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Marin County Pension Fairness

Unlawfully Granted Pension Increases Are Draining Billions of Dollars From the California Economy Every Year. Please Help.

My name is David Brown. I live in Mill Valley, California. Like you, I am an ordinary taxpayer. California is buried under a mountain of debt accumulated to pay for extremely generous pensions for public employees, pensions that are far in excess of what the majority of people paying for them have set aside for their own retirement. We are at a tipping point. Payments for these pensions are already beginning to constrain the provision of basic government services. 

Help Me Raise Two Hundred Thousand Dollars to Fight Unlawfully Granted Pensions in Marin County and the rest of California: 

In 1977 the California Legislature enacted section 7507 of the Government Code. Its purpose, as stated in a letter from the bill’s sponsor, Senator Russell Newton, to then-governor Brown, was to prevent, “ ‘permissive’ legislation with the final result being that local government approves employee retirement benefit increases without taxpayers ever knowing the real cost.” 

Section 7507 as it existed from 1999 to 2006, when the unlawful increases took place, said: 

“The Legislature and local legislative bodies SHALL secure the services of an enrolled actuary to provide a statement of the actuarial impact upon future annual costs before authorizing increases in public retirement plan benefits. An "enrolled actuary" means an actuary enrolled under subtitle C of Title III of the federal Employee Retirement Income Security Act of 1974 and "future annual costs" SHALL include, but not be limited to, annual dollar increases or the total dollar increases involved when available. 

The future annual costs as determined by the actuary SHALL be made public at a public meeting at least two weeks prior to the adoption of any increases in public retirement plan benefits.” 

In 2012 the Sonoma County Civil Grand Jury found that the Sonoma County Board of Supervisors did not comply with section 7507 in granting pension enhancements. Nothing was done. In 2015 the Marin County Civil Grand Jury found that four agencies in Marin  County (the County, the City of San Rafael and two fire districts) did not comply with section 7507 in granting pension enhancements. Nothing was done. In 2016 the Sutter County Grand Jury found that the Sutter County Board of Supervisors did not comply with section 7507 in granting pension enhancements. If past is prologue, nothing meaningful will happen in Sutter County either.

In each case unfunded pension liabilities, which are the exclusive obligation of the taxpayer, soared. In Marin, a county of just 260,000 people, unfunded liabilities and other obligations for the four entities went from about $10 Million in 2000 to well over $400 Million today. It is very hard to know how much of this is due to the unlawful increases but I have reason to believe it is most of it. (Email me for an explanation.) Orange and Los Angeles Counties each have over $5 Billion in unfunded liabilities.

What are the implications of these excessive and unlawful pensions?

A dollar can only be spent once. If it is spent on unlawful pensions it must either be replaced with higher taxes or services must be reduced.

What taxes might be raised?

Sales taxes, special assessments, parcel taxes, fees for parks, parking meters, etc. You name it. The ways that money can be extracted from the public are almost limitless.

What service might be reduced?

Those for the elderly, the young, the needy. Paving our roads, improving our water and power infrastructure. Improving our schools, enforcing our laws, building new fire stations. This is known as crowding out. Vital public services are being crowded out by enormous payments for pensions that were not lawfully granted.

What can be done?

Governments must obey the law, and they must be held to account for their failure to do so. They must be held to account for failing to inform the citizens of financial commitments being made on their behalf. They must be held to account for providing inadequate, inaccurate and untimely information. If reports by grand juries can be dismissed, as they have; if voter referenda can be overturned, as they have; then the only way to tackle this problem is with a lawsuit, one that directly attacks these failures.

What is in it for you if you don't live in Marin? Why should you contribute?

The answer is this. If these violations took place in three generally well-run counties, it is very likely that they occurred in a large number of jurisdictions: The State, its cities, counties and special districts. They likely occurred in YOUR county, city, town or special district. You, too, are likely paying for unlawfully granted pensions. A court decision establishing the precedent that section 7507 is mandatory and that it must be obeyed would have an impact statewide. 

The stakes for all of us are enormous, certainly billions of dollars. To make that number a little more personal, think about this:  According to the Stanford Institute for Economic Policy Research, using a market rate of return of 3.76%, public pension debt per California household is approximately $75,000 

What happens if the lawsuit succeeds?

There is no way to know for sure. Unlawful increases might be eliminated prospectively. They might be eliminated retroactively, in which case future payments could be reduced to offset improper ones made in the past. The law permits a retirement board to go back ten years and make adjustments. The final result will probably be somewhere in the middle.

Why GoFundMe? A lawsuit requires money, in this case a great deal of money. Accessing the justice system has become so expensive that individuals can no longer do it on their own unless they are very wealthy. But acting collectively they at least have a chance. 

The County government will stall, make motions, stall some more, make more motions and even file counter suits. It will try to draw the process out to make it as costly for me as possible. Courtesy of the taxpayer, the County will have all the resources it needs. It will do its best to deplete mine.

(Interestingly, by fighting this lawsuit the County will be using taxpayer money to work AGAINST the interest of the taxpayer.)

Public sector employees and their unions will fight my efforts tooth and nail, and they have virtually unlimited funds with which to do so. They will put unrelenting pressure on lawmakers, board and council members to do likewise. 

This will be a multi-year effort that could very well be decided by the California Supreme Court.

The following was provided to me by an attorney with experience in pension matters. It is an estimate of what it will cost to take a case like this to completion at the Supreme Court.

