Problem Statement

 

The efforts of The Red Brennan Group arise from the fundamental principle that the government of San Bernardino County should be by and for the citizens of the County. However, the size of the County government and the compensation of its employees have expanded beyond the County’s need, and far above the income of ordinary citizens. Our government employees have become a privileged elite while ordinary citizens pay higher taxes, higher fees for services, and face the prospect of a massive debt shortfall. Resolution of these challenges begins at the top – with County leadership.

The Leadership Problem

 

The Non-Elected Position of County CEO

 

In November 2010, the Board of Supervisors created by ordinance, without voter approval, the non-elected position of County Chief Executive Officer. The powers and authority assigned to this position far exceeded that of the former County Administrative Officer position. This action reduced the Board of Supervisors own scope of authority. As part of the implementing ordinance, the Board included a non-interference clause, limiting the Board’s ability to act on behalf of their constituents. This action was in direct violation of the San Bernardino County Charter which states:

The Chairman of the Board of Supervisors shall be the general executive agent of the Board. It shall be his duty, subject to regulation and control by the Board, to exercise general supervision over the official conduct of all County officers and officers of all districts and other subdivisions of the County charged with the assessment, collection, safekeeping, management, or disbursement of public revenue; also over all County institutions, buildings and property….

Since establishing the Chief Executive Officer position, the Board of Supervisors has met in open meetings an average of 30 times per year. This is 12 fewer times per year than stipulated by the County Code. Yet the elected leadership of the County continues to earn a very generous full-time compensation package.

 

As of October 2020, the Board of Supervisors elected Leonard X. Hernandez as the new Chief Executive Officer, moving Gary McBride (former CEO) to Strategic Projects Director (in charge of managing COVID-19). In 2020, McBride earned a total of $679,376.02 in total pay and benefits. During the COVID-19 pandemic many counties decreased the pay of their executive officials but San Bernardino added entire positions and barely decreased the salaries of their officials (~1%). The latest information for CEO Leonard X. Hernandez shows an increase in his total pay and benefits from $432,002.23 in 2020 to $541,582.365 in 2021.

 

The question is: does the County really need an entire position dedicated to COVID-19, a CEO and 5 supervisors? San Bernardino County taxpayers pay over $2 million for the compensation of its elected leadership, CEO, and Strategic Projects Director. What are the citizens receiving in return? Should the CEO be overseeing the salaries of the supervisors, who are in turn, setting the CEO’s salary?

The Budget Problem

 

When the supervisors implemented the office of Chief Executive Officer, a significant amount of their authority and responsibility was delegated to this unelected position. Was this change in the County’s governing structure a good decision? How has this affected citizens of the county?

  • Between 2007 and 2022, the county budget more than tripled from $2.3 billion to $7.85 billion. Cumulative inflation over the same period was only 30%, meaning the county budget has increased 8.2 times the rate of inflation.
  • Each of the 2.2 million citizens of San Bernardino shelled out $1,249 in wages and benefits to county employees in 2022.
  • The average full-time county employee makes $89,493, or 3.3 times higher than the average citizen. In other words, for every $1.00 the average citizen makes, a county employee makes $3.30.
  • San Bernardino has some of the highest pensions in the state with an average of $95,800 per year for a full-career retiree. Additionally, unlike other pension systems where the typical retirement age is 65, public employees in San Bernardino can retire as young as 50 years old. With an average life expectancy of 32 additional years, that yields over $3 million dollars paid out to each pensioner. Compare that to a private citizen’s average retirement savings of $34,693 per year[1] (or $1.1 million cumulatively over 32 years) and it is immediately clear that fiscal policy in the County is egregiously slanted against ordinary citizens.
  • In FY 2021/2022, total pension contributions as a percentage of tax revenues are 55%. In other words, for every $10 the county collected in tax revenues, more than half ($5.5) funded retirement for county workers.
  • The county spent more than $122 million on overtime in 2020 through a nefarious, but permitted practice known as time trading. This comes out to an additional $5,058 in yearly income for each public employee.
  • Tax based revenue increased by 106%, while fee based revenue increased 257%.

It appears the County’s budget is now managed on behalf of the County’s employees and pensioners, rather than the citizens of the county. Bureaucracies have little incentive for efficiency. By nature they will expand in size and scope while mishandling responsibilities. A primary duty of an elected official is to represent the people by placing a firm hand on the reins of government spending. San Bernardino County elected officials have not fulfilled this duty. They appear to have handed over responsibility of budgetary discipline to unelected bureaucrats.

The Pension Problem

 

The coming financial tsunami that is the San Bernardino public employee pension is an example of how the County desperately needs active, engaged leadership that is fearlessly working to solve problems for its citizens.

