The County of Sonoma has money problems, as do many other cities and counties. Lower tax revenue is a problem, especially when mandatory expenses skyrocket. Here’s one key statistic: Sonoma County’s pension contributions, payments on pension obligation bonds and payments toward retiree health coverage rose from $21,404,307 in fiscal year 1999-2000 to an estimated $92,010,270 in fiscal year 2010-2011. That’s an increase of 330 percent in 11 years. Are there more county employees now? No, that number has declined by about 5 percent in the same period of time. Are there 330 percent more retirees? No, the number of retirees increased by about 66 percent.
But the pension costs for retirees have skyrocketed, as have the pensions themselves. The Sonoma County Employees’ Retirement Association (SCERA) refuses to disclose retiree names and exact pension amounts, citing confidentiality. A lawsuit filed by The Press Democrat seeks complete disclosure, and a judge has already ruled against the county and in favor of full disclosure. Several other judges around the state have made similar rulings requiring disclosure, but Sonoma County is appealing the local decision.
In a Marin County pension database posted August 21, 2009 by the Marin Independent Journal, there were 154 names of people drawing annual retirement pensions of $100,000 to $250,000 from Marin County public agencies. Statewide, the public employee pension system CalPERS reports that the number of retirees receiving $100,000 or more has quadrupled since 2005.
Officials with the County of Sonoma may be concerned about public reaction when the exact pension amounts are disclosed. Why? Because the public will see many annual pensions topping $100,000, $150,000 and even $200,000.
Government employees are quick to respond that the average pension amount is much lower than $100,000. For instance, the average pension for recently retired city of Santa Rosa “miscellaneous” (non-public safety) workers is $29,837. But it takes just five years of employment with Santa Rosa to qualify for a lifetime pension. Thus, the average pension number includes a lot of ex-employees who worked relatively few years and, therefore, have relatively small pensions.
And there’s another problem with reporting average pension amounts for a single city, as pointed out by John E. Bartel, an actuarial consultant for the city of Santa Rosa. Many employees have worked with and are eligible for pensions payable by multiple government entities. Bartel estimates the true total pension might be on average 2.5 times the amount reported for the city of Santa Rosa.
The average annual pension paid to recently retired Santa Rosa police officers, just based on their service with Santa Rosa, was almost $56,000 in 2009. For recently retired firefighters, it’s more than $67,000. Service with other police and fire departments will result in higher—perhaps much higher—total pensions.
A tree grows in Santa Rosa
Here’s one example of a public service that quietly disappeared in the last decade, as public employee pension costs spiraled upward. The city of Santa Rosa had a “Sidewalk Tree Program,” which addressed the problem of sidewalks damaged by curbside trees planted by the city. If you (as a homeowner) repaired the damaged sidewalk, the city would split the cost with you.
I had 200 linear feet of sidewalk damaged by curbside trees. I talked to the Santa Rosa Public Works Department about the shared-cost repair program. I was given a list of approved contractors, contacted one of them, obtained a bid for sidewalk replacement, submitted everything to the city and learned how much the city would pay toward the project—about $4,000.
Shortly thereafter, I proceeded with the project by getting a permit at the same Public Works Department desk that told me how much the city would pay.
Here’s the key question: At what point in the project did I learn the city had canceled the shared-cost program? For dramatic effect, you need to picture me standing in the street, with my contractor and a city of Santa Rosa engineer, next to the 200 feet of sidewalk that had just been ripped out. We were discussing possible replacement of a small section of curb and gutter that also was damaged.
I said, “Why not fix it? The city will share the cost.”
City engineer: “No, that’s not true. The shared cost program ended.”
Other service reductions?
We’ve read about furlough days, reduced hours of operation and government closure days. More specifically, the county of Sonoma listed $27 million worth of service reductions in its 2010-11 fiscal year budget, including delays in customer service for a number of county offices, extended completion time for trials, fewer criminal cases prosecuted, reductions in law enforcement, increased response time for police services, decreases in case management for high-risk youth, reduced adult mental health services, elimination of adult substance abuse prevention services, reduced road maintenance, reduced agricultural pest inspections and reduced emergency response planning. Now the county is proposing many more reductions for the 2011-12 fiscal year.
This is the tip of an iceberg of reduced government services caused in large part by higher pay and benefits for government workers, while the pay and benefits for private sector employees have stagnated. What have Sonoma County supervisors done to control runaway pay and benefits in the last 10 years? They’ve raised their own pay-and-benefits package from about $95,000 apiece 10 years ago to about $250,000 apiece now. Ouch.
A native of Santa Rosa, Bob Andrews is a former pension trust officer at Exchange Bank and was a long-time co-owner of a retirement plan administration firm. He’s married with two chrildren, three grandchildren and loves everything to do with wine. Contact him with your "Open Trench" experience at bandrews@northbaybiz.com.
