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Sonoma County Board of Supervisors approves two deals to lower county payroll expenses

By BRETT WILKISON
THE PRESS DEMOCRAT

The Sonoma County Board of Supervisors on Tuesday took its first independent action to rein in pension costs, unanimously approving a pair of deals that lower payroll expenses for more than 60 percent of the county workforce.

Sonoma County sealThe deals include a 32-month contract with the county’s largest labor union and a compensation package for its highest paid employees, including elected officials, department heads and managers.

Service Employees International Union Local 1021, which represents about half of the county’s 3,500 employees, ratified the contract in a tight vote last month.

The two deals alone could achieve more than three-quarters of the $150 million pension savings the county says it needs over the next decade to make its retirement system sustainable.

Supervisors said Tuesday’s action made good on their pledge to seek a balanced solution to one of the county’s main fiscal woes. The next step is talks under way with the remainder of the workforce, including sheriff’s deputies and other public safety workers.

“The bright light of the future has to be the county being in a fiscally sound place so that we can all benefit,” said Board of Supervisors Chairman David Rabbitt, referring to taxpayers and employees. “The two have to coincide.”

Union sentiment Tuesday was mixed. Some members backed the deal while others criticized its concessions and took aim at compensation terms for top officials.

The SEIU contract balances a continued short-term salary freeze with 3 percent in future-year wage gains. It offsets some of the pension cuts with additional help on health care expenses.

The average annual cut to total compensation over the period is 2.25 percent, below the county’s initial target of 3 percent.

By comparison, the Board of Supervisors is set to take an overall cut of 8.5 percent. The reductions for department heads and managers, even after a parallel salary bump of 3 percent, are at 6.8 percent and 5.1 percent, respectively. The county supervisors, whose salary is not tied to the package, will not receive a pay increase.

“It’s hard to criticize what we came out with in the end,” said Tim Tuscany, a psychiatric nurse and bargaining team member for SEIU. The union represents many of the lowest paid employees in county government, including rank-and-file workers in most county departments except for public safety divisions. The 1,700 workers account for about $200 million of the county’s $490 million total payroll.

On the other side, the 600 top officials and unrepresented employees covered under the “salary resolution” approved Tuesday account for $112 million of the payroll.

Combined, the deals for the two groups will save about $19.7 million through late 2015.

The compensation overhaul is aimed to permanently reduce labor costs after years of declining or flat tax revenue, lower long-term pension liabilities — now at $353 million — and free up funds for a range of government services.

The changes were set in motion nearly 16 months ago and faced a number of possible obstacles. But state action last year on overhauling pensions helped the county clear one hurdle, setting lower benefit tiers for new employees.

And in their vote last month, 52 percent of SEIU-represented workers agreed to the county’s more extensive pension changes, including a greater share of their paychecks going to cover pension premiums.

Several supervisors hailed the agreement as a significant achievement.

“This is a bold first step to reset the county’s compensation costs for the long term,” said Supervisor Mike McGuire.

The actions would scale back pension-eligible pay to include salary, a smaller number of job premiums and some cash and job-related allowances. It would eliminate from retirement calculations various cashouts of accrued leave, end-of-career bonuses for department heads and other pension-spiking opportunities.

A Press Democrat analysis last year showed the extra compensation adds an average of more than 12 percent to pensions for county employees, or more than 14 percent for sheriff’s deputies and other public safety workers.

Those perks, plus stock market losses and richer benefit formulas approved in 2002 have driven up taxpayer costs for the county retirement system by more than 400 percent since 2000. Including payment on pension debt, annual taxpayer costs are now about $97 million, or about 20 percent of total county payroll. They were set to climb to 30 percent without any changes.

The county’s long term goal is to bring them back down to 10 percent.

Fiscal watchdogs have called for deeper and quicker moves, including unilateral changes to benefits for current workers that would likely run afoul of legal rulings. They were not among the eight speakers — all union members or county retirees — who addressed the board Tuesday.

