Budgets and Employee Pensions

In a recent post on The Patch by Rancho Cordova's Elizabeth "Libi" Uremovic, she exhibits a lack of understanding of municipal budgets and employee pensions. She desperately tries to find continuing corruption in Beaumont for the promotion of private services her business offers to prospective clients in other jurisdictions. I doubt she truly believes her claims and is making such histrionic statements purely for the shock factor. 

All those of us who have become Ms. Uremovic's regular targets have become used to her tactics, but once in a while, she stoops lower than usual, even for her. I don't think she realizes, or more likely doesn't care how many Beaumont citizens, employees, and friends and family members of our employees she offends when she writes the following:

I'm sure the majority of Beaumont Citizens reading this don't have much pity for City Employees losing their Pensions. In many respects; it couldn't happen to a more deserving group of people.

Fake News vs Truth - Here we go

I am going to ignore the venomous libel and personal attacks and try to find the excerpts from her post where she is trying to make a coherent argument. It won't be easy but I am up for the challenge. 

Since Parton's arrival in Beaumont he's purchased a lot of 'bling'. Beaumont Staff and Council are spending money on new vehicles, office furniture, computers, trips, and of course the parties.

The FY2018 budget included a line item “Capital Expenses” for various funds and departments.  That budget line item was developed for replacement of long overdue fleet vehicles and information technology equipment, as well as some furniture and fixtures.  The travel expenses were also budgeted, including costs for attendance at the annual League of California Cities conference.  The City of Beaumont has had no “parties”.  There has been an employee benefits fair held in December, and a service recognition lunch will be served this week.  Both in City hall, only at lunch time, and are not extravagant by any stretch.

The 'plan' ... is to continue to steal money out of the Pensions and run up the Pension Debt, then throw the Pension Debt into a Bankruptcy.

There has been no plan to enter into Bankruptcy.  The City of Beaumont has begun the financial recovery process, thus avoiding even the consideration of bankruptcy. 

But what people in the private sector might not realize is that Beaumont City Employees don't pay in any Social Security Insurance - SSI. They are dependent on a pension from the City.
Some government agencies in California offered marvelous pension packets to their employees; so marvelous that the agency could opt-out of paying in SSI. The problem is that they never paid the Pensions into the System.

CalPers pension and Social Security are two different retirement plans, and there has been confusion in the past about one versus the other or both.  I have linked to an article from CalPers that addresses some of the concerns, and provides phone numbers if anyone has additional questions. 

The employees pay in their portion of CalPers through a withholding of their pay.  The City then has an obligation of a matching contribution.  Those contributions are added together and made by the City on a regular basis to CalPers. 

As Melana Taylor discussed with the Finance Committee at length, the liability recognized on the audited financial statements relates to the actuarially determined future liability of the plan.  CalPers does not require payment based on that calculation.  However, CalPers is developing a methodology whereby payments towards the future actuarial calculations can be made.  There are many factors that drive the actuarial determination which includes years of service, participant age, mortality tables, and compensation rates.  Additional considerations include service by multiple participating municipal agencies. 

Government Accounting Standards Board (GASB)  Statement No. 68, commonly referred to as GASB 68, set an amended standard for accounting and financial reporting for pensions, which became effective with Beaumont’s fiscal year ending June 30, 2015.  Also included in this standard is the disclosure of assumptions, explanations of annual changes, summary of information including ratio, plan resources, contribution rates, discount rates, and the recognition of deferred inflow and outflow of resources.  Here's a link to "A summary of GASB 68"

Finally, this last quote shows that Libi Uremovic knows she is lying or, just doesn't do her research and makes up statements for shock factor:

- they don't even 'believe' in pensions in Texas

According to Texas State Comptroller's website:

Texas’ state and local government pension funds have more than 2 million members in 93 different plans. The Employees Retirement System (ERS) manages three funds for different groups of public employees: ERS for most state employees; the Law Enforcement and Custodial Officers Supplemental Retirement Fund (LECOS); and the Judicial Retirement System Plan Two (JRS II). The main ERS fund includes most state employees and all LECOS members, serving more than 185,000 active participants in all

Libi Uremovic claims

(Todd) Parton was not qualified to be Beaumont's City Manager because he didn't know California State Laws and he had no experience managing a city the size of Beaumont.

After reading this latest piece of Ms. Uremovic's, one has to wonder what, if any qualifications, she has to comment on municipal accounting and pensions in any city or state. Maybe she'll share her resume with us.