Marin County’s civil grand jury
has again proved itself to be a proactive agent for reform and good government.
The publication of its latest report, “Pension Enhancement: A Case of
Government Code Violations and A Lack of Transparency,” is an exposure from a
Marin perspective how the Golden State’s public employee pension systems zoomed
out of control.
The grand jurors explain that
in just one six-year period, between 2001 and 2006, there were 36 pension
enhancements by just four Marin agencies, “each of which appears to have
violated disclosure requirements and fiscal responsibility requirements” of
California law.
The report looks at Marin’s
county government, the city of San Rafael and two fire districts, Novato and
Southern Marin. Those four were selected because unlike other Marin cities and
special districts that belong to the state retirement system, CalPERS, they are
members of the Marin County Employees Retirement Association.
The jury reports that during
the critical periods and upon advice from their attorneys, the four agencies
broke the law by not holding public hearings when “enhancing” their employees’
retirement benefits. More critically, they failed to conduct accurate or timely
actuarial evaluations of the future cost of those enhancements.
This is a big deal.
The jury is saying that the
public was kept in the dark while “the unfunded pension liability of MCERA ...
increased from a surplus of $26.5 million in 2000 to a deficit of $538.8
million in 2013.”
Since the granting of these
benefits was in violation of California law, arguably they’re not properly
vested and subject to cancellation.
As Marin’s Citizens for
Sustainable Pensions has long pointed out, public pension deficits have broad
implications.
While senior bureaucrats
benefit, lower-income residents dependent on the frayed public safety net are
most harmed by these excesses. Money diverted to fund rich pensions
necessitates cuts to essential social services and infrastructure maintenance.
The reality is that the bulk of
pension cash funds retirements and lifetime health insurance for those civil
servants at the top of the government food chain. As a percentage, relatively
little goes to those employees earning under $100,000.
The poster boy for this
propensity may be Marin County Counsel Steven Woodside. A competent attorney
who has served as the top lawyer for Marin, Santa Clara and Sonoma counties,
Woodside is a triple dipper enjoying the fruits of pension enhancements.
It’s chronicled in California
Policy Institute’s “Transparent California” database, assembled from
information obtained via the Public Records Act.
On top of his $256,636 total
compensation package from Marin, Woodside now receives two pensions from his
past employers. He annually reaps $94,779 from the Santa Clara retirement
system and gets another $82,606 a year from Sonoma.
The county’s senior civil
lawyer has an annual gross income from all governmental agencies of $434,020.
Perhaps the violation exposed
by the grand jury with the greatest negative impact was the failure to publicly
document “the fiscal impact that the proposed benefit changes or salary
increases will have on the funding status of the county’s employee retirement
system.”
Without accurate and timely
actuarial studies, it’s impossible for decision makers or the public to know
the impact of actions often shrugged off as inconsequential and buried on
council and supervisorial “consent calendars.” Certainly the public was unaware
that these “enhancements” would cause the county to face a half-billion-dollar
pension deficit.
Imagine the brouhaha if that
fact had been known before any decision was made. That would be a mere
kerfuffle compared to the explosive that will occur if the public pension house
of cards ultimately collapses and taxpayers find out that they’re holding an
empty bag.
April
25, 2015
Marin
Independent Journal
By Dick Spotswood, Columnist
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