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LADWP: The information we told you was correct is “extremely misleading and incomplete.”

Robert Fellner Blog

In response to our earlier press release on the publication of the LADWP’s pension data, the LADWP issued the following statement (condensed to the relevant claims, you can find their full release here):

A press release issued by the Nevada Policy Research Center (aka Transparent CA) today includes extremely misleading and incomplete information about an LADWP retiree that is used to attract interest in the story and is falsely represented as indicative of the LADWP retirement system.  The information about an Engineering Associate omits key information…

[Transparent California] cites the [$363,000 annual] retirement payment of an Engineering Associate who was 87 years old when she retired, having made contributions to the Plan for over 47 years.  Her pension amount was calculated by annuitizing the balance in her account over her life expectancy.

The first thing to note is that the LADWP does not dispute a single factual claim in our release. They acknowledge that a retired engineering associate receives a $363,000 annual pension, as we stated. They are correct that it should have come with some note indicating its unusual nature, particularly as it appears hers is the only case out of the over 7,000 retirees that this applies to.

Yet, the LADWP did not include any such note in the data provided to us. Furthermore, we asked for clarification prior to publication, as shown below:

From: Robert Fellner [mailto:records@transparentcalifornia.com]
Sent: Thursday, July 13, 2017 12:48 PM
To: Mendez, Veronica C.
Subject: Re: Nevenka Ubavich CPRA R17-16

Hi Veronica,

For Nevenka Ubavich, there is a $363,000 annual pension amount report[ed], which is much too high to be the regular, annual amount — as it would be 300% of final salary!

Is it okay if I add a note indicating that it likely includes a one-time payout of some sort?

Thank you.

Sincerely,

Robert Fellner
Research Director, Transparent California
7130 Placid St. Las Vegas, NV 89119
Phone: 702.222.0642 F: 702.227.0927
E-Mail: Records@TransparentCalifornia.com

From: Mendez, Veronica C.
Sent: Friday, July 14, 2017 2:50 PM
To: ‘Robert Fellner’
Subject: RE: Nevenka Ubavich CPRA R17-16

Please don’t. It is not a one-time payout. The information is correct.

The entirety of the LADWP’s response to a request for clarifying or contextual information about this pension payout was that we should not add a note as “the information is correct.”

It is thus particularly ironic that the LADWP today declares the reporting of this “correct” information as “extremely misleading and incomplete,” given that the LADWP was given the opportunity to provide the necessary contextual information, but refused to do so.

Absent this isolated case, the LADWP did not dispute a single claim in our release. If we ignore the case of Ubavich’s $363,000 pension, the next highest pension was nearly $357,000. The average pension and benefits package for a full-career retiree remains at nearly $85,000 and the cost to ratepayers was still a staggering 50 percent of payroll last year.

Given these facts, it is understandable that the LADWP would prefer to deflect attention elsewhere.

To view the entire dataset, please click here.

Help keep government transparent!

Robert Fellner Blog
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Source: ABC30 Fresno

As our 3rd year of operation comes to a close, we remain truly humbled by the overwhelmingly positive response to the Transparent California website and the service it provides.

It has been quite a ride to this point, but to keep things going we need your help.

If you value the service and would like to help keep Transparent California updated and running smoothly, please consider making a tax-deductible donation today!

Your donation will be used to help pay for the cost of recently upgraded web servers designed to accommodate the growth of traffic and ensure the over 10 million public records remain easily, and quickly, accessible to all.

Your donation will also help cover the cost of our team of researchers who work tirelessly to obtain, format and post public records from over 2,000 different California governments!

To get a sense of the impact that Transparent California has had so far, be sure to browse the News section of our blog, which contains a small sample of how Transparent California has helped to empower residents and the media with complete, accurate information on public pay and pension data.

Please click here to donate via credit or debit card.

If you prefer to donate via check, please mail a check made payable to “Transparent California” to:

Transparent California
c/o Robert Fellner
7130 Placid St. Las Vegas, NV 89119

As a project of the 501(c)(3) Nevada Policy Research Institute, all donations are tax-deductible and used exclusively for the Transparent California project.

Thank you for your support and we’ll see you in 2017!

105 Santa Monica city workers cleared over $300,000 last year

Robert Fellner Blog, News

CBS Los Angeles did a report on Santa Monica’s extroardinarly high compensation packages, using TransparentCalifornia.com data.

The TV segment can be viewed here.

Given the time constraints, the segment could only cover a fraction of the excess. Here are some additional examples:

Santa Monica tops statewide list for a variety of jobs:

The current city manager — hired during the 2015 year — makes a $340,000 base salary, which will easily place him in the top 3 next year, when there is a full year’s compensation package (I estimate it will be around $450,000 when benefits are included) to report.

Two more anecdotal examples:

  1. Farmers’ Market Supervisor: $142,903.
  2. Assistant City Librarian: $220,558.

This excess is pervasive throughout the city, with Santa Monica outspending its peers in total department wide spending as well:

Spending on attorneys (includes assistants and deputy city attorneys)

  • Long Beach: $4.75 million for 28 attorneys at an average cost of $170,000.
  • Anaheim: $4.45 million for 24 attorneys at an average cost of $185,000.
  • Santa Monica: $7.55 million for 29 attorneys at an average cost of: $260,417.

In total, Santa Monica spends 59% and 70% more on attorneys than their much larger neighboring cities.