Several SEIU members said the shift in take-home pay to pensions was a bitter pill to swallow, especially in the face of rising medical insurance costs, up more than 23 percent since 2011 for the Kaiser plan used by three quarters of county government workers.

“If I had kids on my plan, I couldn’t afford to be a county employee,” said Martha Stiles, an account clerk in the county’s Health Services Department who made about $60,000 last year. Some lower paid workers with families have switched to state-sponsored coverage for their children, she said.

Under the SEIU contract, the county would increase its health care contributions, making monthly payments starting at $100 to health reimbursement accounts for dependent coverage.

The measure signals a reversal of sorts of a controversial 2008 medical benefits rollback. It is being challenged in federal court by county retirees, who had benefits reduced to $500 a month.

Supervisor Shirlee Zane voiced frustration with the move’s impact on employees.

“The hard part of being on the board is you inherit previous board actions,” she said.

Some SEIU members continued their protest of a perk temporarily restored last week for top officials.

A board contingent led by McGuire and joined by Zane and Supervisor Susan Gorin — all of whom were backed by SEIU for office — bowed to their calls and pushed the board to revisit the decision on deferred compensation accounts.

The perk, mostly an executive-level benefit and long a target of union campaigns, is set to end for all other workers this year but was partially extended for a year for top officials because of a legal conflict with granting those employees an offset through health reimbursement accounts.

County staff cast doubt on whether there is a suitable, non-pensionable alternative.

Lou Maricle, vice-chairman of the group representing the county’s 440 administrative managers, said his unit expected the pushback from SEIU but didn’t want a fight.

Supervisor Efren Carrillo lamented that the benefit became a wedge issue for rank-and-file workers.

“It’s almost like nobody is happy until everyone is unhappy,” he said. “That really is a terrible place to be in.”

Gorin, the board’s rookie, but one seasoned by tough labor talks with public safety unions as a Santa Rosa city councilwoman, said the county’s most difficult negotiations could lie ahead.

“As complicated as it is, this may be the easiest part of the discussion,” she said. “We’ve only achieved 77 percent of the savings. We still have work to do.”

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





22 Responses to “Sonoma County Board of Supervisors approves two deals to lower county payroll expenses”

  1. Monty555 says:

    Accountable, do you know the name of that ordinance that sets supervisor’s salaries? Or do you have a link to it? Thanks a lot!

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  2. Dan Drummond Sr says:

    @MOCKINGBIRD – You are right about management being the problem. They have the most to lose if they had to be fiscally responsible for the risks of their own retirement funds, instead of getting a “guaranteed” pension from the taxpayers. To guarantee an employee 60-90% of their salary in retirement is very risky for taxpayers.
    To continue to pay a yearly pension of $509,664.60 to Bruce Malkenhorst of Vernon, CA in insane (http://database.californiapensionreform.com/). This is why corporations no longer offer guaranteed pensions to new employees.

    If the Republicans were really serious about fiscally responsibility and worked to make all future government pensions a 401K program, I would definitely consider becoming a Republican!

    P.S. Thanks for leading me to learn about Martha Matilda Harper. What she was able to do in her time was remarkable. She’s my pick for Women’s History Month.

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  3. MOCKINGBIRD says:

    Anyone notice in the PD that little tiny blip about the County’s CAO’s salary and benefits? Any of you out there angry about it? You should be. And she’s not the only one getting high salaries and benefits and 4-5 months of leave time. It’s not the unions robbing you or any of the rank and file who work FOR YOU and know it, it’s the management.

    Ask the BOS how many NEW MANAGEMENT POSITIONS have been added to the county employment rolls since 2008. Then ask them how many rank and file lost their jobs. Just say ‘THE PUBLIC HAS A RIGHT TO KNOW’. That article on our CAO should have been on the front page of the PD.

