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Ventura County considers letting public decide on pension increases

'It's an opportunity for more accountability to the people who pay the bills,' a supervisor says. As the cost of public workers' retirement benefits soars, some governments are giving voters a say.

June 24, 2009|Catherine Saillant

Alarmed by spiraling pension debt, Ventura County could join a growing number of local governments requiring that future increases in retirement benefits for public employees be put on the ballot.

Voters in Orange County and the city of San Diego in recent years have stripped benefit-granting authority from their elected officials, reserving that power for the electorate. San Francisco has required voter approval of pension benefit hikes since its founding charter over a century ago.

The Ventura County Grand Jury recently recommended that voters there be given the same opportunity. Two members of the Board of Supervisors said they are willing to consider the proposal.

Advocates say the idea is increasingly appealing as a way to keep a lid on retirement costs, which have exploded as generous packages have been approved through collective bargaining. Orange County and San Diego have both struggled to pay mounting costs after granting pensions that, in some cases, provide 90% to 100% of pay beginning at age 50.

Ventura County is also seeing higher retirement costs even though it hasn't granted the richest pensions.

Supervisor Peter Foy believes it's time for change.

"It's an opportunity for more accountability to the people who pay the bills," he said.

Ventura County supervisors in recent years have resisted union demands to improve retirements benefits, particularly for sheriff's deputies and firefighters. But the pressure is constant, and Foy said a voter mandate could check the ability of future boards to grant more costly retirements.

"People over the years have been irresponsible about this stuff," said Foy, who plans to bring the issue before the supervisors in the next few weeks.

Board Chairman Steve Bennett said he's willing to look at the proposal: "Philosophically, I'm attracted to it. But I want to make sure there aren't unintended consequences."

A majority of the five-member board would have to agree to place such a plan on the ballot. Foy thinks a measure could be vetted in time for the June 2010 election.

Grand Jury foreman Ron Zenone said the panel investigated pension costs because they account for a large portion of the county's general fund. Pension costs grew 327% over the last decade and are projected to increase 20% to 25% a year for several years.

Ventura County is hardly alone. Eight years after granting one of the most lucrative pension plans in the state, San Diego County is trying to rein in costs by creating a tier of employees with lesser benefits. In February, the county's retirement fund had lost $2.5 billion, or about 30% of its value, as the stock market plunged. At that time, Dianne Jacob, chairwoman of the Board of Supervisors, said the county would have to increase its annual payment from $300 million to $700 million in five years.

Riverside County government, too, is looking to trim benefit costs after granting costly enhancements, and the Bay Area city of Vallejo declared bankruptcy last year in part because of climbing retirement payments.

Public employee unions have resisted allowing the public to vote on their pensions.

Mark Siegel, a spokesman for the American Federation of State, County and Municipal Employees, said bargaining can be complex and the public often lacks the information to fully understand negotiations.

"Voters don't always know the details," he said.

San Francisco has required voter approval of pension benefit increases since 1889. But the electorate has not rejected every enhancement in knee-jerk fashion, city records show.

Of 117 pension proposals put before voters, 78 have been approved and 39 rejected, said San Francisco retirement chief Clare Murphy. Hearings to explain the proposed change occur before each ballot, she said.

City workers' retirements are about average in the state, she said, adding that in June 2008, retirement accounts were 103.8% funded.

"You trade rich benefits for fund security," she said.

Even for municipalities that have ceded authority to the electorate, the problem is that pension benefits cannot be taken away once granted. That means taxpayers are stuck holding the bill for past actions, said Orange County Supervisor John Moorlach.

Increasing retirements, fluctuating fund values and pension enhancements have taken the county's once-flush retirement system from near-full funding to something closer to 60%, he said.

The county's Measure J, passed last year, mandates that voters approve any benefit increase. But the measure "only prevents the debt from expanding," Moorlach said. "It doesn't eliminate the problem right now. You still have the pig going through the python."


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