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City eyes pension reform

By: Jon Brines, Placer Herald Correspondent
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A state commission, which sparked controversy last month with a report that called for an overhaul of the state pension system, accepted recommendations from concerned Rocklin residents. Now the city of Rocklin is moving forward with pension reform for city workers. “Reform is needed globally, the scope and depth of reform is yet to be determined, but the dialogue must begin,” Rocklin City Manager Rick Horst said. “And for us, it has.” Horst is forming an inter-departmental committee at the city to make recommendations. The report by the Little Hoover Commission recommended freezing current pension plans and moving employees into a 401(k)-style savings account and Social Security. It also recommends capping the maximum salary used to calculate benefits at $80,000 to $90,000, setting eligibility ages that do not encourage early retirements, and requiring that employees and employers share the costs of funding pension benefits. Councilman Scott Yuill, who has been advocating pension reform since his re-election campaign, said Horst is on the right track. “I’m well aware of the report and think it contains accurate findings affecting jurisdictions well beyond our borders,” Yuill said. “Our new city manager is eager to comprehensively review the sustainability of the city’s labor contracts as well as every other area of its expenses, and that exercise is underway.” Yuill said Rocklin’s new city manager is looking for efficiencies in all of the city’s expenditures. “Salaries and benefits are a significant part of that,” Yuill said. Yuill said potential changes to labor agreements involve contract negotiations and are subject to a variety or rules, regulations and timeliness. That could take a lot of time and care to get done. “Mr. Horst will bring his findings and suggestions to council as he completes his review,” Yuill said. The city of Rocklin was criticized for a series of pension controversies revealed in The Placer Herald last year, including alleged pension spiking involving the last city manager Carlos Urrutia and the program for rehiring retired annuitants, referred to as double dipping. Rocklin Police Chief Mark Siemens is an hourly-retired annuitant, and is allowed a maximum of 960 hours per fiscal year. He currently makes $91,334 if he works all those hours. Siemens is also making $158,101 annually through his CalPERS pension. Because he works part-time and receives his pension, his total annual compensation is $253,959. Horst said when Siemens officially retires at the end of the month, he will be the last rehired retired annuitant under his administration. “It’s not my intention to do that,” Horst said. “I understand why people were questioning that. If it’s all about balancing the budget, it is probably not a good enough reason. If people retire because they want to retire – that’s what they should do. The city should have a good succession plan. That’s something we ought to be careful with.” Concerned Rocklin residents Allison Miller and Don Perera, fed up with the controversies, wrote letters to the Little Hoover Commission. “In recent months an individual would need to have been hiding under a rock not to hear and realize that the majority of pension plans in our state and country are in serious trouble,” Miller said. Miller said supporting unsustainable pension plans will begin a downward spiral the city needs to avoid. Perera was surprised his letter and his recommendation of the 401k tiered system was included in the commission’s report. “I hope I’ve made a difference, but I’m not sure,” Perera said. He’s pleased the city is thinking about pension reform, but he’s waiting for them to act. “I’ll wait and see,” Perera said. “I see a lot of great words that never happen.”