Letter to Ventura County Board of Supervisors
Board of Supervisors -
We have been told by the Board of Supervisors that an effort is underway on pension reform. We are pleased you are finally addressing the issue and following through with the commitment made last year. At the same time VCTA is concerned we have heard nothing from you in almost 11 months since that commitment was made.
Reform is needed to curtail and prevent future abuse in the system. On March 15, 2011 the VCTA recommended to the Board that it take various steps to ensure the county provides transparent, fair and sustainable retirement benefits for employees. Among those recommendations were four that could be addressed by resolutions of the Board:
1. Exclude employer "pick-up" of the employee's retirement contribution from compensation earnable, as other '37 Act counties have already done.
2. Restrict elected officials to the standard 401(k) with a County match not to exceed 3%
3. Restrict annual leave redemption for all management, confidential clerical and other unrepresented employees. 4. Delete Section 612 "Education and Incentive Pay" of the Management Resolution for management, confidential clerical and other unrepresented employees.
The Board responded to one of our recommendations at it's April 5, 2011 meeting; the restriction of the annual leave redemption. Rather than attempting to deal with the problem of top managers using the vacation benefit system to spike compensation and pensions, the Board suggested a policy change that "suspended vacation buy-backs for new managers, pending modifications" saving taxpayers nothing.
On November 15, 2011 the VCTA appeared before the Board and requested an update on the pension reform package. The CEO said information would be available for the public by the end of 2011 or early 2012.
In January 2012 as part of our continuing inquiry into the pension system, VCTA discovered Ventura County is the only '37 Act county that continues to include the employer "pick-up" in pension calculations. The county also applies a 133% "gross-up" to the amount picked-up, further inflating employee pensions. San Bernardino has a partial inclusion for some employees, but Los Angeles, San Diego, Orange, Santa Barbara, Sacramento and the other 13 counties operating under the 37 Act elected not to include these payments.
Also in January in an apparent confirmation of our findings, the CEO stated county retirement benefits when compared to peer jurisdictions, are "high on compensation earnable" due to factors such as "leave redemption and gross-up" calculations.
Both the County and VCTA recognize fundamental pension reform is impossible without taking steps to correct the issue of high compensation earnable. The initial step should be the implementation of our four recommendations, starting with management, confidential clerical, other unrepresented employees and elected officials.
We understand most changes for the represented employees need to come through the bargaining process, but if the county does not lead with management it will have no credibility when bargaining with other labor groups.
The time for change is overdue. Ventura County is clearly an outlier in its pension system and Taxpayers are bearing the burden. It is not enough to merely create a new level of "reasonable" pensions which would only apply to new employees and leave the existing system basically untouched for current employees and elected officials.
The County workforce is made up of dedicated, hard working, productive people and we appreciate their efforts. But we all must realize that the pension system as we now know it has brought unexpected and undeserved benefits and has turned County management into a new privileged class. The only people who can bring sanity back to compensation and pensions are the five elected supervisors.
We are sending this letter to each of you with the expectation of hearing what our elected officials are doing in response to our almost two year call for pensi0n reform. Specifically, we appreciate a reply within 30 days of the date of this letter that addresses which of our proposals you will not support for unrepresented management and elected officials, your reasons for refusal and the timeline as to when the remaining proposals will be implemented.
Thank you in advance,
David P. Grau
Chairman of the Board, VCTA
Dick Thomson
President, VCTA
cc: Michael Powers, CEO
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