Bill Campbell On The Labor Pact Vote

This just came over the transom from Supervisor Bill Campbell's office:

Board Of Supervisors Votes Unanimously To Reduce Unfunded Liability For County's Retiree Medical Plan

Santa Ana, CA – Supervisor Bill Campbell, Chairman of the Orange County Board of Supervisors, issued the following statement today regarding the Board’s vote to reduce the unfunded liability for the County's retiree medical plan:

“Today, the Orange County Board of Supervisors unanimously approved a comprehensive amendment to the current contract for 13,000 County employees represented by the Orange County Employees Association (OCEA) and the Service Employees International Union (SEIU). 

By voting to reduce retiree medical benefits for active and retired employees, the Board has taken the first step in reducing the unfunded liability for the County's retiree medical plan by $815 million.

Along with approving an increase in pay for County employees, the Board voted to have additional deductions made from employee paychecks in order to pay for pension benefits. This means that County employees will now have between 11 to 18% deducted from every paycheck to pay for pension benefits.

I voted to support these changes because the eventual $815 million reduction in the County's unfunded medical retiree benefits will significantly enhance the County's long term financial position.  This is a tremendous achievement for Orange County taxpayers.”

Comments

[Good for Taxpayers..bad for old people.]

This is easy for big Bill to say because when he needs an operation he just sells a Taco Bell but what about the retired County employees who are not so lucky?

None of the Supervisors liked making this vote, but all of them made the difficult decision instead of slapping another band-aid on and leaving the problem for future Supervisors. Agree or not with the decision, it was made honestly and with consideration of all the competing interests.

Let's see if the supervisors have the courage to deal with the giveaways that they gave to the public safety employees.

One of the dumbest things that anybody can claim is that the Supervisor should get credit for fixing something that they created.

How smart is it to get soon to be retirees the opportunity to retire the next year with enhanced benefits that they never contributed to?

What were they thinking?

[Strategery]

The reality with this deal is that if it wasn't made now, the situation for the retirees would only get worse and require more drastic measures. Feel a pinch now or a wallop later.

In typical fashion, Mauk, Diana "Ambrosia" Garcia, and the rest of the CEO brain trust failed to dot the i's and cross the t's.

First, there is no language regarding the methodology for determining the "costs" of 2.7% @ 55 on an annual basis. This is one of the reasons that Norby and Chuck Smith balked at the original proposal. We can be sure in the coming years there will be a significant disagreement over the "cost" of the benefit. In solidarity, Nick will hire a gun to discredit the County's good faith annual estimate of the cost of this benefit. The war will be on. The AIT states this action does "Reaffirm the full and continuing funding by employee contributions of the annual cost of 2.7@55 retirement program." My point is what determines the annual cost of 2.7%@55?

Second, where is the trust fund that should have been created to house savings and excess contributions in positive years and draw down on in lean years? For example, the County stipulated that the health care savings were some $14 million over the original estimated cost. The County estimated the additional annual cost of the 2.7% benefit to be some $10 million or 1.45% of total salary & employee benefits. Based on a reasonable approach, the County agreed that the healthcare savings should be used to offset the extra cost of the enhanced benefit, since it is the employees that essentially pick up a significant portion of their health benefits in exchange for the retroactive retirement enhancement. Fair enough. But, why not place the balance of the savings ($14 -10+ million) into a trust for the next rainy day?

Lastly (for now), why didn't the County think ahead and look prospectively at a healthcare pool that consisted of only retirees, bring in some of the more astute retirees and work to develop plans and approaches that would minimize the increased costs to the existing retirees? For example, think outside the box at ways of reducing the costs of providing retiree medical? Instead, the answer was we don't know what this is going to mean out of the pocket of the existing retirees and we don't know what you can tell them other than it might hurt but we are not sure how bad.

I guess what I am saying is that in politics you ALWAYS make an attempt to VEST seniors, veterans, retirees, the disabled, etc. along the way. No attempt was made here but the Board said today that it intends to do so from here on out. The Board had to bail itself out rather than having a good staff that anticipates these issues and prepares for it in advance.

Moving forward, it is incumbent on the County to revisit the manner by which it negotiates against itself on labor contracts. This is the first time the Board drove a hard bargain AFTER the County negotiator stated that she would not go back and "renege" on her agreement. The deal stalled, the unions barked then whimpered and finally, the deal was struck and balance was achieved. Contract your labor negotiations out and move them away from HR and away from union seduction.

Also, to save the taxpayers even more, pull back the administration of the deputy sheriff's health benefits from the union ($14 million) and put the deputies in the health pool with the lion share of county workers. This will drive down the County's cost of providing healthcare even further (maybe even place the savings in the trust if your feeling magnanimous) and won't have any affect on the deputy's benefits. Also, the County will have greater accountability over the funds if they are taken away from the AOCDS.

It is time to stop the fruits of Labor being paid for by the taxpayers' loom!