Pensions dominate Healdsburg City Council race

If there's a consensus in the Healdsburg City Council race, it's that more needs to be done to rein in the cost of employee pensions.

The two incumbents seeking re-election, Tom Chambers and Gary Plass, say they've made inroads by instituting less generous retirement packages for new employees and getting current workers to pay more toward their pension programs.

"I do believe we've made some pretty good progress. We haven't gotten to where we need to," said Chambers.

"We've got a great start," said Plass of chipping away at pension obligations and getting employees to pay a share of their medical plans.

But the incumbents bristle at criticism from challengers who say the savings that comes from implementing a second tier of cheaper pensions for future employees will take years to realize, and do little to address the shortfall for when current employees retire.

"I'm not saying it's the end all, be all. It's the beginning. You don't get anything done without starting somewhere," Plass said.

Three seats are on the Nov. 6 election ballot and one of the incumbents, Steve Babb, chose not to run again.

The four non-incumbents in the race — Dennis Brown, Shaun McCaffery, Tim Meinken and Vern Simmons — have all raised the pension issue.

The challengers have ideas that include getting current employees to contribute still more, raising the retirement age, and moving toward 401(k)-style retirement plans rather than defined benefit plans that promise a fixed payment for life.

But the incumbents point out that there are legal limits to what the city can do because of CalPERS, the state employment retirement system to which city employees belong.

Healdsburg, like other cities, is struggling with the weight of pension promises made during more robust times, prior to investment losses during the market downturn. But the City Council also highlighted the problem last year by asking to be part of a Stanford University study by former Assemblyman Joe Nation that looked at the "unfunded liabilities" for pensions in other larger cities.

Nation came up with a headline-grabbing shortfall of $26 million for Healdsburg.

There are other issues on the November ballot, including the council-backed Measure V, which asks voters to approve a half-cent per dollar sales tax increase for 10 years. It would raise the sales tax from the current 8 percent to 8.5 percent to help erase the general fund deficit, projected at $808,000 this fiscal year.

Meinken is the only candidate opposed to the sales tax measure. The winery owner and former partner in a pension and actuarial consulting firm, said the sales tax is too much to add on top of other taxes and could deter retail sales.

He said it shouldn't be used to mask the pension problem, which if not solved, will override the ability for the city to function effectively.

Meinken said almost everyone, including Gov. Jerry Brown, wants to put in a two-tiered pension system in which new hires get less generous benefits. But nationally, Meinken said, it hasn't worked well, in either the private or public sector.

"It creates a two-class system of people. The second class doesn't like it," he said. "New employees aren't happy after a while."

While the vested rights of current employees can't be taken away, Meinken said benefits can be reduced for their future earnings. That includes changing what types of pay are counted toward pensions, he said, such as hazard pay, working a night differential, or extra pay that a police officer gets for taking care of a police dog.

Brown, a chief of medical imaging for the state prisons system, said retirement age should be extended to at least 62, similar to workers in the private sector.

He said people in their 50s should not be able to retire early and collect retirement benefits if they continue working in another job.

"Nobody should be able to get retirement benefits from those plans until they reach retirement age," he said.

"We need to adapt and change with economic times," he added. "Public service is a job like another job you go to. It's not this glorified, elitist group anymore," he said.

Simmons, a retired Navy commander, said "I've been upset with the salaries and pensions of the city employees for some time." City employee retirement benefits, he said, "are well in excess of what is reasonable and what is accepted in industry."

Simmons said the council needs to hold down salaries, perhaps even reduce some of them in future contract agreements, or move to a 401(k) retirement system like most corporations have.

He said the city should consider contracting out services, including the planning department, building inspection and even police.

Having the Sonoma County Sheriff's Office take over the police department as in Windsor and Sonoma should be considered, Simmons said.

McCaffery, a mechanical engineer making his second bid in two years for a council seat, said "the way to solve at least part of this budget problem is to negotiate with employees. If everyone takes a little hit, you don't have to lay anyone off, or hurt critical city services."

He also said the retirement age for city employees should be raised."The rest of the world's folks retire at 65. I know a lot retire in their seventies," he said.

"Retirement at age 50, or 55 is just not right," he said, although he acknowledged it may make sense for some public safety workers to retire earlier than other people.

Incumbents Chambers and Plass said Healdsburg city employees have made sacrifices, agreeing to pay their full employee contribution toward pensions; previously, the city paid the workers's portion.

Police now pay 9 percent of their salary toward pensions. Miscellaneous employees pay 7 percent. And all employees have agreed to pay 10 percent of the cost of their health premiums.

"Our employees stepped up and we did make some gains," said Chambers. "Is that far enough? The answer is no."