Claremont Insider: Sunday Corrections

Sunday, August 15, 2010

Sunday Corrections

We had a couple emails come in that warranted posting.

The first was a note about our post from last Wednesday on the Claremont Unified School District's and school board member Jeff Stark's tendency to obfuscate:

DATE: Thu, August 12, 2010 10:44:03 AM
SUBJECT: and it's just that simple
TO: Claremont Buzz

" the July 22 school board meeting, Jeff Stark (apparently the voice of authority on the bond issue) claimed it would take a long time to get that information....

"The assessor's report for 2009 on page 28 of the PDF file lists the assessed valuation for the city of Claremont as $3.55 billion."

I love how well you do that, and I know why it pisses people off. Never stop.

By the way, after reading that email, we noticed an error in Wednesday's post. The page we referenced from the LA County Office of the Assessor's report was page 16, not page 28. We've corrected that mistake.

* * * * *

Then there was this from a reader who wanted to set us straight on the matter of now-retired Indio city manager Glenn Southard. Earlier, we speculated that Southard's annual pension might be significantly larger than his final year's $300,000 salary. We thought that Southard might be able to use some of his $162,000 in unused vacation and sick time towards the number used to determine his CalPERS pension.

The reader, who has a good deal of expertise in municipal retirement finances, says that we were in error when we indicated that Southard could have used any bonuses, vacation, or sick time to enlarge his retirement. The reader also states that Indio's own finance director would have been ethically bound to advise the Indio council of the improprieties of allowing Southard to count such extras towards his retirement payouts.

The reader goes on to say that the real budget buster for municipal pensions is public safety workers (police and firemen). The reader makes a number of good points there that are very much overlooked, by us and by others who follow public pensions.

Here's the reader's letter:
DATE: Wed, August 11, 2010 11:40:32 AM
SUBJECT: CalPERS fact check
TO: Claremont Buzz

A couple of things you did not get quite right. I'm no fan of Glenn Southard, but your article does have some factual errors. As to spiking, CalPERS is pretty good about not allowing it, unless the City Council is complicit in the spiking scheme (ala Bell). Overtime, bonuses, and sick leave and vacation payouts are NOT used to determine final compensation. The only way accrued sick, and vacation time could be used to spike the final years salary, is if the City Council approved, a salary increase, in lieu of paying out the accrued leave, That would have to be done at a public meeting, and if found by CalPERS would result in the benefit being reduced. CalPERS finding it, and doing something about it (as in Bell) is not likely. But a City's finance director, would know that this is a prohibited practice, and would be ethically bound to advise the Council against taking such an action.

Now, a great CalPERS/ public safety union scam has to do with police and firefighters. Uniform allowances, education pay, and special assignment pay (like being a detective, or a truck captain) are counted as part of final compensation, which is paid at about 98.6 % in retirement starting as early as age 50. Where else can you get paid after retiring for uniforms you don't wear, a speciality bonus for work you no longer do, and for getting an education which allowed you to advance through the ranks, to the level of pay at which you retire at. And if you are a firefighter you get paid to sleep, and as a police officer you get paid for your meal times. This is were the pension system is bleeding. Oh, and guess what. CalPERS has recently completed new actuarials on age. The average public safety worker will live to 82.5, while the average general employee lives to about 81.7. This finally answers the myth that police, and firefighters don't live very long after retiring--therefore they should get better pensions.

You really ought to look into this, instead of focusing on management, as public safety retirement benefits are what are creating the large unfunded liabilities.

I should know. I am a former finance director for a large California city.

We stand corrected, though we are still puzzled by a couple things. The Claremont Courier's Tony Krickl reported last week that Southard's retirement payments, according to Indio's records, were $309,000 a year. Since this is above his final contract's salary, something must have been added in.

We looked at another blog's post that showed a 2007 amendment to Southard's Indio contract (posted here). Included with that contract amendment was a letter from CalPERS regarding Southard's retirement that states: "69.625 days unused sick leave have been credited to the member's account. If all of this information is correct, no action is needed." The letter was dated March 18, 2010. So at least some portion of that sick leave appears to have been used to bump up Southard's pension.

One other point. In Indio, Southard's finance director was Michael Busch, who had the same position under Southard in Claremont. We can't speak to his ethics, but Busch was always a Southard yes-man. We don't see him opposing anything that would benefit Southard.