Rejection of ICERS plan is senseless
The Imperial County Employee Retirement System reorganization plan was turned down by Imperial County Supervisors for basically no reason. The plan would have cost less than $50,000 a year, which is about 0.025 percent of the county’s budget. However, the system would have incurred such expense with no impact to the county’s General Fund.
According to the plan, ICERS has had for some time staffing issues, like many other agencies within our local government. All of the employees do everything possible to manage retirement funds and pay benefits to retired employees. But in this particular case, the tasks are monumental.
Here are some figures:
As of June 2016, ICERS’s net plan position (the difference between assets and liabilities) was almost $700 million.
For several years, the system has included employees from the County Superior Court, Imperial Transportation Commission and the Local Agency Formation Commission.
Employers and employees made contributions in 2016 of $33 million, a third from workers and the other two-thirds from the public agencies. At the same time, the system paid $33.9 million in retirement benefits. Administrative expenses were $1.3 million. According to the system’s documents, as of 2016, it had 2,127 active members, 1,078 retirees and beneficiaries and 425 terminated vested members.
Imperial County District 1 Supervisor John Renison said during Tuesday’s meeting that department heads must reduce 15 percent of their expenses for the upcoming fiscal year, the same percentage required last year. However, many departments were unable to accomplish that goal for several reasons.
Imperial County Auditor-Controller Doug Newland said in the county’s budget manual for next year the county cannot continue to count on balancing the budget from the Rainy Fund like it has for the last five years. Millions of dollars have been taken in order to cover the deficit and avoid firing staff and affecting union membership.
Let’s just remember that according to the State Controller’s office, two years ago 72 percent of the county’s revenue came from federal or state sources, while 81.67 percent of expenses were made in social services, public health and public protection. Long story short, the county’s financial situation is worse than constraints reported right after the Great Recession. Department heads have been required to cut expenses in some areas, like out-of-the-county travel.
But just last week county supervisors approved several thousands of dollars in travel to three departments that, according to those who made the requests, will not impact the General Fund. This doesn’t sound terribly different from the additional funds ICERS requested for its reorganization plan.
The system’s plan would give clearer tasks to all workers and would have provided a better picture of management chain of command. Retirement Administrator Scott Jarvis told supervisors the retirement system has had concerns for years about its ability to carry out its fiduciary duties given current staffing levels.
Regardless, Teamsters representative Ruth Duarte asked Jarvis to follow correct protocol and run a plan through Human Resources.
But guess what? The original reorganization proposal was presented in December 2014. Human Resources rejected the plan based in a study conducted by CPS HR Consulting. Due to the lack of information in the arguments expressed by the county, ICERS filed a Petition for Writ of Mandate in January 2016 in order to force the county to provide such a report. Judge Brooks Anderholt ordered the county to provide the document and prepare a new reorganization plan. And just this Tuesday the new proposal was presented again and declined by supervisors. The $50,000 in additional funds required for the reorganization plan means every active member would have paid $23.50 per year or less than $2 per month.
For me, based on all the information I’ve seen, this deal is not about the money, but something worse. I am afraid this is just politics and a game of power between the county and the retirement system.