A subject that garners much attention and angst these days is that of public employee pensions, and rightfully so.

I am pleased to report that your Board of Supervisors recently approved a deal as part of a new contract with the Orange County Employees Association (OCEA), the County’s largest union, which represents a significant accomplishment in key areas of pension and overtime reform.

The agreement reflects the Board’s priority to address increasing pension costs and to reform how overtime is paid for County employees.

With the adoption of the agreement, overtime will be paid on regular hours worked rather than on all hours paid to employees who work overtime.

This change could achieve up to a 30 percent reduction in overtime costs.

The agreement also contains provisions for the County to implement a lower pension formula, 1.62% at 65, combined with a Defined Contribution Plan.

New employees will be given the option of selecting the current 2.7% at 55 retirement formula or the new, lower formula; and current employees will be provided a one-time opportunity to select the lower formula.

The lower formula, combined with the Defined Contribution Plan, will provide a significantly lower cost to the County as well as to the employees who chose it.

This agreement demonstrates that it is possible for OCEA and the County to work successfully toward solutions that can be a win-win for all.

Implementation of the new pension program required legislative approval. Impressively, Senate Bill 752 swept through the Legislature and was signed by the Governor on October 11, allowing Orange County to move forward with this reform.

In fact, the popular bill gained the attention of other local governments that are now looking to our approach as an example as they deal with similar pension issues.

This agreement with OCEA is an important step forward for the County in our efforts to reduce unfunded pension liability and ensure that we do not pass on debt to future generations.

I would like to commend my Board colleagues for standing firm with me on this important issue of fiscal responsibility.

Working together with our unions, the County will continue to progress toward making pensions and other post-employment benefits sustainable and less of a burden on taxpayers.