Sonoma County supervisors look to create new citizens’ pension reform committee

Sonoma County supervisors are expected to soon form another advisory group of citizens to help examine additional ways to bring down the county’s rising employee pension costs, breathing new life into what has long been a thorny issue for local elected officials, labor leaders and taxpayer advocates.

The county’s main goal is to slash taxpayer pension costs, estimated this year at more than $107 million - up 86 percent from a decade ago, a sharp rise that continues to be fueled by enhanced retirement benefits granted to workers in local and state government in the early 2000s.

State and local reforms rolled out over the past six years have saved taxpayers $178 million, according to the county, and are expected to reduce annual costs over the long term.

But that won’t be enough for the county to hit a key savings target in 2024, when supervisors hoped to have pension costs in check, at or below 10 percent of total annual spending on salary and benefits. Currently, those costs account for nearly 18 percent of payroll spending, diminishing dollars available for public services.

And the county’s latest projections show it will not hit its savings target until 2031, two years after pension costs are expected to peak at $136 million.

In revisiting the issue this week, the Board of Supervisors sounded a message similar to an acknowledgment made late last year by Gov. Jerry Brown - that more needs to be done on the hot-button issue to steward public dollars. Unfunded liabilities for the county’s independent pension system total ?$750 million, including county obligations to the retirement fund and taxpayer debt from past pension bonds.

It’s reason enough to form another advisory committee, supervisors agreed.

“It’s really about oversight and about giving people confidence that we have someone watching what we’re doing and recommending anything that can be done to lower the overall cost - and to really, truly understand the world that we live in, in terms of pensions in California,” said Supervisor David Rabbitt, a longtime board member on the county’s pension system and key player in local efforts to reduce costs.

The Board of Supervisors considered a proposal Tuesday to create a new temporary citizens’ panel, similar to one that made recommendations last year. The panel’s work would include reviewing the county’s pension reform strategies over a 20-month period. The board delayed action after Rabbitt suggested instead making the panel permanent, which he said would provide a more consistent and transparent examination of the county’s reform efforts.

The first citizens’ advisory committee, in its report to supervisors last summer, concluded the county had made insufficient progress on pension reform and recommended officials take more aggressive action moving forward. Many of the most significant steps advocated by the panel - including equal sharing of investment risk now born predominantly by taxpayers and a new tier of less generous retirement benefits - would take buy-in from county employees or changes in state law.

Rabbitt, who at the time voiced some frustration with that final report, and Supervisor Shirlee Zane, who has also been a key player in county reforms, reformed their two-member board committee in November to continue studying the issue.

Following Rabbitt’s suggestion Tuesday, he and Zane will further flesh out what an ongoing citizens’ advisory committee might look like and discuss another proposal with the full board at a later date.

Zane said a permanent panel was “a little bit of a no-brainer” and that members should be selected through an application process rather than being appointed by each of the five supervisors. The panel should include people from diverse backgrounds and representation for organized labor - but likely not from any county union, Zane said.

Jack Atkin, a member of the previous citizens’ panel, said he favored the creation of a permanent committee because pension reform would remain a challenge for the county for many years. Formation of a standing citizens’ committee was a recommendation from the earlier panel anyway, he said.

Atkin, a former president of the Sonoma County Taxpayers Association, also supported retaining as many members as possible from the original seven-member group.?“The more holdovers from the first committee, the more efficient and productive a new committee will be because of the steepness of the learning curve. It’s hard to overemphasize that point,” Atkin said. “It’s a very complicated topic.”

Lisa Maldonado, area director for Service Employees International Union Local 1021, the largest union representing county employees, disputed the need for an advisory pension panel, particularly if it had no county union members. Prior progress on pension reform was achieved through negotiations between government officials and unions - not recommendations from outside citizen advisors, she said.

“It was done through collective bargaining with employees, either at the bargaining table or statewide,” Maldonado said. “That’s the best way to make change. The rest of it is just window dressing.”

Maldonado also doubted whether a citizens’ panel could be truly independent, accusing the last one of being driven by union and tax critics. In talking again about a citizens’ panel, supervisors appeared to be “playing politics with people’s pensions,” Maldonado said.

Four of the five supervisors gave preliminary support to the advisory panel proposal on Tuesday. Supervisor Susan Gorin held some reservations and expressed uncertainty about the proposal, calling it “clear as mud.”

“I have yet to determine whether a standing committee would be an asset to the county or whether an ad hoc committee with a limited scope would be best to serve the county’s goals over the next year or two,” Gorin said in an interview. “I’m looking for a better proposal with more clarity going forward.”

With assets now valued at $2.5 billion, the county’s pension system supports nearly 4,700 retired employees and beneficiaries and more than ?4,000 active members. Most of the active members will receive the more generous benefit benefits secured by employees before the 2012 passage of state legislation instituting major reforms for public pension systems in California.

That legislation required lower benefit tiers for new employees, among other changes, in an effort to help alleviate pension crises faced by governments throughout the state. Like many of its counterparts, Sonoma County enhanced benefits for its employees in the early 2000s, only to see the retirement system face steep financial challenges in the fallout from investment losses during the recession.

Creating a permanent citizens’ advisory panel should help publicly demonstrate the board’s commitment to lowering pension costs long term, Rabbitt said.

“It’s like turning a big ship around, though. It is a slow process, and you just keep chipping away at it, and you keep maneuvering it,” he said. “It does turn around. We’ve discovered that, and we’re going to continue to go in that vein.”

You can reach Staff Writer J.D. Morris at 707-521-5337 or jd.morris@pressdemocrat.com. On Twitter ?@thejdmorris.