Pensions in Santa Barbara County Require Vigilance

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Source: Santa Barbara County Grand Jury

The 2021 Santa Barbara County Grand Jury conducted a follow up investigation to the 2017-18 Grand Jury “Pensions in Santa Barbara County” report to determine how the eight cities and the County have progressed since the 2017-18 Grand Jury issued its Pensions in Santa Barbara County report. 

In 2017-18, the Santa Barbara County Grand Jury issued an investigative report that looked at the pension plans of Santa Barbara County and the eight incorporated cities within the County. That report found, among other things, that there were substantial liquidity and solvency risks to the sustainability of many of the public defined benefit pension plans in the County and that if there are additional fiscal shocks, such as a fall in tax revenues or a period of low returns on pension assets held by the California Public Employee Retirement System and County of Santa Barbara EmployeeRetirement System, then other actions may be required. 

Salaries and benefits, including pension costs, are the largest annual operating expenditures of the County and its eight cities. In addition, the unfunded pension liabilities for future payments to current and former staff are also a significant portion of each of their balance sheets, totaling $1.8 billion dollars. Pensions and the related liabilities are an important part of the cost of operating all local governments. The Jury was told that governments often cannot provide the same level of wages and benefits, to attract and retain talented and capable staff, as “for profit” organizations, because of the need to balance providing required services to its residents against the burden of taxation or fees charged to those residents. Pensions, the Jury learned, provide away for local governments to attract capable staff while deferring some of the costs to the taxpayers to the future. Pensions are an attractive benefit for many as they help assure staff of income streams after retirement. 

The County and cities need to make sure they are prepared to fund future pension obligations when due, without disrupting critical services or over-burdening their residents with extra fees and taxes. 

The Jury discovered that, while risks continue to exist, especially for those cities that are suffering financial challenges, there are no immediate threats and that, with proper attention, all cities and the County should be able to deliver the necessary services to its residents and meet its pension obligations as they become due. 

The complete report is posted on the Grand Jury’s website: www.sbcgj.org

The Santa BarbaraCounty Grand Jury is an integral part of government within the judicial branch. The Grand Jury acts independently, yet it is under the general supervision of the SuperiorCourt Presiding Judge to assure that it acts in accordance with the Penal Code of the State of California. 

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PitMix Dec 06, 2021 09:41 AM
Pensions in Santa Barbara County Require Vigilance

Should have led with this one-
The Jury discovered that, while risks continue to exist, especially for those cities that are suffering financial challenges, there are no immediate threats and that, with proper attention, all cities and the County should be able to deliver the necessary services to its residents and meet its pension obligations as they become due.

RHS Dec 06, 2021 10:10 AM
Pensions in Santa Barbara County Require Vigilance

What is "over-burdening their residents with extra fees and taxes" about? We want decent and competent civil servants. We have to pay them fairly. Otherwise such positions will be left to corruption to fund their family and retirement. Anyone who thinks civil servants are overpaid is welcome to compete for their job. Unlike private industry that schemes with tax dodges and sheltered benefits those who work in the public are naked before the IRS and pay a full share. If private incomes were as transparent there would be no deficit in this country.

a-1638814610 Dec 06, 2021 10:16 AM
Pensions in Santa Barbara County Require Vigilance

"Pensions, the Jury learned, provide away for local governments to attract capable staff while deferring some of the costs to the taxpayers to the future. " Translation: we want a level of service now that we can't afford so we're going to defer some of that expense to future generations so in the future they can pay for higher level of service today.

a-1638817729 Dec 06, 2021 11:08 AM
Pensions in Santa Barbara County Require Vigilance

In the very near future the Social Security (that is pensions for non government workers) Trust Fund will be unable to meet it's obligations. This will mean an increase in the Social Security tax (again for non government workers), a decrease in the social security benefit for retired individuals, a increase in retirement age, or probably some combination of these.
What will happen if this happens to non government workers while government workers continue to receive a full and increasing pension? Remember that the Social Security choices were not made by private individuals but by government workers. I foresee a massive unrest.

