Public workers losing retirement pensions
NILAND — Niland Sanitary District public workers are in danger of losing the majority or entirety of their retirement pension fund because prior administrative leadership neglected to pay into the state’s largest retirement fund in more than a year.
NSD owes CalPERS $194,253 and with no resolution in sight, CalPERS is taking steps to terminate NSD’s contract.
CalPERS is set to take a vote on the contract termination next week.
If the contract is terminated, NSD’s five employees will see either 91 percent or 100 percent of their pensions cut according to CalPERS reports.
It’s another blow to residents in the city after news of the dissolution of the NSD came to light recently.
The Imperial County is likely to take control of the beleaguered district as the Local Area Formation Commission voted recently to dissolve the struggling district.
The only way NSD employees could keep their pension is if NSD pays a hefty cancellation fee up front and then CalPERS moves the district into a low- risk fund called the terminated agency pool. That termination fee was not disclosed by CalPERS.
Ryan Kelley, Imperial County District 4 supervisor remarked that in 1995 NSD took a vote to enter into CalPERS and sent notification yet never made a payment.
In March 2016 NSD sent notice to CalPERS it wanted to withdraw from the pension system.
“I’m sure it’s because they couldn’t meet the obligations of the monthly bills,” said Kelley. “Imperial County is trying to resolve that obligation because they never got any benefits out of CalPERS.
It’s hard for a small sanitation district to come up with the revenue. But we’re trying to help them cope with the obligation and get reconsideration for all these debts.”
The issue came to light at CalPERS only after one of the NSD employees phoned the pension fund to inquire about his status.
The county is set to have a regular meeting Tuesday but no item regarding the Niland Sanitary District is scheduled.
Previous loans by the Imperial County
There is also another financial burden that complicates NSD’s ability to pay.
As reported previously in the Press, the Board of Supervisors on January 24 approved a $934,753 loan to NSD to help eliminate liabilities associated with the California Regional Water Quality Control Board fines due to compliance violations, half the cost of a facility upgrade design, as well as $118,000 in outstanding debt the district owed CalPERS.
However, the loan was contingent on NSD increasing its sewer rates and needed a majority of votes by its 538 parcel owners. Two votes were held, in April and July and both failed.
Lennita Ozier, is a NSD director and the lone vote against a rate hike at the beginning of the year. Ozier remarked residents understand NSD needs money to come into compliance, but individuals lack the income to pay for it.
As an example she cited the Oasis Mobile Village, a trailer park where she works as project manager. Their current annual sewer bill is $16,000, but it would rise to more than $63,000 under proposed rates.
“That won’t fly with anybody,” said Ozier. “Merchants are abandoning Niland because people can’t afford to do business here. I’ve been on the board a year, but maintenance of the sewer system had been neglected long before I arrived.”
Kelley noted grants to come into compliance have been extended, but they will not continue forever.
“We’re assisting NSD to reevaluate and come up with plans that have less impact on sewer rates,” he said. “But there still has to be some increase to stay in compliance with RWQCB.”
CalPERS
The CalPERS retirement program builds retirement and health security for state, school and public agency members. Along with California’s town and counties there are 118,488 special districts that include fire protection, transit, utility water and sanitation districts, of which Niland Sanitary District is one.
CalPERS has about 68 percent of the assets to pay all of the benefits it owes to its members immediately. A new CalPERS financial assessment finds 16 of its members have less than 60 percent of the assets it needs to fund full retirement for its employees.