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June 2012 Edition

The Case for Statewide Reform of County Pension Funds

The Time to Act is NOW!

VI. The Opportunity: Make County Reform Happen and Ignite Statewide Reform

We know that all 20 CERL County Retirement Systems are intensively engaged in the IRS Voluntary Correction Program. Their counties are also deeply involved in preparing actions to respond to the IRS results including amendments to the County Employees Retirement Law. Labor unions are involved – retiree organizations are involved.

One key group is missing - citizen reformers. We are not at the table - we are not preparing for the opportunity that CERL is almost certainly going to be "open for change".

CERL and county ordinances will be amended but the window will probably be short. Citizen reformers are volunteers swamped by very complicated problems. Today’s small local groups don’t have the resources to have much impact. Without reform of CERL local groups can’t get enough done. But local reform groups have no voice in Sacramento. The best opportunity today to organize “grass-roots” local and statewide pension reform is about to be missed.

The IRS is likely to expose egregious violations that will increase public discontent. Financial reporting reforms will produce shocking results. The passage of reform initiatives in two major cities would greatly increase interest. The worsening state budget and appeal for more taxes will cause many citizens to conclude unfunded pensions are driving much of the crisis.

Most county retirement systems are in trouble. They are much easier for citizens to understand than big statewide systems. This is crucial! There are citizen reform groups in several CERL counties. It’s easier to organize within a county than statewide. Substantial funds are available to support credible statewide reform efforts that can have significant impact. Substantial “economies of scale” can be achieved by growing reform groups in these 21 counties and melding them into an organization that can impact Sacramento.

We need reform groups to significantly expand within these 21 counties. They need to be brought together to create a common vision for goals, strategy and resources. Representatives from these groups need to dive into the Sacramento game to drive reform into CERL . This can be the nucleus of a statewide pension reform organized from the ground up. It needs to be happening by the end of this summer.

 

Bay Area Pension Reform Leaders Meeting

A group of citizen pension reform leaders from five of the six Bay Area – North Coast “CERL” counties met in Marin County May 22. These included Alameda, Contra Costa, Marin, Mendocino and Sonoma counties. San Mateo pension reformers weren’t able to make the meeting. The main agenda item was to answer the question “Should a Citizen’s CERL County Reform Organization be formed?” This was a very “high level” discussion. It would be impossible to properly define much about the organization in the first meeting. But long story short – the answer is "Yes". This group of experienced reform leaders at the local county levels believe a larger association of reformers needs to be organized.

The next step is to develop a “Statement of Unity Principles” – fundamental understandings and agreements upon which a statewide CERL County reform organization can be developed. As a model we looked at the “Unity Principles” that were adopted a year ago in Mendocino County for the “Coalition for Government Financial Accountability” ( click for a copy). One of the two organizations defined in this document – a tax exempt-deductible “Education Fund” – has been organized. The larger citizens’ reform group is being organized at this time.

We offered our Mendocino Unity Principles as a model – not necessarily as a proposal. However, we’ve thought long and hard about what our problems really are and believe many of our Unity Principles deserve serious consideration by a broader group of pension reformers across the state.

The Bay Area – North Coast group will meet again this month to work on the draft Unity Principles. We're thinking of asking fellow reformers in the Central Valley and Southern California to put together meetings of reform leaders from their CERL counties in mid-to-late summer to discuss this opportunity.

It’s a long road from where we are to real statewide reform. But – that just means it’s time to get started. It’s time to start a good-government reform parade – tens of thousands of citizens are ready to join.

If you’d like to know more about our efforts to organize a statewide association of CERL County citizen reformers please email me at
JohnD@YourPublicMoney.com
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