DEAR Larry MAGIC Mendoza and WHISTLEBLOWERS:
Happy Valentine's Day!
UPRISING ALERT: We need MANY PROTESTERS...MAGIC's blog www.santabarbaracourtcorruption.blogspot.com HAS HIT A NERVE !
PLEASE, TUESDAY, COME TO THE BOS CHAMBERS FOR PUBLIC COMMENTS (REMOTE TESTIMONY) THIS TUESDAY. We need to make our grievances public in order to expose deep-seated and wide-spread school and government corruption and TO EDUCATE THE PUBLIC ABOUT LEGAL ABUSE SYNDROME.
PLEASE, ATTEND MY "FRAUD ON THE COURT" TRIAL ON WEDNESDAY, FEBRUARY 16, DEPARTMENT 1 (SECOND FLOOR). I'm not sure of the time!
"The public (EXCLUDING KATE SMITH, of course) can address the board in person or by using the remote audio and video equipment at the hearing room on the fourth floor of the county administration building at 105 E. Anapamu St. in Santa Barbara.
For those who cannot make it to either location, there is a live stream of the meetings and copies of agendas and minutes of the meetings at www.county ofsb.org"
(Kate Smith: "I'll be there with bells on!")
ON EDHAT.COM FROM THE LOMPOC RECORD:
http://www.lompocrecord.com/news/local/govt-and-politics/article_a235483e-3733-11e0-82b0-001cc4c002e0.html
A report that outlines ways to reduce Santa Barbara County’s annual retirement expense — a ballooning figure that in the coming fiscal year will see a $21 million increase — will get its first public scrutiny Tuesday by the Board of Supervisors.
The report, compiled by a five-member advisory commission appointed by supervisors in March last year and chaired by former County Treasurer-Tax Collector Gary Feramisco, suggests six changes to the existing benefit plan that over the long term would significantly reduce pension costs.
In the 2009-10 fiscal year, the county paid approximately $70.8 million into the retirement system, but the contribution amount jumped to an estimated $90.8 million in the current fiscal year.
The $20 million hike made up about half of the nearly $40 million deficit the county faced in the 2010-11 budget, and according to the report, the county will be on the hook for $105 million in fiscal year 2011-12 — $40 million for 942 safety employees and $65 million for 3,074 general employees.
The county is projecting a $60 million to $90 million budget shortfall for the fiscal year, which starts July 1.
“The hit that we took this year for our employer contributions was devastating,” said Jeri Muth, the county’s interim human resources director. “Unless we negotiate for some significant changes, that is not a sustainable amount for the county of Santa Barbara to pay for pension benefits.”
The recommended changes to the benefit plan outlined in the 36-page report include:
•A reduction in the formulas used to calculate the pension benefit;
•Eliminating the use of one year of final average salary to calculate the pension benefit;
•Eliminating any/all employer contributions to the employee’s contribution toward the pension benefit;
•Eliminating vacation conversions, through which annually employees can request to convert vacation hours to cash, which increases the final average salary on which the pension benefit will be calculated;
•Eliminating all performance-based lump sum payments, which increase final average salary;
•Implementing a 2-percent post-employment cost of living adjustment, instead of the current 3-percent COLA.
Muth noted that the changes fall under “labor relations” and are subject to collective bargaining with the handful of unions that represent the county’s employees.
Any staff recommendations to supervisors about the report “would typically happen in closed session,” she said.
“The board needs to receive this (report) first, and then we’d give our recommendations,” said Muth. “The board may like all of this, but the only way to get it accomplished is through collective bargaining, so we’d go into closed session to set the parameters for those negotiations.”
County Chief Executive Officer Chandra Wallar has said three things are to blame for the growing pension liability: the stock market crash in 2007-08; a longer life expectancy for employees; and the most critical — a reduction in the county’s interest earnings goal, which was enacted by the county’s Board of Retirement.
This year, the interest earnings goal was 7.75 percent, down from 8.16 percent in better years, and in the next two years it will be 7.5 percent.
“That means you have to increase your contribution rates to make up for the fact you won’t be getting as much in true earnings from the stock market,” Wallar said. “It’s certainly an eye opener that we have to address.”
Vince Brown, chief executive officer for the county’s retirement system, which is governed by the Board of Retirement and is responsible for protecting the county’s retirement assets through investment and oversight, said the decision to reduce the county’s interest earning goal came after extensive study.
“The Board of Retirement was very cognizant that this would have an impact on the county’s budget system,” he said. “The valuation for 2010 was taken into consideration before the board set the valuation. At the end of the day, it’s the responsibility of the employer (the county) to make sure those payments are made to the system and we have significant funds to invest.
“Part of our job going forward,” he continued, “is to maximize our investment return because that will reduce the cost to the employers. That’s the role the board plays in trying to mitigate the costs to the county.”
But Brown and others responsible for managing the county pension system agree that even if supervisors act now and can negotiate significant change in county pension contributions, it would likely be years before it will really start to make a difference.
He said the trick is balancing economic predictions, retirement numbers, the long-term rate of return on the county’s investment and other variables such as whether the county cuts its number of employees.
“Most actuaries will tell you that over the next 10 to 20 years the markets aren’t going to return to what they have been over the previous 20 years, so we have to better align what our anticipated returns are with where the market is going to ensure we have adequate funding to pay the benefits,” he said. “That has an impact on the employer, in this case the county.”
Feramisco, the advisory commission chair, said that alternative No. 1 in the report — that recommends new benefit tiers for future general employees — would provide the greatest cost savings. But he noted that with 140 to 150 employees retiring during a year, it could take 10 to 20 years for significant savings to kick in.
“Initially, this alternative probably wouldn’t erase the $21 million, but eventually it would,” he said. “There has to be a transition between existing employees and the future workforce. Realistically, this year the county is going to have to deal with this number.”
In the report, the commission’s findings are more specific.
They show that first-year savings for the county would be about $1.5 million using a tier for new general employees of 1.62 percent at age 65 with a 2-percent cost of living adjustment, and for new safety employees a 2 percent at age 50 with a 2-percent cost of living adjustment.
It isn’t until 2023, in about 13 years, however, before the county’s contribution rates return to approximately the 2010 level.
Whether or not the changes needed to bring retirement costs in line with county’s cash flow affects its ability to attract top-notch employees remains to be seen.
Feramisco noted that Santa Barbara is not the only county examining its salary and benefits costs, but said, “You have to look at the taxpayers. They’re the ones paying the bill.”
“You have a level of services that has to be provided and you have to get quality employees to provide those services,” he said. “That overall expense has to be sustainable. In our judgment (any of the suggested benefit changes) should be reasonably competitive. But you don’t know that.”
The county is seeing more and more jurisdictions creating a new tier for retirement formulas, Muth said, adding that she thinks the commission’s recommendations are “sound.”
“If we offered richer benefits, that would put us at the top of the market,” she said, “and that’s not necessarily where we want to be.”
The Board of Supervisors meets Tuesday at 9 a.m. in the Betteravia Government Center at 511 E. Lakeside Parkway in Santa Maria.
A copy of the advisory commission’s report on Retirement Program Alternatives is available at www.countyofsb.org with Tuesday’s agenda item.
The public can address the board in person or by using the remote audio and video equipment at the hearing room on the fourth floor of the county administration building at 105 E. Anapamu St. in Santa Barbara.
For those who cannot make it to either location, there is a live stream of the meetings and copies of agendas and minutes of the meetings at www.county ofsb.org
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