Firefighters propose cuts

[30ashopper]

Bob H., I am just dumb founded. I don't understand how a pension agreement like this (which I feel is totally lob sided and very unfair to taxpayers) came about here in Walton County. I also don't understand what's up with these salary increases we've seen since 2008. (I know you're not an elected official so don't take those statements as accusatory.)

Is the commission on the take or something? Sounds like it's time to toss the whole lot of them out and start over with people who are actually concerned about the liabilities taxpayers currently face and the overall fairness of the whole pension agreement.

I guess maybe it's time I get more involved, I never would have imagined something so egregious could take place here in Walton County.

 

[Bob Hudson]

I am an elected official. I was elected to the South Walton County Mosquito Control District - Seat 3 in 2010 after being appointed to fill the vacancy created with the removal of the previous Seat 3 commissioner.

I became interested in SWMCD when the WCTA discovered that the then director was making 123,000 per year supervising a staff of 12 full time and 4 part-time employee's. Our new director makes less than 70K.

The salary increases were higher in 2006 and 2007 when the money was flowing like water out of a boot. All negotiated through collective bargaining. I believe the only raises seen in the last year were "educational step raises" (about a 4.1% increase in payroll) that are in the contract.

Before someone accuses me of being anti union - I am NOT.

I am not on the SWFD Board.

 

[30ashopper]

I am an elected official. I was elected to the South Walton County Mosquito Control District - Seat 3 in 2010 after being appointed to fill the vacancy created with the removal of the previous Seat 3 commissioner.

I became interested in SWMCD when the WCTA discovered that the then director was making 123,000 per year supervising a staff of 12 full time and 4 part-time employee's. Our new director makes less than 70K.

The salary increases were higher in 2006 and 2007 when the money was flowing like water out of a boot. All negotiated through collective bargaining. I believe the only raises seen in the last year were "educational step raises" (about a 4.1% increase in payroll) that are in the contract.

Before someone accuses me of being anti union - I am NOT.

I am not on the SWFD Board.

Woops, sorry. Didn't know who I was chatting with.

 

[scooterbug44]

Still waiting to hear anything about the other cost saving measures proposed and not acted upon - like not taking vehicles home.

 

[Bob Hudson]

Shouldn't make any difference should it.

 

[Bob Hudson]

Still waiting to hear anything about the other cost saving measures proposed and not acted upon - like not taking vehicles home.

She doesn't want to put anything in an email. Wants to meet personally. Our schedules haven't worked out at this time.

 

[beachFool]

>>>.We don't have enough information on this from this particular study. 2008 was an anomaly, as was 2010.<<<

Conflating the market returns in 2008 with 2010 shows an astonishing lack of market history.

In 2010, the US Total Stock Market Index returned 17.8%. From 1927 thru 2010, the Index topped 17.8%, 34 times.

In 2008, the same index lost 36.7%, a figure exceeded only once from 1927 thru 2010.

Regarding market returns, when I was on the board, I understood the actuary to say that generally accepted practices for pension accounting was returns are blended so that one year doesn't dispropotionally skew funding.

I am not an expert on pension accouning and will defer to anyone who understand how liabilities are calculated.

 

[beachFool]

Bob, I did not see where that was posted. Was that in a different thread? Either way I have some idea of those numbers. Does the return on investments only go back to 2008 in that report? I have been trying to figure out what the rate of return has been for the life of the plan I believe that it started in 1998 or 1999. Obviously 2008 was a bad year. That was one of the major contributors to the District having to pay a lot more to fund the plan. I gathered from the meetings that I attended when Buzz was still on the board he has a problem with the assumption of a 8% return. Who makes that reccomendation? That I am not clear on. I know the pension board has to approve it but I think they take advice from professionals right? If you know let me know.[/QUOTE]

The actuary recommended we use 8% along with one of the advisors (there are two advisors).

CALPERS (CA Pension plan) uses 7.75% and gave serious thought to using a lower number.

Chevron's pension uses a number I can't remember exactly but lower than 8%.

Both of these pensions dwarf SW Fire District and I cannot imagine we would have consistently lower costs.

Costs drive returns.

Our professionals recommended using 8%. To me, it's too high.

Based on data from Roger Ibbotson and with plans we run for individuals, a 61% stock portfolio would have 7.62% return.

Ibbotson's projected returns are slightly lower than historical returns. We can use either but I feel more comfortable using the projected numbers.

For the record, Henry, I am a professional, too.

 

[beachFool]

>>>If we moved to a 401K style system the cost to the city to keep senior leadership would be substantially less so the district likely wouldn't let good folks go in times <<<

401K plans are no panacea. People have no clue how much they are paying.

http://www.law.illinois.edu/elderlaw/issues/vol_15/num_2/pdfs/Hutcheson.website.pdf

http://www.usatoday.com/money/perfi/retirement/2009-08-24-401k-retirement-savings-fees_N.htm

http://www.shrm.org/hrdisciplines/benefits/Articles/Pages/HighFees.aspx

The defined contribution options for government employees (457 plans) are worse.

I like defined benefit plans but all parties need to understand what they heck they are promising or demanding.

I will not be able to respond any posts, maybe over the weekend but likely I will be somewhere with my toes in the sand.

 

[Henry Apfelbach]

Buzz, I am not a numbers guy but did some more research and the return history of the plan is from Oct 2003, To Oct 2004: 10.96% 04-05: 12.32% 05-06: 9.12% 06-07: 15.75 07-08: -17.77% 08-09: 4.99% 09-10 8.35%. I was told that at the halfway point in this year it was at a little over 9%. I recieved these numbers from the Fund Monitor The Bogdahn Group. Buzz, since your a numbers guy I will let you figure the average return. To that point though I am still missing the first couple of years and will endeavor to find them. The way it was explained to me is this needs to average 8% over 30 years for the assumption to work. Buzz, enjoy the sand.