public employees, the government IS bankrupt but won’t go away. Promises have exceeded “revenues” to staggering levels yet the government continues to expand. This can’t happen in the private sector because there wouldn’t be any money to pay the promises. Well, I guess that’s not true. The government bailed out many union controlled companies that were bankrupted by excessive labor costs. GM is a great example. Completely bankrupt because of labor costs that were twice what competitors were paying. The government bails them out by paying $38/share for GM. Anyone know what the new GM stock is trading at? $25. What a great investment we taxpayers didn’t have a choice in making.

    Anyway, unions aren’t the problem. Most people aren’t anti-union. If a private company like Hostess wants to overpay for labor, cave into the union demands and eventually go out of business because revenues can’t support the expenses…so be it. It is PUBLIC EMPLOYEE UNIONS that are the problem because they excessive pay and benefits are paid for by the taxpayer. I can choose not to fly United, buy GM vehicles, etc. I can’t choose to not pay my taxes.

    Thumb up 16 Thumb down 7

  9. Reality Check says:

    “50 years ago the CEO to Average worker pay was 30 to 1…. Today it’s 400 to 1.”

    Why pick on CEOs? The same thing has happened to the pay spread between sports, movie, and music starts and the average working stiff.

    One of the causes might be tax rates, but other things are also going on. Celebrity worship, massive numbers of low-end immigrates that drive down entry-level wages, and just the fact that talent seems to pay more these days.

    One fact is not in dispute. Even if one upped taxes on the rich, the amount of money per poor person is too little to change much.

    Thumb up 20 Thumb down 6

  10. James Ross says:

    Ironic that there are so many ANTI union, ANTI pension people out there but they either are unaware or too brainwashed to consider: (and even when shown the evidence they are unable to see the disparity)

    50 years ago the CEO to Average worker pay was 30 to 1…. Today it’s 400 to 1.

    Report: Firms spent more on CEO pay than taxes
    Twenty-five of the 100 largest U.S. corporations paid their chief executives more than they paid the government in federal income taxes last year, according to a report released Wednesday.
    The nonprofit Institute for Policy Studies says the 25 CEOs averaged $16.7 million in salary and other 2010 compensation. Most of the companies they ran, meanwhile, came out ahead at tax time, collecting tax refunds that averaged $304 million, according to its review of public filings. http://tinyurl.com/3qnyamm

    The GOP’s Intellectual Dishonesty Regarding Bush Tax Cuts For The Rich
    Republicans say that tax cuts for the wealthy must be extended to protect the economy and small businesses, even though neither would be affected by their lapse. http://tinyurl.com/2cgltuc

    “The Fine Print” by David Cay Johnston http://goo.gl/KW6Lv
    “Republic Lost” by Harvard law professor Lawrence Lessig http://tinyurl.com/3mdlcrd
    According to Lessig, it’s not the top 1%, it’s the top .05% that control Washington.

    Thumb up 11 Thumb down 16

  11. Grapevines says:

    Next they’ll announce that they will authorized a new, lower set of benefit formulas for future hires who are left handed and have 6 fingers and toes (provided unions agree)

    And then they will sit there beaming with this quizzical look on their faces why we are not just jumping for joy over what they have achieved.

    With a BOS like we see, no wonder they graduate up to being full class jerks that fools elect to the state legislature.

    Thumb up 16 Thumb down 5

  12. MOCKINGBIRD says:

    Follower-you must have missed the FACT that Hostess’s union employees gave up quite a bit the last time the company was in trouble. The management IS INCOMPETENT. They took the money into their own pockets instead of investing into the company. Now the company is in trouble AGAIN because of their incompetence. They have the gall to go into court asking to gut the union members AGAIN and also ASKING FOR MILLIONS IN BONUSES FOR THEIR OWN INCOMPETENCE. It wasn’t the union or the workers that caused Hostess’s fall, it was the management.

    It’s the same with the county. In the last ten years 567 rank and file jobs were eliminated against THREE MANAGEMENT POSITIONS. The managers are the ones with the perks that are pensionable, not the rank and file. The county has again eliminated positons, specifically at the refuse dump-the staff have received notices because the county is contracting out to a company that will likely make billions on the recycling and other services. The county employees are competent, experienced, have been working there for years and years and answer to the county. The contracted company answers to NO ONE and they are negotiating for a 20 year contract. My question is why isn’t this news in the Press Democrat?

    These aren’t the only rank and file jobs currently being contracted out. And everytime they contract out rank and file jobs MORE MANAGEMENT POSITIONS ARE ADDED. Instead of the county workers working to make money FOR THE PUBLIC at the refuse dump, the contractor will be making the money, cutting corners like contractors do, paying their employees less and pocketing the money into their own CEO pockets.

    Yeah, people, beat up on the union employees, call them names, despise them, but they work for YOU AND THEY KNOW IT. It hurts to be hated for doing your job competently and because you had the forsight to go to college, take a test for a job, get that job, and work for 27 years in one place.

