Contra Costa County Grand Jury Report No. 1104 Elected Board Membership Findings and Recommendations Finding # 1:

All city employees, including elected officials, will pay for the entire employee share of CalPERS pension contributions over a three year period from July 1, 2011 to Contra Costa County 2011‐2012 Grand Jury Report 1201 Grand Jury Reports are posted at http://www.cc-courts.org/grandjury Responding Response Comments Agency June 30, 2014. MOU’s reflecting these new terms were approved by the City Council on July 5, 2011. City of San Will not The recommendation will not be implemented because it is not Ramon implement warranted. The implication of Recommendation #5 is that the practice of paying for pension benefits is inappropriate. There is no basis in law or historical precedent to conclude that paying for pension benefits is inappropriate. Rather, it is entirely appropriate and provided for in State Law that has been in existence for decades. Payment for pension benefits is also consistent with the State pension system (CalPERS) which clearly provides for pension benefits based on elected official’s salary levels. We suggest that the recommendation could have been that board members should review the policy of paying for pension benefits periodically to insure that payments and benefits are consistent with California Government Code Section 36516(4)(D). The City appreciates the work performed by the Grand Jury and acknowledges the importance of the role served in oversight of local government activities. In the case of this report we feel the scope of the study was too narrow in that data was collected and an average was computed from which conclusions were drawn. The entire subject could have been reviewed in the context of state law, the history of elected local official compensation, and the recognition of the significant operational differences of the local agencies. Examples of operational differences between other agencies studied and San Ramon are:  73,109 population as of January 1, 2011 (Sate Department of Finance)  An outstanding major business park housing Fortune 500 corporate offices  One of only a few cities in California with an “AAA” General Credit rating.  Fifty-seven high quality parks and numerous recreation facilities including: two modern libraries, two community centers, a recently expanded and renovated senior center, two swim complexes with Olympic sized competition pools, community gardens, historical farm, performing arts theaters, and multiple community/school gymnasiums These operational differences mean that there are significant differences in the complexity of serving as an elected official. Contra Costa County 2011‐2012 Grand Jury Report 1201 Grand Jury Reports are posted at http://www.cc-courts.org/grandjury Responding Response Comments Agency Implying that all elected officials should be compensated in the same fashion ignores these differences. One of the basic conclusions of the report could have been that local agencies are in compliance with State Law which already provides for significant restrictions regarding levels of elected official’s compensation. The City of San Ramon, although a Charter City, which is exempt from the State restrictions on elected official compensation, has made sure that it voluntarily has compensation levels consistent with the amounts prescribed for General Law cities. We believe there was a missed opportunity in this report to acknowledge a very positive condition in the County, that being there are no City of Bell levels of compensation for elected officials in any local agencies. City of Walnut Implemented All city employees have the option of redirecting unused health Creek premiums into an Internal Revenue Code section 457 deferred compensation plan. As was discussed above, Walnut Creek Council members have the option of electing to have the City pay a health insurance premium equivalent to the single-party Kaiser premium (currently $457 per month). No Council member has elected this health coverage. This same redirecting option is extended to Council members. (As noted below, the Council has voluntarily limited this amount to $200 per month.) There is no long-term financial implication to the City from its employees or Council members participating in a deferred compensation plan. A deferred compensation plan is a defined contribution plan. A deferred compensation plan invests members’ contributions. Upon retirement, a member’s contributions plus investment gains or losses on the contribution are returned to the participant. There is no other liability to the employer. Pension benefits from the Public Employees Retirement System are based on a formula that utilizes the member’s compensation, years of service, and retirement age. At the salary of a Council member, the benefit level is nominal. For example, a Council member who serves 8 years on the City Council and retires at age 60 would receive a monthly benefit of $118. The demands on government revenues that contributions to defined benefit public pension plans make are a serious matter confronting California state and local government. For Contra Costa County 2011‐2012 Grand Jury Report 1201 Grand Jury Reports are posted at http://www.cc-courts.org/grandjury Responding Response Comments Agency example, attached as Exhibit B is the recent Proposal for Regional Pension Reform of the Contra Costa County Public Managers Association and the Alameda County City Managers Association. The public debate on these issues involves retirement benefits for long-serving, full-time employees. No one has suggested that nominal benefit levels paid to elected officials whose limited salary is constrained by state law is part of the contribution crises that many public agencies face. Finally, it should be noted that the Walnut Creek City Council has recognized what the Grand Jury Report characterized as “the difficult economic challenges facing local government…” In 2009, all City Council members voluntarily reduced their salaries by 10% from the amounts discussed in this report. In addition the Council members voluntarily agreed to contribute seven percent of their salary as the member contribution to the Public Employees Retirement System. The Council members also limited the monthly amount that could be deferred from the unused medical benefit into their deferred compensation account to $200. Central Contra Will not The District was included in Finding #5 in error and does not Costa Sanitary implement provide pension benefits to current or former Board members. District Ironhouse → As noted above in the response to Recommendation #1, Sanitary Ironhouse complies with this recommendation. The Ironhouse District annual budgeting process is open to the public and is publicized through public hearings noticed in accordance with the Brown Act. Ironhouse’s policy of making employer contributions for Directors under a deferred compensation plan and allowing Directors to defer additional compensation under this plan are reviewed annually at these budget meetings for the purpose of determining whether this practice continues to be appropriate. West County Implemented This recommendation has been implemented and continues to Wastewater be discussed. Two of the five Directors are not and will not District become eligible to participate in the District’s pension program. The other three are very long term members of the Board of Directors and are vested in the plan. Future Directors will not be eligible for District pension benefits. Contra Costa County 2011‐2012 Grand Jury Report 1201 Grand Jury Reports are posted at http://www.cc-courts.org/grandjury