Nevada City, Calif. — Concerns over the financial sustainability of Nevada County’s pension system were highlighted during a crucial meeting of the Board of Supervisors this week. The discussion, spurred by a report from the County Grand Jury, questioned whether the county could continue to meet its future pension obligations without significant financial restructuring.
The Grand Jury report, which casts doubt on the county’s ability to fund pensions in the coming years, suggested that only about 68% of the necessary pension funds are currently available. This sparked a debate over the need for potential new tax measures to manage the pension shortfall, although such proposals were largely dismissed at the meeting.
Erin Mettler, Deputy CEO of Nevada County, responded to the Grand Jury’s concerns by emphasizing the county’s stable handling of its pension fund requirements. “The county consistently meets its annual pension obligations, which are prioritized during our budget process,” Mettler stated, highlighting ongoing financial management strategies aimed at maintaining pension fund solvency.
Despite these assurances, some residents expressed unease about the county’s fiscal direction, particularly in light of salary increases and growing staff numbers which could further strain pension resources. Resident Michael Taylor voiced a common concern: “With high salaries and an increasing number of county employees, how will we keep up with pension demands?”
The financial oversight discussion also touched on comparisons between county staff remuneration and state-level salaries. For example, in 2022, Nevada County CEO Alison Lehman’s total salary and benefits package reached $430,800, markedly higher than California Governor Gavin Newsom’s $290,120 for the same year.
However, County Supervisor Hardy Bullock countered arguments about rising staff numbers, noting a significant reduction in total county employment over the past decade. Bullock pointed out that the number of county employees had decreased from 1,300 in 2011 to just over 800, fitting into a broader strategy to manage long-term liabilities more effectively.
In addition to discussing staffing and salary issues, the meeting also addressed the broader implications of rising unfunded pension liabilities. Without significant changes, the county could face tough choices involving tax increases or reductions in services to balance future budgets and pension obligations.
The Grand Jury had also recommended that if a tax solution was not pursued, a comprehensive plan should be developed within six months to address the pension liabilities. Although this plan has yet to be fully implemented, county officials signaled their intention to develop strategic responses over the coming year.
Lastly, the idea of withdrawing from the California Public Employees’ Retirement System (CalPERS) was briefly considered but found to be impractical after evaluation. Supervisor Ed Scofield remarked on the complexities of such a move, underscoring the challenge of finding cost-effective alternatives to the current system.
This latest fiscal examination underscores the ongoing challenges faced by local governments in managing pension responsibilities amid fluctuating economic conditions and changing demographic pressures. The decisions made by Nevada County’s leadership in the months ahead will likely serve as critical indicators for similar communities grappling with the dilemmas of sustainable pension funding.