Submitted by Ken Churchill, pension reform advocate
While federal aid and a rebounding stock market have temporarily provided a band-aid to local public agencies struggling with increased pension costs, it is critical to recognize the long-term risk that mounting unfunded liabilities present to local governments. Particularly, in Sonoma County. Instead of taking steps to address rising pension costs, some local agencies seem to be going backwards on this issue. Sonoma County Health Services and Coastal Valleys EMS Agency are looking at a dangerous new model that would increase pension obligations by pushing out private ambulance providers.
According to 2020 figures, Sonoma County’s pension system has $282,715,000 in unfunded liabilities and $321,415,000 in outstanding pension obligation bond debt. Yet even with this debt weighing down the County, County leaders aren’t stopping their push for more.
In 2003, Sonoma enhanced its pension benefits so that government workers could retire earlier with a higher pension accrual rate (implementation was phased in until 2005 and 2006). Instead of an annual benefit accrual rate of 2% per year of service, public employees saw an increase to 3%. Though this increase might sound minimal, they increased the value retroactively for all past years of service without setting additional money aside to fill the gaps. Taking these enhancements into account, pension obligations have cost Sonoma County taxpayers more than $1 billion in the past 15 years. Yearly pension costs grew from $35 million in 2003 to roughly $122 million in 2020. Not only are the growing pensions hurting taxpayer wallets, but soon they may negatively affect our community emergency services.
Because of the rising pension obligations, localities are sourcing new funds by trying to shift private ambulance services to the local fire departments. Keep in mind, California originally relied on countywide-run ambulance systems overseen by an EMS Agency to ensure there was no disparity in coverage. This ensured rural regions that could not afford a fire department-run ambulance system would receive the same level of care from a private provider. This long-standing model has worked for almost 50 years, but is now being challenged as localities look for more sources of revenue.
A recent commentary by Reason Foundation identified fire departments in Sonoma County and elsewhere in California that are moving towards an “Alliance Model,” where a fire department is given, “the decision-making power of a full EMS agency, but without the oversight of an EMS agency.” This essentially involves fire departments taking over emergency services and jeopardizing the necessary competition of the ambulance services contractual bidding process.
In the short term, fire departments receive more revenue from ambulance charges. In the long term, pension costs increase as there are more public employees on the payroll.
Sonoma County Health Services and Coastal Valleys EMS Agency are currently in the process of selecting new service providers for Emergency Advanced Life Support Ground Ambulance Services. Throughout the RFP, there seems to be blatant favoritism for the local fire department. The RFP specifically exempts the fire department and its subcontractor from demonstrating any experience running an emergency ambulance system. How is this in the public’s best interest? I’d like to think our tax dollars are securing the most qualified, experienced professionals for the job.
Our local governments should be focusing on the quality of care rather than padding pensions. As Sonoma County Health Services and the Coastal Valleys EMS Agency finalize their RFP, I hope they reconsider some of their biased requests. Private ambulance providers are a fiscally responsible solution that puts the best interests of patients first.
Sonoma County should always strive to be a leader, but not when it comes to soaring pensions.
Ken Churchill is a long time Sonoma County pension reform advocate, having founded the advocacy group New Sonoma, which exposed illegal pension increases in Sonoma County.
The views and opinions expressed herein are those of the author and do not necessarily reflect the views of PublicCEO, Tripepi Smith & Associates or its employees.
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