$15,000- Court fees (filings, motions, transcripts, service of process, etc.) 
$5,000- Copying costs ($1k if suit can be filed electronically) 
$50,000- Expert Witness fees 
$600,000- One attorney ($150k/year @ 4 years) $200,000- One paralegal ($50k/year @ 4 years) $50,000- Miscellaneous. (witness fees, travel, etc.) 

$920,000- Total 

It isn't reasonable to ask the public to fund this entire effort at once. That is a financial bridge too far. Too great an act of faith. With that in mind, I would like to raise enough money to file suit and get through the first judicial leg of the process, at the Marin County Superior Court. The best estimate for that is about $200,000.

Today I am starting a campaign to raise that two hundred thousand dollars. If I succeed in raising the money, and I succeed at the Superior Court, the other side will likely appeal. It may then be necessary to raise more money for the appellate process. That is a matter for another day.

If you believe pension reform and justice are called for, please contribute.

There is no minimum. If you are a plumber or carpenter or farmer in the central valley making twenty or thirty or forty thousand dollars a year, and are tired of seeing police and firefighters retire at age 50 or 55 with double or triple your income, contribute a few bucks. If you are a high-earning professional who can see the pension train barreling down the track about to run over us, give more. You know what you can afford. If you are one of the lucky few who are very wealthy, do what you can ... give even more. If you are anyone worried about the future of our state please help.

Please share this message with your friends. Share it on your Facebook page. Share it on other social media. 

There are hundreds of thousands of people in California, perhaps more, who know that our public pensions system is broken and unsustainable, and who believe that if we got into our current mess through violations of the law, those violations should be addressed. 

If everyone gives what they are able, and you know that amount far better than I, this goal is achievable. We can raise the money. We can succeed.

If you have any questions, email me through the contact/email function on the GoFundMe page. I will give you as much time or send you whatever documents it takes to make you comfortable. If you have comments or suggestions on how to better succeed please share them with me. ([email redacted])

If you want you donation to remain anonymous, which I recommend, please check that box when donating.

GoFundMe has a function whereby donations can be returned to donors. If I do not receive enough money and the project never gets off the ground I will return all contributions. 

Two hundred thousand dollars is a great deal of money. But it is small in comparison to the billions of dollars being spent in our state every year on illegally granted pension benefits. Please help me address this problem. Like the elephant in the room, it is too big to ignore. 

Thank you for your interest.

David C Brown
[email redacted]

Important notes:

1) I have been asked by some people if they can contribute to the cause by check, either because they are concerned about identity theft or some other reason. The answer is "of course". If you prefer to do that, by all means contact me through the email function on the GoFundMe page and I will give you the necessary information. I will not cash your check until I reach the necessary threshhold to proceed. If I don't get there I will tear it up.

2) If you are concerned about your employer's policy on making political contributions be sure to check with them. CONTRIBUTIONS WILL NOT SUPPORT OR OPPOSE ANY POLITICAL CANDIDATE. NOR WILL THEY SUPPORT OR OPPOSE ANY LEGISLATION. THIS IS A NON-PARTISAN EFFORT.

Frequently Asked Questions:

Q.  What is the money being used for?
A.  To secure an attorney who will bring suit against the County of Marin based on the GJ report of April 2015.

Q. Who will hire the attorney?
A.  David Brown who will be the plaintiff as a taxpayer of Marin.

Q.  Who will determine the future of the lawsuit?
A. David Brown with input from the attorney and perhaps other trusted advisors who may be solicited by David from time to time.

Q.  How much money will this take?
A.  A lawsuit like this one, given its unprecedented nature, could cost through appeals to the California Supreme Court up to one million dollars. 

Q.  How long could the lawsuit take?
A.  Years, perhaps 5. It depends on whether the County defends the suit and how. The Supervisors have a fiduciary (or near-fiduciary) duty to the public. They have no such duty to the employees. How they deal with that issue will have a great deal of influence on cost and duration.

Q. Do you have a lawyer in mind?
A. Yes and the lawyer is very experienced in these matters.

Q.  Can you tell me the lawyer’s name?
A. Not at this time as the person has not been retained which is one reason why I am raising the money.

Q.  Where will the money be kept?
A. The money contributed through Go Fund Me can only be left there dfor 30 days. GoFundMe is not permitted to act as a bank. After thirty days the money will be moved to a segregated, FDIC insured account at Bank of America. Checks sent directly to me will not be cashed immediately. If I don’t reach critical mass they will be destroyed or returned. 

 Q. How do I know the money will not be used for other purposes?
A. I will carefully document all expenses incurred; negotiate favorable rates; and have accounts clearly documented, overseen and audited every 6 months?

Q.  What if the case is not going well and you decide to terminate or not to appeal?  What if the lawsuit never gets off the ground? What happens to the money raised?  Will I get all my money back?
A.  I will return funds less any expenditures made proportionately to those who have contributed.

Q. How do I physically get my money back?
A.  Either by refund through GoFundMe or by check from me if you sent me a check or if I have withdrawn money from GoFundMe.

Q. You sued before but dropped the lawsuit when the county threatened to sue you for its attorney fees.  If they do that again, what will you do?
A.  I will not drop the suit.

Q.  What if your attorney sues the County for your attorney fees and they are awarded. Then what will you do?
A. To the extent I can, I will refund the money to the contributors.

Q.  All of the money will not be spent at the same time. How will the money be invested, if at all?
A.  The money will be in an FDIC insured account.

Q.  Are you doing this with anyone else as a plaintiff?
A.  No, just me. I am acting independently.

Q.  Why are you doing it?
A.  Because I believe in the rule of law. 

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Organizer

David Brown
Organizer
Mill Valley, CA

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