The Sonoma County Grand Jury has picked up on the contention of a local pension system critic that the Board of Supervisors did not follow legal requirements when it approved enhanced retirement benefits for county employees a decade ago.
Ken Churchill, a Santa Rosa winemaker and former solar energy firm owner, claims those actions were willful on the part of county leaders at the time and could be grounds for rolling back the higher pension formulas now received by more than 1,000 county retirees — and promised to thousands more current workers.
The grand jury said his claim of procedural mistakes may have some merit, raising the question of whether the more generous pensions were legally approved.
The jury's two-page report, which summarizes its months-long investigation, is titled "Sonoma County Pension Increases in 2002 — Legal or Not?"
The report triggers a formal process that requires a response from the Board of Supervisors. Supervisor Shirlee Zane, the board chairwoman, said a county inquiry and response, due back July 31, was already under way.
But the grand jury's central question — and Churchill's by proxy — may have no ultimate consequence, according to one leading public sector retirement law expert.
Under the two key sections of state law governing how local legislative bodies change benefits for public employees, any procedural missteps by the county would not invalidate its decisions, said Harvey Leiderman, a San Francisco attorney who advises the state's largest public retirement funds.
"There's no punishment in those sections. There may be an argument elsewhere under the law," said Leiderman. He doubted however that any legal trigger would be sufficient to roll back public employee benefits, which enjoy strong legal protection in the state.
Still, the grand jury report advances a case Churchill has made in public forums and newspaper columns since last year, hammering county officials over the benefit changes.
The deals granted a higher percentage of compensation for every year worked and lowered the retirement age, to 50 for public safety workers and 60 for all other workers. Along with pension fund stock market losses, the deals have been a significant factor underlying skyrocketing county pension costs, up 401 percent in the past 12 years, to $87.2 million a year.
Echoing fellow critics, Churchill has hit on the apparent self-interest involved in the deals, which were retroactive for workers at the time and extended to management and the Board of Supervisors. A cost-sharing deal with employees designed to pay for the increases has turned out to be woefully inadequate, critics note.
Churchill, 58, has taken aim specifically at the procedural points leading up to the votes. He claims the Board of Supervisors did not retain its own financial expert to evaluate the impact of the benefit increases. The board also failed to provide sufficient notice or properly agendize those votes, Churchill says.
"It was wrong. They knew exactly what they were doing. They robbed the bank on their way out," he said in an interview Thursday.
The grand jury did not complete its investigation due to time constraints and difficulty tracking down people and documents to verify Churchill's claims. The investigation did include a review of county documents, actuarial reports, newspaper articles and interviews with county and retirement officials.
According to the report, the jury found: