Calaveras County Taxpayers Association Update

On January 20, 2011, county officials met with Darrel Wilburn and Al Segalla to discuss the status of county liability regarding the CalPERS insolvency. Attending for the county was Francine Osborn , Shirley Ryan, Rebecca Callen.

The CCTA objective was to find out the extent of county liability regarding CalPERS potential insolvency. Although solutions would likely involve reform of CalPERS and public employee collective bargaining laws, our county representatives must have accurate data on the nature and extent of the problem to protect the county taxpayer.

The county officials tried to be helpful, but were not able to answer our pre-submitted questions, due to the nature of the questions, unavailability of staff time and limits of responsibility of involved officials.

However, all seemed to agree on several observations:

• Employee wages and benefits are established by state required collective bargaining. This is done in secret. 
• The system is based on defined benefit plans, rather than defined contributions.
• COLAs in retirement plans are not based on the CPI. This information is not currently available.
• The county submits required payroll information to CalPERS but does not track the cost of defined employee retirement benefits.
• Employee account records are not shared with the county – only CalPERS and the employee.
• Current required county contribution to CalPERS is 13.751% of wages. This is based on retirement fund return on investment (ROI) of 7.75 % or 3.4%which is an open question and may have been established by a “smoothing process”.
• CalPERS reports on it’s website that the current ten year average ROI is 3.4%.
• What the county liability would be if the current ROI was used was not known. 
• The Wilburn report provided an estimate of total employee expense and used an assumed 25 year employee service term. The actual service may be closer to ten years. Considering employee replacement, the net effect of that is not known.
• The public may have a copy of the county CalPERS annual Actuarial report upon written request. CCTA is requesting a copy
• CCTA is attempting to get more information from CalPERS.
• There is general agreement that there is an unfunded retirement liability. How much we are told is in the actuarial report.
• Currently the county employs approximately 415 employees covered with the Calpers program.

For full list of meetings and coverage for CCTA please visit their website at www.CalaverasTaxpayers.org

CALAVERAS COUNTY TAXPAYERS ASSOCIATION
4889 Kiva Drive
Copperopolis, CA 95228
209-785-1491alsegalla@mindspring.com
www.CalaverasTaxpayers.org