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Grand Jury Slams Live Oak Over Pension OK

July 13, 2008

By Robert LaHue, Appeal-Democrat, Marysville, Calif.

Jul. 13–The Sutter County grand jury targeted pension increases in its latest report, but not the long-disputed pensions of county employees.

Instead, the jury scrutinized pension increases approved for Live Oak’s workers.

In the annual report released this month, the grand jury said the City Council didn’t do enough independent research into the long-term impact of pension increases and did not make a strong enough attempt to inform the public — findings disputed by the city manager.

The council in March approved an increase in the pension, from a 2.5 at 55 benefit to a 2.7 at 55, meaning employees receive 2.7 percent of their salary for every year worked and are eligible to receive full retirement at age 55.

The council approved the increase 4-1. Vice Mayor Judy Richards dissented.

“The recent, and highly publicized, pension increases enacted by Sutter County should have informed the City Council as to the significance of the issue and all the variables surrounding it,” the grand jury wrote.

“If the importance of their decision was evident to the City Council, it wasn’t evidenced by their efforts to fully inform the public or engage the citizens of Live Oak in a meaningful dialog.”

City Manager Tom Lando said the city held “two or three separate public meetings” on the pension increases, and allowed the public to speak on multiple occasions.

“The City Council deliberated over a number of sessions about an appropriate compensation package for employees,” he said.

The pension increase was requested by city employees, who aren’t represented by a union. Lando also noted staff members took the pension increase instead of a cost-of-living increase in pay.

“In terms of net impact on the city and its budget, it was better for the city and it’s what the employees wanted,” he said.

The grand jury also noted concerns about the fact-finding efforts of the City Council. Public Employees’ Retirement System actuary Richard Santos told the jury “he was disappointed that not even one question was asked of him by any member of the Live Oak City Council.”

The panel also noted testimony by Mayor Diane Hodges about her reason for supporting the pension increase.

“Her response was, ‘Staff thought it was a good idea and that’s why they’re there for,’” the grand jury wrote. “Asked if she had an independent thought as to the wisdom of the increase, she replied, ‘No.’”

The grand jury labeled Hodges’ response an admitted “rubber stamp” of the pension increases.

Hodges could not be reached for comment Friday. Lando defended Hodges and other council members as “diligent” in their deliberations about the pension increases.

“I have found the mayor to be very good about doing her homework on each issue,” Lando said.

The grand jury said it wasn’t passing judgment on whether the pension increases should have been enacted, saying its “focus is on the process that preceded the decision.”

However, the jury also noted that costs of public employee benefits “have become a significant area of concern in recent years.”

Lando said he could say “with certainty” the approval was not a rubber stamp.

“We will provide an official response to the grand jury report, but in my opinion it was well thought-out with the City Council,” he said.

Contact Appeal-Democrat reporter Robert LaHue at 749-4713 or rlahue@appealdemocrat.com

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Copyright (c) 2008, Appeal-Democrat, Marysville, Calif.

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