(Napa County) Napa rejects grand jury’s pension recommendations

June 25, 2014

Napa Valley Register

By Janelle Wetzstein

City officials said “thanks, but no thanks” to recent Napa County Grand Jury recommendations on how local jurisdictions can work together to reduce public employee costs.

The recommendations – which were to form a countywide joint pension committee tasked with developing strategies to address rising employee retirement costs and to release annual employee-cost reports – came after a 2013-2014 grand jury report was issued on April 3, about nine months after the grand jury reported on the status of county pensions.

While the grand jury applauded efforts by Napa County municipalities to reduce their long-term employee retirement costs, it also pointed out that significant financial risks still exist. Most of these risks come from future increases in annual pensions bills paid to the California Public Employees’ Retirement System, known as CalPERS. The increases are part of an effort by the state agency to fully fund its long-term liabilities at a faster rate.

But how local cities and the county handle those increased payments — along with their rising employee health benefit costs — could vary widely by jurisdiction. For example, Yountville doesn’t have public safety employees of its own, but contracts with the county for services. The city of Napa has more than 400 employees, while Calistoga has only 46. St. Helena’s employees pay their additional post-employment benefits by using rolled-over sick leave benefits.

With those differences in mind, Napa’s city leaders, supported by the Napa City Council, declined the grand jury’s recommendation to form a joint task force, saying that such action is not warranted.

“What may be a solution for one agency will not necessarily be the best fit for another,” the city wrote in its response to the grand jury.

The second grand jury recommendation, which suggested the county Board of Supervisors and the incorporated Napa jurisdictions issue an annual report summarizing each entity’s pension and employee benefit funding statuses at the end of each fiscal year, is something that CalPERS already does on its website.

According to Napa City Finance Director Roberta Raper, the suggestions were not relevant for the city.

“Napa is actually ahead of most jurisdictions in terms of employee cost-sharing of retirement costs,” she the City Council last week. “Each entity is very, very different. We feel that it is valuable to meet to discuss funding strategies, which we already do.”

After the grand jury’s initial report was released, City Manager Mike Parness said that comparing each jurisdiction’s pension costs is like comparing apples to oranges. He said that while meeting wouldn’t be a bad idea, it would only go so far in addressing the issue.

Raper agreed and said last week that the grand jury’s move of comparing all Napa County cities to one another, made little sense.

“The scorecard approach that was used has some flaws,” she pointed out.

Raper promised the city would continue communicating with other local jurisdictions on long-term funding solutions in the future.

The city’s response is similar to that of other Napa County jurisdictions, which generally agreed that conditions are so different in each location that a joint task force would achieve little.

“There could be some value in meeting together to discuss pension funding and managing pension funding and (retiree health costs),” the Calistoga City Council wrote to the grand jury earlier this week, “but the best options for each agency may be very different.”