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Rick Roeder       August 2014

On August 4, Judge Kent Kellegrew made a tentative ruling that two provisions of state law would be violated if a pension reform measure for Ventura County, spearheaded by the Ventura County Taxpayers’ Association, was allowed to be on the Countys’ November ballot. The Judge interpreted the scope of the law to only allow withdrawal to come from the Legislature. His second reason related to the nature of the reform. He interprets state law to require a pension plan for each of the 20 adopting Counties. His reading that for a withdrawal to occur, the County itself would have to initiate legislation and have such action be backed by a majority of plan participants.

The proposal would have initiated a 401(k)–style defined contribution plan for employees which would have resulted in considerable savings to the County. Kellegrew opined that a defined contribution plan did not satisfy the definition of a pension plan. Would the backers of the proposal have had a better chance of success if the ruling were made by a Court outside Ventura County? We may never know as its backers have announced they will not move forward in light of the ruling.

The Kellegrew decision is the year’s second major development in the fight to retain the status quo for public employees after the Legislature’s 2012 passage of PEPRA. Earlier this year, advocates of a statewide pension reform initiative, led by San Jose Mayor Chuck Reed, felt stymied by the accompanying verbiage in the proposed ballot initiative written by Attorney General Kamala Harris. The proponents of the initiative felt that there was little chance of passage given their view that the summary language drafted by Harris was so stilted.

The reform movement, marked by passed ballot measures in the Cities of San Diego and San Jose, appears to have stalled. PEPRA’s passage likely helped slow the movement. My police contacts in both San Jose and San Diego are decrying the impact on police forces due to the passage of reform measures. In San Diego, angst pervades even though the police are the only group left with a defined benefit plan for new hires. Police staff are worried that the 5–year freeze on pensionable pay, currently in place, will continue the exodus of police who have left for greener pastures. Having one of your police academy graduates leave is financially painful. In San Diego, training costs are estimated to be $190,000 per a successful academy candidate.

Such reality means that any further reform, to be successful, may need to occur on a statewide level. The news from San Diego and San Jose may indicate that the local availability of attractive job alternatives undermines a locality–by–locality approach to reform.

Right now, recent developments indicate that Blondie’s “The Tide Is High” certainly does not apply to added reform. The Righteous Brothers’ “Ebb Tide” appears to be closer to the target.

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