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Thursday, July 8, 2010 | Relatively speaking, contract talks have largely been pleasant experiences for the management ranks in Orange County government. After all, when representatives of a managers union negotiate for wages and benefits, they are essentially negotiating with themselves.
But any government exec who thinks next January’s contract talks will be pleasant, should probably think again. This is especially true now that the Orange County Employees Retirement System has released a list of 500 former top-tier executives and high-level employees whose annual pension checks total more than $100,000.
The numbers are making supervisors’ eyes bulge.
“These guys are getting paid a lot,” said Orange County Supervisor John Moorlach after reading the list.
“It points out to you why they didn’t protest. You didn’t see management very vocal in 2004,” said Moorlach, referring to the 2.7 at 55 pension enhancement that county supervisors adopted that year.
The benefit allows long-time workers to retire earlier, at age 55, and enhanced the amount of their monthly check as retirees. This enhancement is one reason why the county’s unfunded liability has ballooned to more than $3 billion.
Moorlach gets upset over the payouts because the executives receiving them were in many cases the very people who were representing taxpayers during the negotiations and called him a “Chicken Little” because he voiced concerns about the county’s unfunded liability.
Now, he’s negotiating on behalf of the county across from the same managers who supported the expansion that he railed against in 2004.
“Everything’s on the table,” said Moorlach, while avoiding any comment on the county’s specific negotiating plans.
One thing is clear: Every employee group can expect to be asked to pay more to help fund their pensions. And after last week’s disclosure of top tier retirement payouts, nobody can expect pressure like the managers union.
She said those kinds of payouts are going to influence county supervisors’ outlook going into negotiations with manager and other groups.
“Everyone has to chip in more for their own pension. How much depends on the negotiations,” Nguyen said.
“Going into these negotiations, we’re going to ask, they have to understand we can’t continue to afford these pensions. If the system is broken, the money won’t be there. … We either work together or we go down together.”
Nguyen also said the brewing confrontation with the county attorney’s union — which covers prosecutors, public defenders and county counsels — isn’t helping her mood.
“It’s very unfortunate. I’m shocked,” Nguyen said. “The managers last year took a 3 percent (pay raise) deferral, OCEA (Orange County Employees Association) also gave up. Everybody has given up something. The attorneys have decided not to (defer a 3.5 percent increase). We’ll have to do what we have to do as a county … layoffs, furloughs.”
Karen Davis, executive director of the Orange County Managers Association, acknowledges tough challenges ahead for negotiations, which start officially in January for the roughly 1,000 managers throughout the county bureaucracy.
Davis notes that the retirement benefits given to top tier executives are “negotiated retirement rates approved by the Board of Supervisors. … It’s hard to remake history,” she said.
She also points out that many of the executives retiring in the $100,000 club also paid into the 2.7 at 55 benefit when they were at the county. But she admits that the payouts on the list released by the Orange County Employees Retirement System present a stark picture: “It gets very expensive,” Davis said.
Davis said the managers union’s approach to negotiations with the county will be cooperative. “The managers are certainly interested in looking at the options the county is working on,” Davis said.
Orange County Employees Association General Manager Nick Berardino says one clear option would be for managers to pay into the pension system at the same rate that rank-and-file employees do.
“Any further discussion on pensions, the precondition is that everybody gets on a level playing field. … They (managers and executives) have to pay 100 percent of the employee costs,” Berardino said.
This is the same drum that Berardino has pounding for years. Davis and Mauk, meanwhile, have consistently resisted calls for more concessions from the executive ranks.
“We oftentimes don’t have the same perspective that OCEA has,” Davis said. “Instead of pointing the finger at other groups, it’s more productive to work within the system and determine what is the best solution for everyone.”
Mauk’s patented response is this: “There’s not different classes of the Orange County employees. I’m not going to get involved in treating people differently.”
However, it is an issue in which Moorlach and Berardino, who are often at odds with each other, are in agreement.
“It’s the one thing Nick keeps reminding everybody on,” Moorlach said.