Pension Hikes Unaffordable, County Says

Boosting retirement benefits for government employees would cost Ventura County roughly $252 million upfront, nearly wiping out the county’s plush retirement fund surplus, according to a study released Monday.

In addition, the county would have to pay $36 million annually to replenish the account in order to meet all of its retirement obligations, the study found. The money would come from the county’s general fund, which pays for most public services and programs.

To take on such a large financial commitment could mean financial disaster for the county, warned Supervisor John Flynn.

“We have to move with a lot of caution,” Flynn said. “If we try to answer every union’s demand, and some are getting awfully nasty in their demands, then you have anarchy. And we cannot have that.”

The benefits report resulted from ongoing disputes between the county and its two largest labor groups, the Deputy Sheriffs’ Assn. and the Service Employees International Union Local 998, which represents clerks, social workers and accountants. Combined, the two groups represent about 5,000 employees. The deputies union is asking for a boost in some retirement benefits, and the SEIU seeks automatic cost-of-living increases in its pensions.

If the new benefits were approved, the county’s current retirement surplus would plummet from $296 million to $44 million, far too little to cover all of the fund’s obligations, the study said. That would be on top of an $8-million loss it has already suffered this year because of a sluggish stock market.

Under a worst-case scenario, the county would be forced to cut jobs and services to meet the unions’ demands, said County Executive Officer Johnny Johnston, whose office compiled the report.

“The question may be to the sheriff, ‘How many fewer deputy sheriffs can you handle to pay the ones you have more?’ ” Johnston said. “Because that extra money has to come from somewhere.”

But Barry Hammitt, director of the SEIU, was unsympathetic to the county’s assertions, arguing that supervisors always find the cash when benefit perks are on the table for high-ranking officials.

He pointed to newly elected Supervisor Steve Bennett and recently appointed Auditor-Controller Christine Cohen, both of whom were put into benefit categories that guaranteed them automatic cost-of-living increases on their retirements. Union officials are demanding the same benefit for lower-level employees.

“It’s a question of whether you want to treat your employees fairly,” Hammitt said. “The county has to reorganize their priorities so they can afford it.”

Hammitt has been leading SEIU’s tense negotiations with the county. Talks have stalled several times, prompting the union’s 4,200 members to vote in favor of a strike if their demands are not met.

Employees contend that their annual salaries have fallen as much as 27% behind wages of counterparts in neighboring counties. They are demanding an average 10% increase. The county has countered with a 3.5% offer.

A strike has been delayed to allow Hammitt to meet with Johnston on Wednesday to try to hammer out a compromise. Hammitt is optimistic the two sides will reach an agreement, but has warned employees to be prepared for the worst. He plans to meet with union leaders Wednesday night.

“If we don’t have an agreement, we’ll [tell members] to pick a date and get ready to march off work,” Hammitt said.

The contentious negotiations come at the same time the union representing 750 sheriff’s deputies is fighting with the county over their pay and benefit packages.

Though union leaders say deputies are currently paid on par with surrounding agencies, they argue that they could fall behind if their latest demands are not met. One of their most controversial demands is a retirement payout that would allow deputies with 25 years’ experience to retire at age 50 with payouts equal to 75% of their salaries, up from 50% under the current formula.

But Johnston said the costs of funding such benefits are too much for the county to absorb. He warned that if the county dropped below a $228-million retirement surplus, it would jeopardize its commitment to retirees.

If it comes to choosing one union’s demands over another, Flynn said he would favor SEIU.

“There are some inadequacies for the non-safety people, and we have to look at their needs at this point,” Flynn said. “That makes the safety people nervous and upset, but they already have the advantage.”