Under California law, when county supervisors decide to increase retirement benefits for employees they need to:
; "Obtain actuarial evaluations of future annual costs before authorizing increases."
; "Make the information public at a public meeting at least two weeks prior to the adoption of such increases."
At the urging of the Sonoma County grand jury, Sonoma County took a look at how this process was handled back in 2003 when the Board of Supervisors substantially increased retirement benefits. This is important because this era of enhanced benefits is a major reason that the county finds itself in such a financial fix, facing long-term liabilities that — including pension bonds and unfunded pension obligations — could exceed $1 billion.
Here's what the county's analysis found: Officials got an actuarial report that noted how much the new benefits were going to cost the county in the long run. The problem is they never released it to the public — at least not at a regular Board of Supervisors meeting or some other hearing where the public would expect to get such information.
Nevertheless, the supervisors voted unanimously on Tuesday to accept the county counsel's analysis as well as its contention that the county "substantially complied" with state law.
Why? Because, staff argues, information contained in the report was referenced in public discussions about new collective bargaining agreements, pension obligation bonds and other matters. Also, the county contends, the actuarial report <i>was </i>discussed at two public meetings — before the governing board of the Sonoma County Employee Retirement Board.
The fact is most members of the general public don't know what the Sonoma County Employee Retirement Board does, let alone where and when its governing board meets. (At the time, it was meeting in the conference room in the public works department.)
The county may see this as "substantial" compliance, but we don't. And our guess is that most people, if they look at the details of this report, won't either. On the contrary, the analysis of the county's actions in 2003 showed a general disregard if not a contempt for the importance of including the tax-paying public in a discussion as important as significantly boosting retirement benefits <i>retroactively </i>for public employees.
As a result of this vote in 2003 — as well as the investment losses in the 2008 meltdown — county pension costs, as a percentage of payroll, have grown five-fold over the past 10 years. This means less money is available for county services.
Either way, county counsel has argued that not much can be done about it now. Since July 1, 2004, more than 2,000 county employees have retired and are relying on enhanced retirement benefits.
The county can't roll back the clock to 2002 any more than it can take back benefits that were, in good faith, promised to and earned by county employees. But the county's missteps raise questions as to whether a legal challenge focusing on the vested right of employees to continue accruing enhanced benefits — benefits the county can't afford anymore — would be possible.
We don't know. All that's clear is that 10 years ago when the county — along with many government agencies across the state — ushered in the era of enhanced benefits, few were looking out for the interests of the general public. This report, sadly, confirms that.