Petaluma city manager has more work to do
John Brown has spent more than 10 years as Petaluma’s city manager, implementing policies and handling many of the day-to-day activities that help the city function.
By the time his contract ends in 2022, it will be the longest public service position he’s held in his 35 years working in government.
The Southern California native sat down with the Argus-Courier last week to reflect on the past decade, how the city is managing the pension crisis, and his approach to presenting controversial projects.
Here are the highlights of the interview.
Q: Looking back at your 10 years on the job, are there things you would’ve liked to have accomplished that might indicate your plans going forward?
Brown: “Well gosh, I would’ve liked to have been able to fix the roads primarily. When I got here, I felt like I had a pretty healthy budget … it looked like there was a $9 million reserve (in the general fund). When I got here, the council was very concerned about the quality and conditions of the roads. I’m thinking to myself, ‘Well, come on. Spend a little money out of the reserve.’ That’s a way to take care of some of this problem. And almost immediately we were into the recession, so that quickly went by the wayside.
So yeah, I would have loved to be able to do more with the roads than we have. For what we’ve had available to us and the way we’ve really had to rely on grant funding to try to make that happen over the years, and the weirdness that comes along with being able to qualify a particular piece of road for a grant … we’ve been able to do a few of the collectors over the years and stay up with it.
Probably what I’ve mainly accomplished since I’ve been here is to keep the place financially solvent, to rebuild the reserves from them having been drained down literally to nothing. We had a year, 2010-11, where we were showing $5,000 in reserves against a $32 million general fund budget. It was just a paper reserve, right? That’s less than a margin of error.
So we were able to rebuild that back up to now. When I tell you I have $9 million in the bank it’s actually more than that. But when I have $4.2 million that’s available for emergencies, that’s the most this city has had in my recollection – and when I say that I mean beyond me, back before me when I looked at finances coming into my administration.”
Q: How has the city been dealing with the constant issue of rising pension costs?
Brown: “We’ve done a number of things along the way … So the city started in a better situation than a lot of cities because our employees have always had to pay the employee share … and a lot of communities – communities that I’ve worked for before – they would pay your share. So that was equal to 7 percent of your salary and that much more the city was paying.
The city did enhance public safety back in ‘90s to get to the 3 percent (contribution), and the thinking on that was the state law enforcement went to the 3-percent program, and local law enforcement agencies were all concerned that they wouldn’t be able to recruit good employees. They would go to the state unless they were on an even playing field. Over time, local agencies all went to the 3 percent, and that’s really what’s driving the liability problem going forward, is that it’s a pretty rich program.
So as cities went to the 3 percent on the safety side, other cities went to the enhancements for their miscellaneous (employees). Some went to a 3 (percent) at 60 (years old). Some went to a 2.7 at 55. Some went to a two-and-a-half at 55. We’re at a baseline 2 here so we didn’t enhance. That’s been helpful in the run up to these rates.
The rates have gone up because PERS (California Public Employees’ Retirement System) had some bad investments in the recession that they’re trying to recover on distribution on forward rates. They went through an actuarial study to determine we’re all living longer so we’re all going to be collecting pensions longer, so they factored that into the formula and rates went up again. Then they have what they call an assumed rate of return which is we’re putting our PERS money, $3 billion being invested in PERS rate and PERS investments, and they were assuming a 7.5 percent rate of return on that. On good years they’ve exceeded that quite a bit. On bad years it was around one-point-something or 2 … so those three things together are what’s really driving this steep rate adjustment.
We went in 2012 to a second tier of negotiating … that saves a fair amount. Anyone who comes in after that, who has never been in PERS before or is lateraling over from another agency comes in at that rate. That saves money on the go-forward.
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