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  4. County Worker says:

    Since the County spent 19 YEARS, not contributing up until 2008, there was a huge gap in capital to grow and absord lossed. The unions warned them every year they needed to pay their share of the accounts or they were more vulnerable. Nope, almost 20 years of putting the pension contributions elsewhere. Had those funds but put where they were supposed to go, the fund would have been close to double it size when the crash hit.

    THAT is the cause of the pension crisis. And yes, the taxpayers are on the hook. The unions warned about it for 20 years. Even the PD wasnt interested in the story until after the crash. They saw the warnings from the unions as just employee grumblings and never wrote the story put to them. They also refused to print letters critizing the practice.

    But dont believe me, I am just an overpaid public employee, and you know we all get $100K and free medical for life, in your dreams.

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  5. Dan Drummond Sr says:

    @MOCKINGBIRD – I don’t think pensions are bad. Everyone that works should grow a pension, because Social Security is a safety net and not designed to supply you with the income you currently earn.

    What do you think your government does with the retirement funds it holds onto until an employee is ready and able to retire? They don’t put it in a bank to make 0.01% interest! That would not be sustainable. They need to grow the funds in order to be able to give an employee what they “promised.” So they invest the retirement funds in the stock market, or some other equally risky endeavor, in order to grow the funds. The government takes the complete risk to grow the funds. That can and has worked in the past when the risks proved good. But when risks prove bad, the government is on the hook for coming up with what they “promised.” That means “We the People”, the taxpayers are on the hook for the missing funds. That’s me, you and everyone else!

    Most non-government employers that offer a retirement program do not take the complete risk for growing their employee’s retirement funds. They match a percentage of what the employee wants to contribute to their own retirement program, and then they expect the employee to manage their own account under the program, e.g. 401K. Many employees now have the freedom to choose a program based on how much risk they are comfortable with.
    What really irks non-government employees and retirees is when our taxes go up to cover the risks that proved bad for government employees. No one covers our risk if it proves bad, so why should we cover government employee’s risks? I say let them be fiscally responsible for their own risks!

    P.S. Are you sure you didn’t use a different email address when submitting the posting with the non-pink snowflake? I believe a computer program controls which snowflake is used. I think they’re tied to the email address used to submit.

    Thumb up 4 Thumb down 6

  6. bear says:

    @Dan Drummond

    The day the County increases rank-and-file salaries by 25%.

    Thumb up 3 Thumb down 5

  7. MOCKINGBIRD says:

    Dan Drummond, didn’t notice that I now have a blue icon too. Both are my notices so PD made a mistake somehow. I like my pink one as my “identity”.

    Thumb up 1 Thumb down 4

  8. MOCKINGBIRD says:

    Steveguy-you are right. Whenever the county gets a grant or new money the VERY FIRST THING is that the hire a high paid manager to manage that money. Sometimes several managers. Always new positions when there are plenty of managers already who could absorb those duties with good rank and file employees to do most of the actual work.

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  9. MOCKINGBIRD says:

    Dan Drummond-not two different people. Also, why should you have a 401K to be eaten away by fees and lose all during hard financial times? Why shouldn’t we all have pensions?

    Having pensions is not bad. They just need to be funded properly. Businesses and government who fail to do this after collecting huge sums from employees then take their money and run with it should be prosecuted. This is what BAIN Capitol did. Took workers pensions and 401Ks.

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  10. MOCKINGBIRD says:

    Accountable-YES. SEIU, other unions like ESC and the trades unions. Other organizations like the Living Wage and Conservation groups. Gammaliel and all the groups affiliated with them including many SO CO churches.

    Absolutely!!!!!

    Thumb up 10 Thumb down 6

  11. Dan Drummond Sr says:

    When are public employees going to be switched to a 401K program like the private sector? We must be coming to the end of the road soon.

    @Accountable – your question to mockingbird may need to be directed to the bright pink snowflake or the violet snowflake, for there are two different mockingbird postings which could be two different people.

    Thumb up 11 Thumb down 6

  12. Steveguy says:

    There is so much that is just plain wrong here.