Byzantium Dec 06, 2021 11:30 AM
Pensions in Santa Barbara County Require Vigilance

Cities and counties are not meeting or delivering necessary services. Public safety and infrastructure maintenance, repair and improvements are the most notoriously and chronically under-funded public services Those were weasel words gratuitously added with huge qualifiers by the grand jury for the exact intended misuse as noted by the previous poster - a recipe to continue to ignore and do nothing. -There is no "immediate threat" -as in the next 24 hours; but there is clearly a long-term risk that is not being addressed. How will the cities and counties address these known funding risks - county grand jury put you on notice, and we the taxpayers want to know the specifics how you will address the systemic pension under-funding deficit exposed by thee county grand jury. Future city and county retirees, you need to demand more too so you do not get short-changed, while the"immediate" retires today get paid off in full.

yacht rocked Dec 06, 2021 11:33 AM
Pensions in Santa Barbara County Require Vigilance

Compare to the Federal gov't which established a 401k-type retirement system in 1986 for employees hired in 1984 and beyond. It requires employees participate in the Social Security system, makes a contribution to their 401k (actually the Thrift Savings Program), and encourages employees to make additional contributions to the TSP for their retirement. Additionally it provides a small pension. Prior to the new system, employees had an expensive pension program (similar to the County) and did not participate in Social Security. (There are many finer details but this is the rough outline.) It also encourages unhappy employees to move on because they can take their 401K with them. California state, counties, and cities should follow this lead.

Byzantium Dec 06, 2021 11:48 AM
Pensions in Santa Barbara County Require Vigilance

When the very generous defined-benefit pension went into place over 20 years ago for government workers, we were mainly paying for only one worker and saving some money for their later pensions. Now we are paying for two workers - one who is presently working in that same position, and also paying the former worker who has now retired, often with tricks and inside games to earn far more in their life time pensions than originally projected and budgeted for. The inherent evil is continuing the use of defined- benefit pensions for government employees, when all private industry employees have switched to 401K defined contributions pensions. Instead we signed a blank check exclusively for government employees, and this escalating amount is now due and only increases over the next decades, leaving those who never voted to enter this sort of long-standing contract guarantee the duty to keep paying for it. Transparent California sets out what our local retired government employees now get as life-time pensions. Look them up and compare them to your own retirement plans. This is why there is such take no prisoners partisan efforts to win local elections - it is what theses partisan interests can do for themselves; and not what can be done for the local residents. Now you know. How will you vote in the future?

PitMix Dec 06, 2021 01:00 PM
Pensions in Santa Barbara County Require Vigilance

Last data I could find is SB County's pension is 80% funded. Ventura County is 90% funded. Calpers funded at 71%.
It seems like 80% funded is a reasonable number because ongoing contributions from existing employees provides funds for the rest.
100% funding like the Postal Service is required to do by Congress leads to all kinds of problems and does not take into account employee contributions.

citizenSB Dec 06, 2021 06:15 PM
Pensions in Santa Barbara County Require Vigilance

" Pensions, the Jury learned, provide away for local governments to attract capable staff while deferring some of the costs to the taxpayers to the future"
Absolutely crazy logic - The county needs to live within its means now -- pay a competitive salary and 401K with no deferring cost -- stop with this craziness.

Transparent Dec 06, 2021 08:59 PM
Pensions in Santa Barbara County Require Vigilance

County? How about the state, which is fraudulently running around talking about surplus while hiding the massive pension liability as if it's not real?

This isn't a dem or repub issue. The future of California, whether it has a progressive or a conservative bent, will be stillborn if it's saddled with massive debt crippling its economy. Neither ideology is so strong as to withstand that birth defect.