    Thumb up 12 Thumb down 18

  13. Taxpayer says:

    Smoke and mirrors

    Thumb up 14 Thumb down 7

  14. James Bennett says:

    Couple of good posts.

    This story is a little soft pedal propaganda.

    YES, they are pretending.

    Playing public official.

    The game is DESIGNED to fail.

    THAT’S the whole idea.

    For example: ICLEI never rewards its charters for saving money. They are rewarded for crashing. Installing their crap and encumbering the tax payer with insurmountable debt.

    Brought to you by the same basic cabal that brings you never ending wars, The Federal Reserve and the notion of gifting trillions of dollars in diplomacy to countries that probably won’t send a X-Mas card.

    See, these One World Government supporting globalists (that our public servants are in effect working for) don’t want to remodel.

    They want a whole new structure.

    Unfortunately, that means demolition.

    The multi-faceted carefully orchestrated, socially engineered demo of our country.

    That is what we are witnessing.

    Thumb up 23 Thumb down 5

  15. bear says:

    Get ready to pay way more in actual salaries, or drive a lot of experienced employees into retirement under current conditions. or settle for the least qualified to provide the services you freaking demand.

    Then you genius people will take their jobs? With what qualifications?

    A sick joke. KMA.

    Thumb up 8 Thumb down 19

  16. Sonoma Coma says:

    @Tom

    You can’t ever ever ever use the word Ponzi when talking about pensions….

    Tom Drumm warned us all that we would be committing “liable and slander” if we continued to use the “P” word.

    So just say “Ponzi-ish”

    I really miss Tom Drumm’s condescending posts.

    Thumb up 14 Thumb down 5

  17. Tom says:

    MR. Ponzi would have been proud

    Thumb up 25 Thumb down 11

  18. Snarky says:

    You see, its all about PRETENDING.

    The government is an expert at PRETENDING.

    And the reason the government PRETENDS to do this or to do that….is because they have discovered that the public falls for that scam.

    Yeah. They are “working” on the out of control pension problems.

    And just like Prop 30 that they promised would solve the education financing problem in CA, the moment Prop 30 passed… the government liars were fast to start saying they needed MORE tax hikes or fee hikes.

    Yes. The government pretends but they also LIE.

    Thumb up 34 Thumb down 10

  19. Follower says:

    …and Hostess took one BIG “step”!
    The canaries are dropping like flies and we just keep mining away.

    Thumb up 40 Thumb down 11

  20. Jim says:

    QUOTING…”The change alone is expected to save the county a marginal amount off its annual pension costs, starting at an estimated $100,000 in the first year and growing to about $780,000 by 2022. The county’s current annual contributions to its pension system are $47.9 million. Including payment on pension bond debt, total annual costs are about $94 million, or more than 400 percent what they were in 2000.

    The change is not expected to lower the county’s current unfunded pension liability, set last December at $353 million”

    Um, Why is this a story? The unions haven’t agreed. The change is immaterial to the massive problem. This is a joke. Must be an election year.

    Thumb up 40 Thumb down 11

  21. Snarky says:

    The key word, of course, is “SMALL” cutbacks.

    The second key word, of course, is “TOWARD,” because simply moving in the direction doesn’t make it happen.

    And, when you consider that the biggest chunk of public pensions go to the “public safety” types like “Grapevines,” you gotta ask yourself… why?

    Why for example, would ANY police dept hire a bonehead officer so stupid as to write a 3 year old a citation??????

    —————–

    “Officer Fired For Ticket To 3-year-old For Public Urination”

    Top News
    November 21, 2012
    By: Tracey Parece

    SF Examiner Online
    Nov 21, 2012
    ——————–

    Yep. That “officer” was upset at being fired because he was a “veteran officer of 17 years” and thus deserved better treatment by the city.

    Google the story. Just simply amazing.

    Thumb up 24 Thumb down 14

  22. Marc says:

    Let call it what it is, Baby steps and will do Nothing in our lifetimes to help. We will be bankrupted before they change anything that will help and they will be out of office with Their pensions.

    Thumb up 39 Thumb down 12

  23. Critic at Large says:

    Of course the union will not oppose this miniscule pension adjustment which affects none of the current employees. These mythical future employees have not signed up and have no pension benefits.

    The problem with the county and its $353 million dollar pension deficit is that none of this addresses the problem.

    It just gives the county stupidvisors a way of saying, “well, we did do something.” If you kid wrecks the family car and says, “but, I didn’t do it on purpose,” all will be forgiven.

    Problem is these are the elected officials who are suppose to be watching the coffers and they continue to drop the ball. They either obfuscate the issues or blame somebody else, but never themselves or their union supporters.

    It is long past the point where rhetoric will solve the deficit. Time to do the heavy lifting and get it done. Can this lot do it, not up to the challenge.

    Thumb up 37 Thumb down 13

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