The following piece was submitted to The Union as an Other Voices on Jan 16th 2008.
"Michael McDaniel
The system
is broke, let’s focus on solutions.
Nevada County, Grass Valley,
and Nevada City taxpayers and employees should be
alarmed by the current unfunded debt associated with our local government
agency pension plans. Elected officials of the past have handed current
community leaders pension debt in the tens of millions of dollars. In the City
of Grass Valley's case, they recently acted to make the problem worse (amending
the pension plan from a 2% at age 55 TO 2.5% at age 55). Pension payments
promised to current public employees are not being funded by today's
leaders. A recently published report by Sierra Environmental Studies
Foundation identifies and explains the dire condition of our community’s public
employee pension plans. Our areas pension plans are in the red as follows
(approx):
Nevada County $48,000,000, the City of Grass
Valley $4,000,000, the City of Nevada City $677,000.
The report (found at
www.sesfoundation.org) has instigated considerable discussion. The report
insinuates several solutions being enacted across the United States
by communities in the same predicament. I would like to take this
opportunity to highlight 3 actions that would help our community to meet their
public employee pension plan obligations.
First, I suggest that each local
government agency provide a detailed compensation calculation to each of it's
employees on a quarterly or annual basis. Employees in the public sector
are generally unaware of their true compensation when health benefits, pension
contributions, sick leave, vacation pay, overtime, etc are considered.
The SESF report cites a compensation analysis completed by the City of Nevada
City whereby an employee with a base salary of $36,367 actually costs the city
$69,039.59 (see report for details). It
is my contention that the average public employee does not understand their
true compensation; given the exceptional benefits they are provided. It would
be beneficial to all interested parties to have such compensation meticulously
outlined and provided to each public employee at least annually.
Second, each public entity should
strive to retain private companies and independent contractors for cheaper
labor. Nevada County management and the
Board of Supervisors should be commended for their work in decreasing the
number of staff at the county. The current Board of Supervisors has
decreased the number of county staff by approximately 64 employees, including 4
department heads. It would appear that the current BOS acknowledged a possible economic slowdown (especially in real estate which equates to less property tax revenues) and acted prudently to curb some expenses.
Lastly, and perhaps most
importantly each entity should move immediately to stop offering defined
benefit pension plans in favor of a 401(k) style retirement plan to all NEW
hires.
Such
positive changes would help insure that current public employees' pensions ARE
funded and that taxpayers are NOT asked to bail out years of mal-management.
For public employees and taxpayers (those directly affected by this unfortunate issue) I strongly encourage
you to comment on The Union website below this piece, comment to the SESF blog (http://sesf.typepad.com/ )
and contact your elected officials. It is imperative to put this issue at the top of the coming year’s election topics list."
Recent Comments