PitMix Dec 07, 2021 08:46 AM
Pensions in Santa Barbara County Require Vigilance

No discussion of public pensions is complete without talking about public safety pensions. For most counties, public safety pensions is about 2/3s of the obligation even though the number of retirees is small relative to the total employee count. You don't see people complaining about that, do you? The average pension for other employees, if you exclude top management, is actually pretty small.
https://californiapolicycenter.org/what-is-the-average-pension-for-a-retired-government-worker-in-california/
For LA County, which has a generous pension plan with medical benefits:
Sheriffs – pension $88,144, benefits $18,395, total $106,539
Firefighters – pension $104,905, benefits $20,350, total $125,256
All other retirees – pension $50,484, benefits $10,581, total $61,065

PitMix Dec 07, 2021 08:57 AM
Pensions in Santa Barbara County Require Vigilance

From the same source:
In Los Angeles County in 2015, disability pensions were reported for 6.5% of former miscellaneous employees, for 40.5% of all retired former sheriffs, and 65.7% of all retired former firefighters; in San Jose’s retirement system whose participants are exclusively former public safety employees, 50.0% of the retirees were receiving disability pensions.

citizenSB Dec 07, 2021 09:16 AM
Pensions in Santa Barbara County Require Vigilance

@pitmix -The 'average' is very misleading -- you need to look at the average retirement for those with a 30+ year career. You will see a very different story.
Also the ability to not pay taxes on retirement if a 'disability' could be attributed to the job is widely scammed.

a-1638898171 Dec 07, 2021 09:29 AM
Pensions in Santa Barbara County Require Vigilance

California’s local governments are especially affected by volatility in pension costs:
At least half of the employer contributions to state retirement systems in California come from local governments, which have smaller budgets and fewer ways to generate revenue when faced with higher pension costs. For example, pension contributions in Stockton rose from $6.8 million in 2002 to $41.5 million in 2017. One estimate suggests city pension costs will nearly double and reach up to 16% of general fund budgets by 2024–25.

PitMix Dec 07, 2021 02:33 PM
Pensions in Santa Barbara County Require Vigilance

Citizen, not everyone makes it to 30. Yes 30 yrs gets you more. But average is average, and is also skewed by the large pensions given to the managers. Like the average wage in SB is skewed if you include Hope Ranch and Montecito.
But the data I gave gives you a good idea of how much public safety pensions are costing us.

citizenSB Dec 07, 2021 07:02 PM
Pensions in Santa Barbara County Require Vigilance

@pitmix -- I worked for 40+ years and get $33,600/year in social security. That is the comparison I am looking for. I though I was being generous asking for only 30+ years.

PitMix Dec 08, 2021 08:07 AM
Pensions in Santa Barbara County Require Vigilance

Citizen, nobody is recommending you base your retirement on Social Security. What happened to your 401K? SS is just to make sure you don't starve, but it won't be a great retirement for you.

SS has to cover a bunch of people that never paid into the system, and it doesn't do investments that allows the money to grow like the pensions do.

Byzantium Dec 08, 2021 09:18 AM
Pensions in Santa Barbara County Require Vigilance

Pitmix makes the case government employees should be paid enough to live in Montecito and Hope Ranch, with the full retirement income for life to thoroughly enjoy this. Anything less is just not fair. Hard case to make considering multiple studies show city of Santa Barbara has twice the numbers of employee as other similarly sized coastal cities with similar locations and missions. Cut city staffing in half, so current city revenues can then be shared by fewer people. Schools same thing - eliminate mandatory free K-12 for those here illegally and the Prop 98 funding will instantly increase per-pupil spending and reduce class sizes at least by half - vastly increasing teacher satisfaction and perhaps even digging ourselves out of being among the bottom ranked school system in the US. Start thinking outside the box - fewer workers, fewer demands from outsiders and the more benefits than can be showered on fewer government employees at every level.

PitMix Dec 08, 2021 02:08 PM
Pensions in Santa Barbara County Require Vigilance

Byz, you need to work on your reading comprehension.
I doubt very many children are here illegally now. And your favorite prop 187 was nullified by the courts. I doubt your data on SB employees is true. As for California, we rank 7th from from the bottom in number of state employees per capita.
State Value Rank
Nevada 385.4 1st
Arizona 390.7 2nd
Florida 421.4 3rd
Michigan 434.2 4th

You're not having a very good day.

Byzantium Dec 08, 2021 03:15 PM
Pensions in Santa Barbara County Require Vigilance

Pitmix, read first, then comment. The CITY of Santa Barbara is over-staffed according to several management analyses done in the past years. Double other similarly situated cities. We paid for those studies. You should be able get them with a freedom of information request. Too bad they continually got ignored.

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