Stakeholders quarrel over proposed Target

Read the Marinscope article here.

 

Pension losses hook Marin taxpayers

Nels Johnson Marin IJ

Posted: 04/24/2010 09:25:35 PM PDT

 

Marin County pension chief Tom Ford, in front of the pension headquarters, said his preliminary calculations put the county’s unfunded liability at about $340 million, San Rafael s at $140 million and the Novato Fire District s liability at about $31 million. (IJ photo/Robert Tong)

Taxpayers across Marin must fill a gaping fiscal hole because the county’s pension fund lost $268 million last year as stock market losses torpedoed its investment portfolio.Pension stock market losses will force the county to pay about $8.4 million more to the pension fund next year than it did last year – a payment that accounts for almost half of the $20 million budget deficit that has forced county supervisors to curb spending on other programs, jettison vacant staff positions and cut services. The county’s $35.2 million tab next year does not include $6.1 million it also owes on a $112 million pension bond.

In San Rafael, pension payments will rise about $2 million, and the Novato Fire District will kick in an additional $900,000.

Even so, the agencies face mounting unfunded liabilities – the cost of guaranteed

benefits left unpaid. Pension chief Tom Ford said his preliminary calculations put the county’s unfunded liability at about $340 million, San Rafael’s at $140 million, and the Novato Fire District’s liability at about $31 million. The county tab does not include the $378 million unfunded cost of lifetime health care promised to employees hired before 2009.

Next year’s pension tab would have been even higher, but county officials persuaded actuaries to spread payments needed to cover investment losses over 30 years, rather than only 18. County Administrator Matthew Hymel noted the 30-year payment procedure is used at the California Public Employees Retirement System, or CalPERS.

The calculations also assume the pension portfolio will grow 7.75 percent a year, down from the 8 percent assumption used previously. Given last year’s loss, the pension portfolio has grown an average of only 2 percent annually over the past five years, but performance fluctuates widely, “and will meet this target over the long run,” Hymel said. The fund invested in stocks, for example, has grown about 17 percent this year.

As it is, last year’s losses force the county, San Rafael and other agencies to pump more money into the pension program in an era of declining property tax revenues, prompting officials to cut public services and raise new revenue to make ends meet.

Calculations involving rising costs and liabilities for all agencies in the Marin program were not immediately available, although the county pension board, recognizing portfolio losses, has boosted contribution rates as a percent of payroll for most. The county rate is 22 percent, up from 16 percent, while San Rafael’s is 46 percent, up from 41 percent. Novato fire checked in at almost 44 percent, up from 39 percent. That means that in San Rafael, for example, it costs taxpayers nearly half again of each employee’s paycheck just to pay for pension benefits promised by the City Council.

Rates dipped for the Marin-Sonoma Mosquito Abatement and Tamalpais Community Service districts. “As they reduce payroll, it reduces pension costs,” Ford noted, adding that in smaller districts, a change in payroll of just a few positions can make rates swing.

Marin’s pension system includes the county, the Marin courts, San Rafael, the Novato and Southern Marin fire districts, the Tamalpais and Marin City community services districts, and the mosquito district. The program covers 3,561 public employees, 1,979 retirees, and 300 survivor beneficiaries. Most Marin cities and agencies are members of the state pension program run by CalPERS.

More details on liabilities and costs faced by agencies that are members of the Marin system will emerge next month when an annual actuarial report is released.

Benefits are guaranteed by county supervisors and other governing boards no matter what they end up costing, and the only way to cut costs is to reduce benefits for new hires, or limit salaries of current employees, because pay is a key factor in determining pensions.

Grim statistics about the portfolio losses that propel higher contributions are outlined in an annual report for last fiscal year. The report indicated the pension fund paid out more than it took in as well, with employers, or taxpayers, contributing $54.6 million and employees contributing $17.4 million, for an overall contribution of $72 million. At the same time, beneficiaries collected $77 million.

The $5 million fiscal imbalance between contributions and payouts does not include $2.7 million in pension staff administrative costs and other expenses, such as $763,000 in legal fees, up $200,000 from the year before.

“No comment,” Ford replied when asked about the legal tab, which included a $13,000 litigation settlement. “The former administration referred lots of things to legal counsel,” added Ford, former Sonoma County treasurer who joined the Marin staff several months ago pending a search for a new pension executive.

Ford added he has cut legal spending in half by contracting with the office of County Counsel Patrick Faulkner for $265,000 and strictly limiting work by Ashley K. Dunning, a $400-an-hour attorney consulted extensively by Charnel Benner, former pension chief who was ousted last November.

The system’s $268 million investment loss came despite $8 million in investment expenses, much of it payments to fund advisers who pitched a variety of financial products. Under a new program, pay for advisers will be tied to the performance of investments they recommend, and fewer advisers will be used, Ford said.

At the end of the fiscal year, the pension fund posted a net decrease in assets of $285 million.

Overall, the fund totaled about $1.1 billion, with an investment portfolio that included 40 percent in domestic stocks, 20 percent in international stocks, 25 percent in fixed income, and roughly 15 percent in real estate.

Contact Nels Johnson via e-mail at ij.civiccenter@gmail.com

 

Mall: Don’t park Hummer here

Paul Jones/Marinscope

Published: Wednesday, February 24, 2010 2:05 PM PST

The recently renovated Mall at Northgate in Terra Linda has special “low emitting fuel efficient vehicles only” parking spaces, which a representative said added to the mall’s Leadership in Energy and Environmental Design points. As of press time, there was no word on whether gas guzzlers risk getting cited for parking in the spaces.

 

Police union still won’t take pay cuts

By Paul Jones
Marinscope Newspapers

Published: Wednesday, February 24, 2010 2:05 PM PST

Despite earlier optimism by San Rafael City Manager Ken Nordhoff and other city leaders, unions representing police officers and firefighters haven’t agreed to any pay reductions since Jan. 26 budget cuts were made by the city, which included seven positions at the San Rafael Police Department. If public safety personnel accept pay cuts, the savings could reverse the decision to lay off some of the employees cut Jan. 26, according to Nordhoff.

Those layoffs will be made final by the end of February.

Other unions agreed to accept roughly 5 percent pay cuts for their members prior to the Jan. 26 cuts to save positions, but Nordhoff said there has been no similar concession by police and firefighter unions.

“My negotiating team has met with Police Association representatives, but we don’t have any proposal from them or recommendations about what they might be willing to reduce or suspend,” Nordhoff said.

“I don’t think we’re going to achieve any cost savings out of public safety groups at this time.

“I don’t think we’ll have anything by the end of the month, so I think we’ll be completing the layoffs made Jan. 26.”

Nordhoff said he had initially expected the groups would consider pay cuts in the wake of the Jan. 26 layoffs.

“I was hopeful that there would be some ability and willingness for various groups to contribute in order to preserve some positions, and that just hasn’t been the case,” he said.

 

San Rafael Library tax measure approved

Read the Marinscope article here.

 

Council kills deficit, approves cuts, layoffs

Read the Marinscope article here.

 

San Rafael considers $49 yearly library parcel tax

Read the Marin IJ article here.

 

San Rafael council raises garbage fees

Read the Marin IJ article here.

 

Failure to secure labor concessions means San Rafael set to cut even more jobs

Read the Marin IJ article here.

 

Discussion to focus on balancing state budget

Read the Marin IJ article here.