Sheriff Carona, my boss, enjoys making me attend board hearings every once in awhile. He thinks it's painful penance for sins he believes I've committed in the past. I think it's torture and should be ruled unconstitutional. Perhaps staff members over at the board offices could look into the issue.
Which leads us to today's OC Board of Supervisor hearing."Enjoying the distraction of staff time," as Supervisor Moorlach wrote to John & Ken last week, Sheriff's staff met Saturday afternoon to discuss the pension issue and begin composing remarks for the Sheriff to address the board.
In speaking with the Sheriff, he told us how he had heard from many people who support the immediate rescission of deputy pensions. These individuals informed the Sheriff that he should stay out of this issue - that it was an issue between the board and the unions - and he should not get involved.
Certainly, from a political vantage point, they are probably correct. However, in speaking to the Sheriff, it became crystal clear that this is not a political issue to him – it is an issue of being faithful to your word and being true to the promises you’ve made in good faith. So, naturally, I was apprehensive about writing a speech for him. I’ve been down this road before.
We can write a great speech full of pension details and background and issues, which we did, and we can discuss it with the Sheriff and the Command Staff, which we did, and we can hand it over to the Sheriff, which we did. But will he use it?
The Sheriff did use the speech. During the board hearing, he turned the speech over and used the back to jot down his notes. I’ve been down this road before. It’s a speech from the heart, and you just can’t write it for him.
Thankfully, we have a staff member who just happens to be enrolled in court reporting school.
So here’s Sheriff Carona’s speech, as transcribed in our office:
First of all, thank you very much for allowing me to come up and spend a few minutes on this. I have to tell you, though, this has been a disturbing and annoying process for me.
As an elected department head, I'm even more frustrated today listening to the presentations that this has been going on and gestating for a period of some six-seven months that the board members have been involved with this and that in fact this has been an issue that Supervisor Moorlach has tasked one of his staff members to analyze, and yet as an elected department head, the Sheriff of Orange County, who has the vast majority of the people to be affected by the research that's been done on this is -- -- the first time I heard about it was on July 17 when I was asked to attend a meeting with my Undersheriff, with Supervisor Moorlach and his chief of staff Mr. Mainero. During that meeting, pretty much what you heard today was laid out to me as the Constitutional problems the infirmities that existed with respect to the 3 percent at 50 contract and the benefits that were given to deputy sheriffs and, by the way, also to members of Orange County District Attorney’s office, the investigators that work there. I was asked to hold that in confidence because of the cataclysmic nature of what could be proposed, and Supervisor Moorlach and Mr. Mainero both spent a great deal of time telling me that they wanted me to keep that confidential because they were still working through this, and they wanted to see if there were any other options that were available other than dropping what was described as a nuclear bomb on the county employees and specifically the Association of Orange County Deputy Sheriffs. I honored that request.
Unfortunately, three days later on July the 20th, I watched on television and then got to see in the newspaper exactly what Mr. Moorlach and Mr. Mainero had planned for the Board of Supervisors and where this was going. Yet I was never advised of that. I had nothing in writing. While I maintained the confidentiality, my employees read about it in the newspaper, heard about it in the newspaper, and were wondering why the Sheriff had not informed them, and I want them to understand today because the Sheriff didn't know. Now, as I listen to this debate, I'm still unclear even after the presentations today if we're talking about a legal issue, a Constitutional issue, or if we're talking about a mathematical issue, whether or not this was paid for, and how it was paid for. So far, the Board of Supervisors has been told there's only one way to resolve this issue, and that is by declaring a Constitutional infirmity, by declaring this illegal, by going to court, and seeking declarable relief and getting an injunction. That is the most Draconian of any of the options that I can think of.
Now, granted, I'm not a lawyer and I'm not an actuarial, but I do have responsibility for forty-two hundred men and women of the Sheriff's Department, and I take very seriously the concerns of their lives and what they do. What you're suggesting is, because you don't know whether or not you have the right to do what a former Board has done, is to impact the salaries of those people who retired in good faith and in reliance on a decision that was made by the Board of Supervisors by some 33%. You tell them overnight we're going to take that money from you, and we're going to put it into an escrow account, because we're not sure, and until this is litigated, we're not going to give you the money back. If it is, we'll give you the money back. And if it isn’t, we are going to keep it. That is the most Draconian of all the options.
Let me give you some insight as to how 3 percent at 50 came about, because unlike the members of this Board, I was there when these discussions took place. 3 percent at 50 was not something that was given to AOCDS or to the members of the Sheriff's Department and the D.A.’s office. It's not something I gave away. It was something that was negotiated between the Board of Supervisors and The Association of Deputy Sheriffs. That was allowed to happen because the State of California passed a piece of legislation that allowed the 3 percent at 50 be enacted in cities and counties. It was permissible. You didn't have to go down that path. In fact, Orange County was one of the last counties in California to adopt 3 percent at 50.
