Sonoma County supervisors voted unanimously Tuesday to create a trust fund for retiree health benefits and to seed it with $7 million, a first step toward dealing with expensive promises of paying county employees post-employment benefits.
Supervisors set aside the thorny issue of whether they should cut government services or slash retiree health benefits in order to come up with an additional $15 million needed to pay for those benefits over time.
"I've heard it said the board is trying to take away medical benefits for retirees and that is absolutely untrue," said board chairman Mike Kerns. "But we can no longer keep our heads in the sand and pretend this problem does not exist."
The problem is that guidelines set by the Governmental Accounting Standards Board require public agencies to detail for taxpayers their future obligations to retirees. This accounting shows that over the next 30 years, the county is committed to paying about $398 million, and only about half the amount needed is being set aside.
Representatives of several retiree and union groups said Tuesday that county administrators are wielding the unfunded liability issue as a public club to force concessions in closed-door negotiations on labor contracts that expire June 30.
"I think this is a worst case scenario," said Dick Gearhart, the county personnel director from 1986 to 2000 who heads a group of retired administrators opposed to benefit changes. "These options are far too limiting."
Gearhart was referring to two options for county service and program cuts totalling $15 million that county administrators unveiled Tuesday as ways of filling in the deficit in the health benefits trust fund.
One option calls for $8 million worth of across-the-board, 5 percent cuts that would land hardest on the Sheriff's Department, jail operations, home health services and the Valley of the Moon Children's Home. A second option would make more selective cuts, but would virtually eliminate funding for the planning department's code enforcement, the economic development department, the University of California extension and the county tourism program.
Both options also would take nearly $6.9 million out of a host of other programs not funded by the county general fund, including $2 million from human services and $1.9 million from health services.
Supervisor Mike Reilly said cutting county services by $15 million would mean many programs would be "operating so close to the line that they would have to close and not be able to operate."