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Council to grapple with pension issue

While the cascading dominoes of state, county and municipal budget deficits have crowded the headlines for more than a year, looming in the shadows is a bigger fiscal problem that could dwarf what California has been through so far.

That problem is the unfunded liabilities attached to public employee retirement plans, a subject to be explored at Wednesday’s City Council meeting, during an agenda packed with budget issues.

 Across the state, the cost of pension plans for public employees continues to rise, and according to a report from Sonoma City Manager Linda Kelly, “A former CalPERS actuary warned that by 2014 it will be common for local governments to budget 50 percent of a police officer’s salary, 40 percent of a firefighter’s salary and 25 percent of a miscellaneous employee’s salary for their pensions.”

Those costs are clearly unsustainable and have several causes. One, of course, is the big hit pension investment funds have taken during the recession. Another is benefit formulas that were enhanced in 1999 by the legislature in two bills that allowed local governments to negotiate higher pensions. One result of that legislation was a 50 percent increase in CHP pensions, a benchmark that then drove other collective bargaining agreements with local law enforcement agencies.

And a third cause for spiraling pension costs is the increased lifespan of retired workers.

In 1935, the retirement age for a state highway patrol officer was 60 and the life expectancy for a 20-year-old in the labor force was mid-to-late 60s. Today, many safety employees (police and fire) can retire at 50 with full pensions and California has the third-highest life expectancy in the nation, at 80.37 years. That’s a hopelessly expensive equation virtually every city and county is now struggling with and the Sonoma City Council will devote a 90-minute special session to the subject on Wednesday, from 5:30 to 7 p.m., in advance of the regularly scheduled City Council meeting, delayed from Monday because of Presidents Day.

Following the pension study session, the council’s regular agenda will include:

• A proclamation declaring March as Big Read Sonoma County Month.

• A public hearing and discussion about the possible adoption of a resolution establishing a fee for news-rack permits, following a Feb. 6 ordinance regulating the placement, appearance, number, size and servicing of the newspaper boxes on city sidewalks.

• A mid-year budget review and discussion on what direction to give city staff for addressing the estimated $500,000 in revenue that could be lost as a result of the dissolution of the city’s redevelopment agency.

There will also be consideration of having the mayor sign a letter of support for reintroduction in the U.S. Congress of HR 192, a bill authored by Rep. Lynn Woolsey, D-Petaluma, that would expand the boundaries of the two National Marine Sanctuaries surrounding the Farallone Islands and the Cordell Bank.

Both the special meeting and the regular meeting will be held in the Community Meeting Room, 177 First St. W. The public is invited.