Why did counties and cities put that into play? Well, it's the same reason you give pay raises to people. You want to have good salaries and benefits for employees to be able to attract them. This is one of the most expensive areas in America to live. You want to have competitive salaries so you get the best people. Orange County recognized that. They looked all around us, and people were going to 3 percent at 50. We were losing people from the Sheriff's Department, the D.A.'s office going to other counties and other municipalities. We wanted to be competitive. So the Board of Supervisors, through the C.E.O., reopened negotiations with the Deputy Sheriffs, and they negotiated 3 percent at 50. Now, I keep hearing about this retroactive portion of it or how this was not paid for. After I left my meeting with Supervisor Moorlach and Mr. Mainero, I had my staff pull together all of the data that I had in my office, the notes that were reflective of the discussions that took place with the then Board of Supervisors and the then C.E.O., and I had I concern.
With all due respect to the Board Members, I'm the one that has to manage my budget. So when we were looking at 3 percent at 50, there was a cost associated with it--some $21 million. We identified by name the number of individuals that were going to be--could be affected by this and that might retire, prospectively the number of people that we'd be dealing with and there was an unfunded liability, a nut that we had to crack. The money was put into that account for 3 percent at 50 by the County, by our contract partners, by the Deputy Sheriff's. They realized there was a shortfall, and the only way for us to get there to make this happen was that they were going to have to take an increase in their overall contribution to the retirement account to make this happen. And, by the way, to use Mr. Mainero’s analogy, he's absolutely correct. The Deputy Sheriff, on June 27th of 2002, would have gotten 2 percent at 50. And on the 28th, if he retired, or she retired, they'd have gotten 75 percent, 3 percent at 50. But that individual at 27 didn’t get anything retroactive. In fact, everybody who retired on 2 percent at 50 got no enhancements. That what's they agreed upon. When they were working, that’s what the package was. It wasn't until after it was approved that they got the increase. Mr. Mainero and Supervisor Moorlach state that OCEA did it the right way. Well, at least we know we have a model out there for how it should be done in doing benefit enhancement at 2.7 percent at 55. Guess what? If an OCEA employee retired on June 27th of 2005, they would have gotten 1.6 percent. If he had retired on June 28th of 2005, when you passed the 2.7 percent at 55, they would have gotten 2.7 percent. Why does that happen? It's the same way that all retirement funds are handled throughout the State of California. You look at the total amount of money that it's going to take to pay not only for those people prospectively but for people that are going to retire. We did that with 3 percent at 50. You did that with 2.7 percent at 55. And now I get to Mr. Mainero’s argument. If this is a Constitutional issue, and I'm not I lawyer so I have no idea, then it's going to have broad application to all retirement programs that have been enhanced. 3 percent at 50 is not here just in Orange County. It's throughout the state of California. So if it's a Constitutional crisis, then this is much broader than just the Association of Deputy Sheriffs.
If, in fact, it's not a Constitutional crisis, and you can correct that by the way the contributions were put into the program as evidenced by the fact we had comfort with the way OCEA did it, then why don't we take a look at the analysis of how 3 percent at 50 came into play. I've got all those documents. The CEO’s probably got those documents. I know County Counsel was at the table through all those discussions. Let's see, in fact, whether or not there was -- all the money was put in there and that it was done right, and then you don't have a Constitutional crisis, you don't have to spend money on the lawyers.
You're being told there's only one option. Let me suggest--here's a couple others to you. I would suggest you work with the affected employee unions, the C.E.O., County Counsel to review past actions and determine what took place during 3 percent at 50 and if structural change is needed, work comparatively and cooperatively to resolve those issues.
Number two, hire forensic accounting and actuarial experts to work with the Orange County Employees Retirement System, the C.E.O., AOCDS to determine the accuracy of the cost estimated, the amounts funded, when 3 percent at 50 was enacted and also the prospective costs associated with that. Conduct a detailed analysis to determine what agreements were made and how they were paid for by the Sheriff, by the County, and by the employees. Direct the C.E.O.'s office to report back on the status of these actions with a recommendation to resolve the concerns that reflects the Board's desire for a legal and financially responsible solution to what may or may not be a problem.
Number five, use this analysis to rectify the agreement, if necessary. Deputy Sheriffs have been in negotiations for fifteen months. For nine months, they've been -- they have been working without a contract. You can't tell me that you've been looking at this for six to seven months, and if it's an issue that needs to be negotiated, that you wouldn’t put it on the table for them for negotiation. If, in fact, there's a problem with the way the contract was structured, you, ladies and gentlemen, have an opportunity to talk with deputy sheriffs in negotiations and resolve that.
And finally, if no resolution can be attained, if, in fact, what has been proposed to you in terms of the Constitutional infirmities and the way this was funded, made it illegal, then you can go to court. That should be your last option.
Why you are jumping to a point where you're going to create this nuclear war between a group of retirees who retired in good faith, current employees who are looking at this Board and wondering, do you value them as employees, and you haven't gone through any of the other options other than the most Draconian, I think speaks volumes to the employees of this county.
I would ask you to use measured steps, use your wisdom and your leadership that you employed throughout leading this county, and do the right thing. You have some time between now and September the 11th to get the analysis to get the facts before you go to guns and attack employees of this county. Thank you for letting me speak.