Group Urges Pension, Fiscal Reform

A group made up of economists, financial experts and other concerned residents is calling on Sonoma County to revamp its pension system, privatize some government functions and not enter into new and potentially financially ruinous agreements such as a new power authority in hopes of generating more clean energy.

Over the past two years, members of New Sonoma, as the group is known, have been meeting to discuss what could be done to reverse the county’s financial crisis caused largely by an increase in pensionable salaries that have left the county with $500 million in unfunded pension liabilities, according to the group’s statistics.

New Sonoma has held meetings with several county supervisors, researched pension data and even authored detailed reports and white papers. Taken together, the group’s message is that business as usual is no longer an option and that decisive action in needed—right now.

“When you have a financial crisis like we do here, you have to come up with creative solutions,” says Ken Churchill, the founder of New Sonoma and a retired CEO of a Day Star Energy Systems, a solar energy company.

“What I see now is a group of managers who are afraid to make the tough decisions and who have allowed unions to become so powerful. We want to restore power to the people. Without pension reform, people will just continue to see more services cut.”

All Sonoma County Supervisors have acknowledged that growing pension costs need to be dealt with, but say they are stymied by existing contracts with labor groups.

In May, Supervisor Efren Carrillo told the Press Democrat that the board has been “aggressively demanding answers from county staff about what the law will allow us to do” in terms of reducing pension costs and that the county leadership should set an example through their own concessions.

One of New Sonoma’s central arguments is that county employees have not contributed their fair share toward pensions, despite receiving a pension increase in 2002. That has resulted in the county spending 40 percent of payroll costs on pensions alone and led to a growing budget deficit.

“People in Sonoma County government retire with 90 percent of their salary," Churchill says. "We are number one in the country in terms of pensionable benefits. And that’s not something we can continue.”

A Grand Jury report released last month concluded that California Employees Retirement Law requirements may not have been followed when the county approved pension increases in 2002. But the all volunteer group was not able to complete its investigation “due to time constraints and a difficulty in locating the necessary documents,” meaning that a lawsuit against the county may be the only way the dispute over pension increases will be reversed.

If the supervisors are not able to lower pension formulas, New Sonoma wants to create a ballot initiative that will allow voters to decide what public employee salaries and benefits should be.

Beyond pension reform, the group also wants to find efficiencies in the day-to-day operations of the county, that could include using staffing agencies to fulfill administrative tasks. Another is a recommendation that the county not spend any more money pursing , a program that would set up a separate utility company in order to generate clean energy locally.

“We are very concerned about the county taking on any new debt and selling bonds in order finance renewable projects,” Churchill says, adding that state mandates requiring PG&E to obtain at least a third of its energy from renewable sources negate the need for the authority and that it will be hard to gauge how much energy to buy, resulting in rate increases.

“People are cheerleading this effort, but studies show that people don’t want to pay more for clean energy,” Churchill says.

The county says there are many advantages to creating its own power including reducing the need to purchase clean energy from out of state, creating new jobs and spurring the renewable energy sector which often depends of government incentives before private investors are willing to commit.

Other founding members of New Sonoma include Madeline Schnapp, an economist specializing in identifying emerging trends and former Director of Market Research for O’Reilly Media, Robert Williamson, a former corporate comptroller and fiduciary, Andrew Simpson, an investment banker who has done work for the European Union and Bob Andrews, who served on the City of Santa Rosa's task force on pension reform and writes a column for North Bay Business Journal.

Many are also members of the Sonoma County Taxpayers' Association, a group that urges fiscally conservative policies and opposes tax increases.

To see members' full profiles, visit newsonoma.org

At the end of the day, New Sonoma is hoping to generate interest among residents and create a vocal group that will pressure county officials to enact change.

“If we can become thousands of voices and let people know what’s happening, then we have succeeded,” Churchill says. “We can’t expect our government officials to not serve themselves instead of us.”