    The front desk and rank and file workers are getting blamed for the Board of Stupidvisors feathering the nest of high dollar thieves.

    In turn, it lowers their moral (understandably) so the public gets lower or less than helpful services which we PAY for.

    Much has been typed about– Let me give a real example—

    Ya know that Rob Reiner cigarette tax that we voted yes for ? That money is supposedly for low-income childcare and preschool kinda stuff. In reality the ” Administrators ” get huge salaries and benefits to the detriment of what the tax was for. Yes they do give services, but it is a money pit for them that they have abused since the inception.

    Can the PD look into that ? oh my

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  13. Snarky says:

    Accountable:

    If you seek help with your effort, why the anonymous name online?

    Are you asking me to perform an online search for “Accountable in Sonoma County, CA” ??????

    I have to assume your post is fluff and not sincere.

    LOL

    Thumb up 1 Thumb down 11

  14. Dan Drummond Sr says:

    @Accountable – Remember Dan Drummond left this political forum on December 15, 2012 at 3:50 pm, http://www.watchsonomacounty.com/2012/12/county/guest-opinion-the-train-wreck-ahead-for-sonoma-county/#comment-820447.

    I guess he didn’t understand that his friends could tell us apart by our ID snowflakes. His is kinda beige and mine is bright green. I haven’t seen his snowflake since, but he could be here under a different email address, name, and snowflake. He could even be you for all we know.
    You may need to call his office.

    I never considered a difference of opinion in politics, in religion, in philosophy, as cause for withdrawing from a friend. ~Thomas Jefferson

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  15. Accountable says:

    @mockingbird – based on what I found, we would need to gather approximately 17,733 signatures to get a referendum on the ballot. Do you think you could rally SEIU members to help with vote gathering?

    @Steve H – thanks for offering to help. We can do this if enough people are willing to participate, and we need more than just SEIU members.

    @snarky – I’ve spent hours researching how to rein in the Supervisors’ Compensation. What can you do to help make a change?

    Dan Drummond is the Executive Director for the Sonoma County Taxpayers Association and has also written editorials about the pension issues in the county. He is also a business attorney. Dan, would you draw up this referendum? In my reading, voters actually have 60 days to file this, but I’m no attorney.

    New Sonoma directors and Ken Churchill…where are you in this?

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  16. MOCKINGBIRD says:

    So how about a referendum put on the ballot to model Oregon’s or Texas’s law requiring a ratio of management to rank and file of 1:11? Anyone out there willing to sign the petition? I know every single union member in the county will sign it, government worker or not. How many union members out there? I suspect the public will line up in droves to sign it considering how they are concerned about the pensions (managers have TWO pensions paid by the county-their deferred comp (which they now have to give up) and the county pension. Rank and file just have the one pension.

    The county needs more rank and file workers to handle the workload but the county keeps adding more brand new management position. The BOS at Tuesday’s meeting expressed concern about the county’s roads then went about talking about “parity” for the management. Too much contracting out of “good county jobs” as Zane once told me she was against (when I helped with her first campaign). Now she’s the queen bee of contracting out “good county jobs” or for the layman that means rank and file jobs or the meeters and the greaters who provide the actual services needed by the public.

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  17. Brett Wilkison says:

    Staff Writer for The Press Democrat

    The county-paid deferred compensation benefit, while once determined pensionable by the county’s retirement system, no longer is. The change happened last year in the aftermath of state pension reform. The county pension board ruled in November that the benefit no longer applies to pension calculations.

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  18. Steve Humphrey says:

    @ACCOUNTABLE

    Sounds good to me. I’m in to help out, gathering signatures or whatever is needed, in my neighborhood.

    Thumb up 22 Thumb down 3

  19. MOCKINGBIRD says:

    Thanks, Accountable, you made my case better than I could. Our BOS previously set their salaries to the judges’ income which is set by the state. That’s why our county’s BOS are so highly paid. Also, they would use different counties in the past to set managements salaries than the counties they used for the rank and file. Supposedly they’ve changed that.

