Posted on 04/20/2002 2:07:33 PM PDT by afraidfortherepublic
Supervisors voted without cost analysis of lump-sum benefit, McCann claims
Milwaukee County's controversial pension changes should be declared void because the County Board approved them improperly, according to District Attorney E. Michael McCann. County supervisors voted on the benefit improvements without a formal analysis of the cost impact of the "backdrop" lump-sum benefit, McCann claims, in a motion filed Friday in a lawsuit over the benefits. McCann is seeking to have his claim heard as an intervenor in lawsuit in which Milwaukee County sheriff's deputies and a group of retirees are asking to have the lucrative pension changes extended to them. It was the lump-sum benefit that could have paid out up to seven-figure sums to former County Executive F. Thomas Ament and other veteran county officials - including McCann - and six-figure payouts to others. Public outrage over the benefits led to Ament's resignation and sparked recall efforts against 13 supervisors. McCann doesn't address what might happen if a judge agrees with him, or whether that might prompt attempts to recover the lump-sum payments already made. McCann was out of town Friday and unavailable for comment. His motion notes that if the court strikes any or all of the pension changes, that the county will need "in good faith to renegotiate union contracts."
An attorney for the county's largest labor union questioned McCann's approach.
"I don't know if he realized the chaos that would result with the unions if he wins," Alvin Ugent said. "Are we going to go back and retroactively negotiate all these contracts?" Ugent represents District Council 48 of the American Federation of State, County and Municipal Employees, which seeks to intervene in the same lawsuit.
"We'll be vigorously fighting McCann's action," Ugent said.
Specifically, McCann argues that the entire package of pension benefit enhancements wasn't given the scrutiny required under state law because no actuarial analysis of the financial impact of the lump-sum provision was done before the County Board approved the changes in November 2000.
State law requires a written report on the "actuarial effect and the cost implications of all changes" to the county pension system.
However, there was no specific estimate of the provision provided. Gary Dobbert, the former county human resources director, told county supervisors it was expected to be "revenue neutral" - which later proved inaccurate. But Dobbert did not even request a cost estimate of the provision until mid-December 2000 - about six weeks after the benefit was approved for elected county officials and non-union county staff - said Dennis Skelly, the county's actuarial consultant.
Normally, those analyses are done before a vote on changes, Skelly said Friday.
"That's the normal course on things that they believe to have significant cost," Skelly said. "I don't know why it wasn't done."
Dobbert apparently did not supply county supervisors with the Jan. 16, 2001, estimate Skelly did until three months later, after the pension benefits had been extended to most other county employees. That estimate said the one-year cost would be $718,000. So far some $17 million has been paid out in lump-sum benefits.
McCann's motion notes that the county Pension Study Commission, at a meeting Oct. 27, 2000, had received two letters, one from Dobbert and another from Skelly. That was a "skeletal presentation" of the actuarial costs of the proposed changes "other than the backdrop change," McCann's motion states.
"Thus when the Milwaukee County Board adopted the backdrop provision in November 2000, no backdrop actuarial effect or cost implication study had been done whatsoever," McCann's motion states.
Dobbert couldn't be reached for comment Friday.
County Board Chairman Karen Ordinans called McCann's action "a good step as far as covering all the bases."
Board supervisors had raised questions themselves as to the legality of the vote because "we felt that if we had been given all the information, we would have reached a totally different conclusion," Ordinans said. She said another lawyer hired by the County Board had examined similar issues raised by McCann but "didn't feel it would hold up."
"Mike is feeling much more strongly about it and wants to pursue it," Ordinans said. Pension Study Commission member and County Board Supervisor Mark Borkowski said McCann's action was "some of the best news I've heard in a long time." "Whether or not it actually happens remains to be seen," he said. "I have always felt when all this stuff came out, how could these payments legitimately be made?"
A member of the commission for 10 years, Borkowski said he was unaware that state law required a formal report or procedure for pension changes.
"I just assumed everything was forwarded the way it was forwarded because that's the way we do things," he said. Steve Huff, a lawyer for the County Pension Board, declined to comment because he hadn't seen McCann's motion. Jeremiah Hegarty, chairman of the Pension Board, also declined to comment. He noted that board doesn't determine benefit changes. McCann seeks to intervene in a lawsuit filed Feb. 15 on behalf of unionized sheriff's deputies and retirees - groups left out of the pension enhancements. The deputies union did not reach a contract agreement along with other county unions when the benefits were granted in 2001. Bayfield County Judge Thomas Gallagher is hearing the case. He was assigned by the state Supreme Court. The lawsuit contends that the pension benefits, once granted, cannot be taken back, according to John Fuchs, attorney for the deputies and retirees. The suit seeks monetary payments to the plaintiffs instead.
BTW, FReepers have been involved in every step of this recall movement, as well as numerous ordinary Milwaukee citizens.
Be still, my heart! Has anyone besides Gerry Boyle (eons ago) ever run against McCann?
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