Monday, August 22, 2016
[Marin County] Dick Spotswood: Pension reformers get cold shoulder from retirement board
Citizens for Sustainable Pension Plans, the Marin-based pension reformers calling for properly funded public employee pensions, is relentless.
Witness its follow-up on the Marin grand jury’s 2015 investigative report, “Pension Enhancements: A Case of Government Code Violations and a Lack of Transparency.”
The Marin jurors concluded that some of the members of the Marin County Employees Retirement Association — the county, the city of San Rafael, Novato Fire District and Southern Marin Fire Protection District — possibly violated state law when enhancing their members’ retirements. On 38 separate occasions between 2000 and 2006 they did so ignoring public notice mandates and failing to provide proper actuarial evaluations of the enhancements’ future cost, the report concluded.
When called on the violations, MCERA and its member agencies essentially blew off the grand jury, the taxpayers’ sole protector when it comes to reviewing semi-autonomous agencies such as MCERA. Those pension enhancements along with riskier investments needed to produce MCERA’s optimistic goal of a 7.5 percent return on principal amplified by the 2008 crash, led to increasing the pension agency’s unfunded liability from a surplus of $26.5 million in 2000 to a deficit of $536.8 million in 2013.
Marin’s Board of Supervisors formally denied every allegation, saying MCERA and its bargaining units “essentially complied” with the law.
If the tax collector ever questions your property tax payment, try explaining that you “essentially complied” with tax law and see how far that gets you.
The reaction to CSPP’s call for an investigation from MCERA board chair David Shore was basically “thank you for sharing.” When Shore explained that as the request was raised at public open time, it couldn’t be discussed at that session, an audience member asked the logical follow-up.
“When will the issue be agendized?” The silence from the nine board members was deafening.
MCERA board members have zero desire or incentive to revisit their predecessors’ transgressions. Even if such a look-see verifies past errors and pinpoints their costs, undoing improperly granted pension enhancements would be a legal nightmare understandably outraging rank-and-file impacted employees.
Board attorney Ashley Dunning had previously opined that MCERA’s board was prohibited from investigating the grand jury’s charge. According to CSPP, the legal citations provided by Dunning were either “misleading or outright wrong.”
It’s hard to criticize Dunning for giving her client, MCERA’s board, what they wanted, because she made it clear she doesn’t represent the public; she only represents the board.
Legal niceties aside, fundamentally MCERA and its member agencies failed to do their moral duty owed to pension beneficiaries and Marin taxpayers when they approved multi-million-dollar pension enhancements that had violated state transparency laws.
Retirement Administrator Jeff Wickman said it’s the duty of the county, San Rafael and the two fire districts, and not that of MCERA, to call for any investigation.
That’s a run-around. The four agencies already strove to belittle the grand jury report, essentially calling it a tempest in a teapot.
If so, it’s a multimillion-dollar tempest that will inhibit each MCERA constituent agency from delivering the full level of public services that Marin residents could have enjoyed absent ruinous pension deficits.
Despite the tarnish to MCERA’s reputation, it’s clear the retirement system and its member agencies will never conduct a truly independent investigation.
The only good news is that this fiasco provides a lesson on how not to boost pensions in the future.
While county supervisors and MCERA understandably want their past mistakes forgotten, taxpayers can thank the diligent grand jurors for their report and be grateful that the volunteer pension reformers are like a dog with a bone. They won’t give up.
August 20, 2016
Marin Independent Journal
By Dick Spotswood