    Not only is the BOS taking themselves and the management out of that August 2012 Letter of Intent to SIEU specifying what they and the management were willing to sacrifice if SEIU and the other unions bargained faithfully, they plan to give RAISES to the management beginning immediately. It’s all available for the public to see online. SEIU bargained IN GOOD FAITH directly according their agreement in this letter of intent and now the BOS are changing that agreement ONE WEEK AFTER SEIU voted for the contract. This is how much the public and rank and file employees can trust this current BOS.

    In 2008 when SEIU and other union employees walked off the job to protect their health insurance, SEIU and the unions were also demanding that the management and BOS give up their county paid deferred compensation WHICH WAS/IS PENSIONABLE (TWO retirement accounts the county was paying into for themselves and the managers) to save rank and file jobs and to cut the ranks of management. The BOS is including the loss of the deferred compensation accounts in the “sacrifice” percent they calculate for themselves and management for the next 3 years. 5 years later times $4M in PENSIONABLE DEFERRED COMPENSATION PER YEAR EQUALS $20M dollars added to the county’s and the taxpayers’ pension liability. IMAGINE HOW MANY ROADS THAT WOULD HAVE FIXED!!!!! The managers also got a 3% COLA that year which the rank and file DID NOT GET and will be keeping it. The rank and file got a 2.25% pension pickup by the county that they now want to take back which will mean IMMEDIATE decreases in the rank and file paychecks. Right now some of them are paying $700 to $900 out of their paychecks for health insurance but many have dropped their families off because they can’t afford it and many are on PUBLIC AID. County workers help Sonoma County families obtain health insurance AND THEY CAN’T EVEN AFFORD IT FOR THEIR OWN FAMILIES.

    Apparently, the managers and BOS are going to have a decrease in their PENSIONABLE deferred compensation to 2.25% (when they agreed in the letter of intent to give it ALL up) and will be getting an immediate 3% COLA (for “parity” with the rank and file they say)-that will equal 6% COLA the rank and file did not get. The rank and file won’t be getting their 3% until near the end of the 3 year contract. The taxpayers should also check to see if they are giving up the management’s car allowances which is pensionable (they could drive a county car which is not pensionable-they sit in the county lot UNUSED).

    As a taxpayer I am appalled at the actions of this BOS. They agree that this county has too many managers but still continue to approve BRAND NEW MANAGERMENT POSITIONS, yet there isn’t enough road crew to handle the demand since they’ve been halved since 2008 due to layoffs. If the public wants ROADS REPAIRED then management positions need to be culled. It makes no sense to keep and add management positions at the expense to the tax payers and the rank and file that actually work with the public.

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  20. Snarky says:

    Accountable:

    You know the procedure.

    Why are YOU not acting on it?

    By the way, notice how government always places a time limitation on any acts by the citizenry that would nullify what government has already done?

    And the time limitations are always very short… again… because they are written by the government to protect the government.

    The idea that the public controls the government is a myth.

    Thumb up 20 Thumb down 5

  21. Elephant says:

    The BoS salary and pension packages need to be cut in half. They’d still be making more than a vast majority of Sonoma County residents.

    Thumb up 28 Thumb down 1

  22. Accountable says:

    The voters of Sonoma County can challenge and vote on the salary ordinance of an elected official. Here is a guide to placing a county referendum on the ballot http://www.votescount.com/books/referendum.pdf. The petition must be filed 30 days after the ordinance is adopted, so we are on a timeline. The required signatures are 10% of the entire vote cast for Governor in the last election.

    In other counties, Union officials and County Taxpayer Associations have filed referendums against B.O.S. salaries. It is recommended that an attorney review the petition, which both SEIU and the Sonoma County Taxpayer Association has access to.

    We can either complain on this website about the B.O.S. compensation packages, or we can vote on them and rein them in.

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