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The Long and Unkempt Road

Columnist: Bob Andrews
June, 2012 Issue
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Bob Andrews
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I’ve seen the future! It was revealed to me in two official road signs I found on Wolf Ridge a few miles south of Sebastopol. One proclaims “PRIMITIVE ROAD—CAUTION—USE AT YOUR OWN RISK—THIS SURFACE IS NOT REGULARLY MAINTAINED.” Just a few more yards up, a second reads: “EARTH FISSURES POSSIBLE.” I’m not making this up.

These signs portend the future, because a disturbing number of Sonoma County’s 1,382 miles of roads are falling apart. As reported on the website for Save Our Sonoma Roads, the streets and roads in Sonoma County are ranked eighth worst out of 58 counties in California. This is troublesome in general, but really hits home when you follow a bumpy, poorly maintained rural Sonoma County road right up to the border with Napa or Marin counties, only to find that the road becomes smooth and well maintained at that point. Ouch.

One estimate is there’s a $120 million road maintenance backlog. Phil Demery, director of transportation and Public Works for Sonoma County, has said the county will need to spend $50 million or more per year to return roads to an acceptable level. Michael Troy, co-founder of Save Our Sonoma Roads, says, “It could cost $1 billion to properly repair or rebuild all the roads in Sonoma County. The problem is so large, it’s beyond the taxing ability of the county to raise the needed funds. It’s like Greece, a major ‘health’ issue.”

In response, on a basis adjusted for inflation, Sonoma County supervisors have decreased the general fund budget for road maintenance every year since 1992, to a paltry $4.5 million, while cutting staff more than 40 percent. It’s now clear that the road debacle will not be cured by state or federal transportation money. The state, with its own fiscal problems, has been cutting funds, and federal money can’t be used for about 1,000 miles of roadway in Sonoma County. It’s also clear that other possibilities—increasing the occupancy tax, forming local assessment districts, asking voters to approve Mello-Roos assessment districts, or collecting franchise fees from waste haulers—aren’t nearly enough to bridge the money gap. Since up to 50 percent of the roads are near the end of their useful life, county supervisors are considering the drastic step of letting some deteriorate to gravel. Will that have an effect on property values and tourism? Refer back to “EARTH FISSURES POSSIBLE.”

Here’s the key question: Where’s the money that’s desperately needed to repair Sonoma County’s roads? The short answer is pension costs for county employees. You can find a longer answer in local resident Ken Churchill’s analysis: “The Sonoma County Pension Crisis: How Retroactive Benefit Increases, Overly Generous Salaries and Poor Financial Management Have Destroyed the County’s Finances.” The facts are grim. County payments for pensions, pension obligation bonds and retiree health coverage soared more than 330 percent in the last 10 years. The annual cost went up more than $70 million. In 2010 alone, the county borrowed almost $300 million in pension obligation bonds. In the same timeframe, the average pay of county employees marched upward, and county supervisors approved very substantial increases in pension formulae retroactive to dates of hire. These increases were partially funded by non-retroactive increases in employee contributions while, at the same time, putting the county hugely at risk for investment losses. When pension investments tanked in 2008, the county had to pick up the tab.

In 2008, county supervisors approved an across-the-board pay increase for employees, including themselves, of $7,200 per employee, per year. This added $28 million to the annual budget for salaries. But an even greater disaster was that the increase added $70 million to the already-huge, unfunded liability of the county pension plan. The total unfunded liability, plus money borrowed under pension obligation bonds, is almost $900 million. County employees are retiring in record numbers, meaning fewer people are paying into the system even while pensions are increasing.

Further, Sonoma County supervisors did a comprehensive job of raising their own total pay and benefits packages over the last 10 years—from about $95,000 to about $245,000 each (pay and benefits). Do you wonder why (as of this writing) nine people are running for three seats as Sonoma County supervisors? Check out State Controller John Chiang’s website containing comparative pay information for county employees throughout the state. On the list, Sonoma is 16th in terms of population (493,000). But the pay of our five supervisors is higher than that in much more populated counties, including San Diego (population 3.2 million), Sacramento (1.4 million), Kern (839,000), Fresno (953,000) and Riverside (2.1 million).

What can we do about this mess? First, understand that Sonoma County supervisors have done next to nothing about the pension crisis. Many county employees are unionized, and a number of supervisors depend on labor support for their elections. The supervisors are participants in the pension plan, as are almost all of the board members for the Sonoma County Employees Retirement Association. This is an inherent conflict of interest and incentive to go slow, talk much and do next to nothing.

Second, we need to recognize that this is a nonpartisan crisis. Sonoma County voters need to elect supervisors willing to declare an immediate fiscal emergency. Salaries, including those of the supervisors, need to be rolled back. All methods of pension spiking need to be eliminated for future and current employees. There needs to be a maximum allowable pension, say $150,000 per year. The pension accruals for current employees should be reduced prospectively (as is specifically allowed under federal law for private defined benefit plans) to the levels before retroactive enhancements occurred. Defined benefit pension plans should be eliminated for new employees, replaced by a 401k plan with a fixed county contribution and no investment risk for the county. If these changes cannot be negotiated with labor unions, the county should actively outsource job functions to private industry. Voters may need to put their own pension reforms on the ballot, as is occurring elsewhere in California. The time for action is now.


 

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