 

It is well known that public employee retirement funds in California are underfunded and on extremely shaky financial footing. A Stanford economist, Joe Nation, estimates the total liability of all public employee pensions systems in California is $970 billion dollars. By the same measure, the San Bernardino County Employees’ Retirement Association (SBCERA) pension fund, as of 2019, was underfunded by 53% or $11.9 billion dollars. The San Bernardino County Employees’ Retirement Association’s (SBCERA) financial statements present that same liability at only $2.7 billion. Pension Tracker uses a conservative 3.25% rate of return in its assumptions while SBCERA projects an optimistic 7.25% return every year.

 

By law, citizens of the County are on the hook to make up the difference. Even if vital services must be drastically cut or eliminated to pay the bill. As future pension payments come due, this growing liability will consume the entire county budget. As mentioned above, in FY 2021/2022, $5.5 out of every $10 in taxes went to fund pension obligations. This leaves less than half of their tax revenue to fund general services within the county.

 

While there are many causes for the public pension fiasco, the root cause is the co-dependent relationship between elected officials and public employee unions. Candidates for office are dependent on the political and financial support from unions to get elected. Once in office, elected officials sit down at the bargaining table to negotiate pay and benefits with the public unions that brought them into office. A clear conflict of interest.

Measure K vs Measure J

 

The elected leadership of the County continues to disregard the will and votes of its citizens. The most recent examples of this are Measure K, Measure J and AB-428.

 

Measure K was an initiative placed on the 2020 ballot by 70,000 concerned citizens meant to alter term limits for the office of County Supervisor from three consecutive terms to one and establish a maximum compensation of each County Supervisor of $5,000 per month, including salary and benefits. Measure K also stipulated that these compensation provisions cannot be changed except by a vote of the people at the time of a general election.

 

In response, the supervisors placed a conflicting measure on the ballot.

 

Measure J was voted on by the 5 county supervisors and designed to disrupt Measure K’s grassroots effort. Presented as a “modernization of the County Charter”, voters thought they were voting for: removal of sexist language, the closing of political loopholes, putting a stop to future Governors meddling in local matters, increasing transparency and accountability of local government and limiting Supervisors to three terms. However the underlying purpose of Measure J was to leave term limits essentially unchanged, allow supervisors to increase their current salary, remove the stipulation in the current charter that requires a vote by the people to change supervisor salary and benefits (allowing them to set their own compensation), and make an end run around state law and legal precedent to restrict the people’s right to vote through an initiative or referendum.

 

The results of the November 2020 election were as follows:

Measure K was approved by 66.84% votes (more than two-thirds)

Measure J was barely approved with 50.72% votes

Since the two competing measures passed, Article II Section 10 of the California Constitution states: “If provisions of two or more measures approved at the same election conflict, the provisions of the measure receiving the highest number of affirmative votes shall prevail.”

 

Measure K received the largest vote ever, for a charter amendment in San Bernardino County. Because Measure K received more votes than Measure J, Measure K should have been legally implemented immediately, while Measure J should not have been given any effect.

 

However, The Board of Supervisors responded by suing to overturn Measure K. Obviously acting to protect their own self-interests, and clearly going against the vote of the people. Before the results of the election were even certified, the Board requested an injunction to halt Measure K. Superior Court Judge Donald R. Alvarez granted a temporary restraining order and then on August 31, 2021 he ruled Measure K unconstitutional and blocked it from enforcement.

 

Additionally, on February 2, 2021, California Assembly Member, Chad Mayes submitted AB-428just two months after San Bernardino County voters approved Measure K. It should be noted that Mr. Mayes once served as Chief of Staff for Janice Rutherford, the current Supervisor for San Bernardino County District Two.

 

AB-428 is legislation that stipulates that voters may not set less than two, four-year terms for county supervisors. This law also includes the board of supervisors in the definition of county officer for whom the board is required to prescribe compensation. In other words, elected members of a county’s board of supervisors set their own compensation! Mayes argued the legislation was a “good governance” policy issue and was not an attack on Measure K. On the floor of the Assembly, Mayes stated that AB-428 did not directly affect Measure K. It’s apparent to us that AB-428 is a direct workaround for Measure K. AB-428 looks to ensure that citizens can never again (by initiative) set compensation or terms for their County Supervisors. AB-428 was signed into law by Governor Newsom on October 4, 2021.

The Solution

 

Generally, there are two preferred solutions to an ever-expanding bureaucracy. First is to reduce, restrict or remove the bureaucratic system’s access to resources. The second is to alter the incentives to govern. Via political pressure, candidate support, initiatives, referendums or recall, The Red Brennan Group is constantly pursuing actions and initiatives with these solutions in mind.

 

 


Referenced Source:
[1] https://www.coventrydirect.com/blog/retirement-income-by-state/

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