Perhaps most compelling is what Santa Monica spends on transit, which is the city’s largest department both in raw dollar terms and number of workers — with bus drivers accounting for more than 13% of the city’s entire workforce.

The Bureau of Labor Statistics reports that the median city transit bus driver in the Los Angeles-Long Beach-Glendale metropolitan area earns a wage of around $39,000. The median Santa Monica bus driver makes $59,000 in regular pay — which excludes overtime, other pay and benefits.

This disparity is then amplified via overtime and retirement benefits based on a regular salary that is already 50% higher than the market wage for other city transit bus drivers in the Los Angeles area.

Adding benefits, overtime and other pay increases the compensation package for the median Santa Monica bus driver to $111,585 — with the highest earning just under $168,000.

Finally, at $3,200 per resident, Santa Monica is tied with Beverly Hills for spending more on employee compensation than any other city in California.

Fairness

Santa Monica’s city manager defends this pay as a matter of “fairness” based on speculation that TV news anchors might make even more.

But this misses the point: government is spending other people’s money. Everyone would love to see all bus drivers earn over $100,000, but it’s the definition of unfairness to take money from those earning much less to fund lavish pay and benefits for a select few.

The impact

Santa Monica’s roughly $300 million in employee compensation accounts for 72% of the entire General Fund operating budget. This goes a long way to explaining why Santa Monica has some of the highest taxes in the nation, such as:

  • 10.25% sales tax
  • 10% utility tax
  • 14% hotel tax
  • 10% parking tax

Consequently, when the next funding need comes up — be it paving roads, bailing out pensions in the event of a market downturn, etc. — the City will likely have to hike their already record high taxes yet again.

But when that tax hike comes, taxpayers have a right to know its true cause:

Santa Monica’s General Operating Fund, FY16piechart

US public pension plans’ accounting gimmicks exposed

Robert Fellner Blog

I’ve written previously on the staggering consensus of experts who reject the accounting methods utilized by U.S. state and local public pensions plans to understate the true size of their debt. It’s worth reiterating that this approach is rejected by all other pension plan providers — which includes the U.S. federal government, U.S. private pension plans and both public and private plans in Canada and Europe.

A new paper by four of the nation’s premier pension experts does an incredible job of articulating why the approach currently used by U.S. public pension plans is flawed. Here is how Reason’s Truong Bui describes the authors:

To start, the authors of the paper are no outsiders with an ax to grind. The findings and arguments in the paper were instead informed by a range of influences, including those from a former head of JPMorgan’s Global Sovereign Liability Management (Ed Bartholomew), a former SOA vice-president (Jeremy Gold), a former director of Moody’s Analytics (David G. Pitts), and a vice president at Goldman Sachs (Larry Pollack).

The effect of adopting proper accounting methods reveals why so many governments are reluctant to do so: combined U.S. public pension debt would rise from $1.7 trillion to more than $5.6 trillion!

The cost to service this debt would most likely cause a wave of defaults, like what has already happened in the commonwealth of Puerto Rico and cities like Detroit, Michigan and Stockton, California.

The paper can be read here.

 

An easy solution to the teacher shortage

Robert Fellner Blog ,

In today’s Washington Examiner I highlight the unfair burden public pension plans impose on today’s teachers and students.

A slice:

CCSD could boost teacher pay, at no extra cost, if lawmakers allowed it to modernize its retirement system — the Public Employees’ Retirement System of Nevada (PERS).

While CCSD pays PERS directly, teachers pay their share through salary reductions.

Consequently, as PERS costs skyrocketed — up over 36 percent since 2007 — to today’s all-time highs, CCSD was unable to raise salaries as much as they, and teachers, would like.

What’s most frustrating about this rate hike, however, is that it provides no additional benefit to the current teacher paying it. Instead, almost all is spent on paying down PERS debt — a function of a system which was designed to transfer the cost for the previous generation onto present-day teachers and taxpayers.

In other words, current teachers are receiving lower wages to pay for PERS past funding failures.

Be sure to read the whole thing here.

Teachers’ Unions Profit at Students’ Expense

Robert Fellner Blog

At RealClearPolicy.com, I argue that reforming California’s terrible tenure laws will require understanding what created it, not merely wishing legislators act against their own self-interest.

Because experts cite teacher quality as the most important factor in student-learning, even those who are normally supportive of government unions have criticized their inflexible opposition to reform — as was seen in recent editorials from both The Los Angeles Times and The Sacramento Bee.

But simply to ask legislators to oppose one of California’s most powerful special interest groups is to ignore the very forces that got us here in the first place.

Read the full piece here.

Government unions profiting at the expense of others: California’s teacher tenure rules

Robert Fellner Blog

Here’s a letter to the editor I sent to the Sacramento Bee in response to Teacher tenure debate ends with too little noise, August 23.

California’s teacher tenure rules — so harmful to students’ well-being that it “shocks the conscience” according to a Superior Court judge — is a truly shameful example of how government unions profit at the expense of others.

These terrible laws are the result of the special-interest effect: lawmakers serve those who can provide the most support to them — government unions like the California Teachers Association — over the public interest.

The basis for government unions rests on shaky ground as it is: the original labor movement was created to prevent the exploitation of workers by profit-hungry corporations. Because the government has no profits over which to negotiate, the case for unionization remains dubious. In California, elected officials are actually forced to sign union contracts.

Political self-interest guarantees that lawmakers serve special-interest groups. Instead of wishing this wasn’t so, Californians should ask themselves which is more important: government unions or their children?

Edited version of the above ran in today’s paper.