Thursday, June 17, 2010 | County officials this week are beginning to flesh out financial estimates with their local retirement system with the goal of fully renegotiating employee pensions, asking workers either to pay more for their pensions or accept lowered benefits.
Yet the call to renegotiate is being met with a strong retort from labor groups in Orange County, which have been at the forefront of reforms in recent years.
In addition to giving in on wages, local unions — like the Orange County Employees Association and the Orange County Professional Firefighters — have agreed to reform costly retiree medical benefits and have ushered in lower benefits for new hires.
“In the race to reform pensions, we not only have beaten every other public agency on the track, we’ve lapped them,” said OCEA General Manager Nick Berardino.
He noted that others have to step up to the plate before employees are asked to do more. “We’ve taken the lead, and once the county gets everyone to catch up, we can talk some more,” Berardino said.
Earlier this week, county supervisors unanimously called on their CEO to work with the Orange County Employees Retirement System to start researching potential adjustments to public sector pension enhancements that were negotiated over the past decade.
The idea is to enter negotiations with a slew of local unions over the next two years with an idea of what kind of adjustments would give the county budget some relief.
The most pressure is expected to fall on public safety unions, which receive the highest pension benefits and require the lowest annual employee contributions.
Spiraling pension costs have become a focal point of budgetary discussions and election campaigns in Orange County ever since the expansion of benefits in 2001 for public safety and in 2004 for general employees. Since those benefits were adopted, the county’s unfunded liability for pensions has risen beyond the $3 billion mark.
The county move comes just as Gov. Arnold Schwarzenegger announced on Wednesday the details of a deal with four unions — including the CHP’s — that would allow for a new tier of retirement benefits and higher contributions from employees.
County Supervisor John Moorlach called for the review this week as officials begin their annual trek toward balancing the county budget. A frustrated Moorlach said spikes in pension costs — especially for public safety workers — are making budget cuts even tougher.
Moorlach noted that pension costs are up by 17 percent at the district attorney’s office and 19 percent at the Sheriff’s Department, adding that payments have doubled since benefits were expanded a decade ago. Current costs for public safety exceed the $100 million mark each year.
“It’s an ever-growing issue,” Moorlach said. “Something somewhere has to give.”
Comparing pension costs to a kidney stone he’s been trying to pass since election eve, Moorlach said, “We have to find some relief.”
However, other supervisors are pushing back a bit as well, noting that a new tier of benefits has already been negotiated with OCEA and is awaiting approval from the U.S. Treasury Department.
Even Moorlach acknowledges that OCEA has negotiated important concessions.
“Nick’s right,” Moorlach said in a rare instance of agreement with Berardino. “This kidney stone has to move in the public safety area of our budget.”
However, many negotiations have already ended, and reopening clauses are years away. The Association of Orange County Deputy Sheriffs finished it’s most recent negotiation last year, agreeing to a slight increase in officer contributions over the next few years.
Yet Moorlach said those concessions aren’t even close to filling the increasing gap.
“We need to go back to 2 percent at 50,” Moorlach said this week, referring to the pension formula that was in place before the expansion in 2001.
Officials from the sheriff’s deputies union did not respond to calls for comment.
However, in Riverside County — in a tacit acknowledgment that such renegotiation calls are in the future — the deputies union got county supervisors to approve a ballot initiative that would restrict any pension changes.
Moorlach warned that if annual pension costs aren’t lowered, service cuts and layoffs will soon be on the horizon for public safety.
He noted that supervisors have tried to work with public safety with little luck. Referring to a lawsuit filed against the local retirement system over deputy pension benefits, Moorlach said it was the only option because of their intransigence.
“Before we filed the litigation, we asked them (the sheriff’s deputies union) to do what OCEA did, pay for it (enhance pensions). And they said forget it.”
Referring to public safety, Moorlach said, “this is where our tumor is. It just keeps growing and growing.”
Without relief, there’s no future money for raises — and there’s increasing pressure on other departments to make cuts.
When Sheriff Sandra Hutchens was asked by Moorlach publicly about preparing potential layoff notices to deputies if certain budget numbers don’t improve, she replied that such a move would hurt morale.
He shot right back. “Your department is now consuming 50 percent of my general fund,” Moorlach said.
“Everyone else is making sacrifices for your two departments,” referring to the public safety area of the budget dominated by the sheriff and district attorney.
That kind of dynamic is what’s prompted Moorlach to argue for renegotiation. “Maybe we have to ratchet this up in order to save everybody.”
“We’ve done all the incremental, now let’s get dramatic.”
Please contact Norberto Santana, Jr., directly at nsantana@voiceofoc.org.