Tuesday, April 28, 2009

CRRA money: fund pensions and bulky waste

From the NHRs Luther Turmelle:

The five towns in the consortium served by a trash-to-energy plant in Wallingford now have considerably more money in their bank accounts after The Connecticut Resources Recovery Authority distributed a $26.67 million surplus.

The CRRA wired the money Monday morning from its bank account into the accounts of Cheshire, Hamden, Meriden, North Haven and Wallingford, said Paul Nonnenmacher, a spokesman for the quasi-public agency in Hartford....

The distribution by town is: Cheshire: $3,471,075; Hamden: $6,010,094; Meriden: $5,953,740; North Haven: $4,036,328; and Wallingford: $7,203,342.

Anyone think this money would be appropriately spent on bulky waste? I think so.

I also think the Town should use this money to begin offering employees and former employees a pension buyout plan. For instance, I'd have an actuary determine the estimated remaining benefits to existing retirees, then offer that as a lump sum payment to terminate benefits.

The upside to employees? You get the money in hand and can pass it to your heirs.

The downside to employees? No continued payments for life.

The upside to taxpayers? Budgetary certainty.

The downside to taxpayers? If the payment was extended to and accepted by too many employees at once, you could have a huge momentary swing in the budget.

Basically, this idea is just an extension of my belief that the Town should be moving from Defined Benefit Pension Plans to Defined Contribution Pension Plans because DBs have a great deal of uncertainty for the taxpayers and provide an opportunity to manipulate and deceive. Don't get me wrong, I'm not saying that happens in Cheshire. But let's look at the state to understand my concern.

Have you heard about the former state employees who "double dip?" Here's an example:

An employee makes $100,000 per year. S/he retires and collects a pension for $60,000 per year. The following day, s/he is rehired for $45,000 per year.

And the politicians brag about the $55,000/yr "savings" they found! But you and I know that expenses actually increased by 5% or $5,000/yr.

Again, I'm not saying that happens in Cheshire. But I'm not comfortable allowing such opportunities to exist. My preference is to eliminate such opportunities. Moving away from DBs to DCs would require the Town to address expenses as they are incurred... not 30 years down the road.

I think this CRRA money offers an opportunity to begin closing the door on the DB plans. And on a related topic, there's a Pension Board meeting tomorrow at 6pm at Town Hall.

Tim White


Anonymous said...

Yeah, I think with over 3 million the TC can put the bulky waste back into the budget.

Anonymous said...

Look out...Florio may try to claim that.

Anonymous said...

So an employee with a 60k pension, with life expectancy of 15 years would recieve a lum sum of 900k. or almost 1/3 of the money from the pay out. And that is one employee. Also, with the "doulble dipping" the employee recieves the pension (that he/she has contributed to for 25-30 years), and comes back to the Town in some capacity at a largely reduced salary. The town gets a fully trained, obviously loyal employee at a reduced salary, while the employee can maintain his/her quality of life while drawing his/her accrued pension to which they gave up to 8% oh thier salary for half thier life. Dosent sound like its as bad as you make it out to be.

Anonymous said...

Seems to me that the CRRA money came from small over payments by tax payers over many years. Now that the money is about to be returned why not just give it back directly to the town tax payers as a credit against their next tax bill?

tim white said...

Dosent sound like its as bad as you make it out to be.I'm not looking to favor either employees or taxpayers. I'm trying to eliminate the old governmental trick of making promises today that will be fulfilled by the next generation.

tim white said...

4:58 Tax cuts are great. But I also want to address all of the town's long-term liabilities. They're similar to the federal govt's SS and Medicare and the state govt's postretirement bene's... they're all ticking time bombs that gov't believes we'll "grow our way out of." Whether it's true or not, I don't agree with that method of governing.

Anonymous said...

Just give the money to the teachers, they'll get it anyway.

Anonymous said...

Tw said "Tax cuts are great. But I also want to address all of the town's long-term liabilities."

This one voter is betting that in the end the municipal unions along with the TC majority will find new, creative, and ever sneakier ways to part tax payers from their hard earned cash. So worrying about fixing things which are ticking financial time bombs can always be fixed by the tax payers in the future through normal means unless by some stroke of luck something fundamentally changes.

Therefore whenever the town receives a present of previously spent money being returned to it WHY NOT JUST GIVE IT DIRECTLY BACK TO THE TAX PAYERS FROM WHOM IT WAS ORIGINALLY TAKEN? There seems to be too many people in local government who believe they have found even more money to spend on whatever they see fit.

And of course there is the big view question of just why after the CRRA project has run its course it becomes clear the towns were over charged. Guess maybe everyone was focusing too much on loans to ENRON back in the day? Ever wonder what the rating firms were telling the towns, the state, and CRRA about the ENRON/CRRA loan deal?

Anonymous said...

"municipal unions along with the TC majority will find new, creative, and ever sneakier ways to part tax payers from their hard earned cash"---So municipal employees are just given thier paychecks?? do they not work hard? They all pay taxes as well. Private industry personnel would do well to not throw stones in glass houses. These employees work very hard to provide necessary services to the public and are proud of the work they do. They should not be targeted because the economy is poor. Most of the employees in Cheshire are underpaid comparibly to like towns (Newington, West Harford, South Windsor, Simsbury - these are the towns used to compare apples/apples)
Next time you choose to belittle the public sector, ask a police officer how much it was worth to tell a person that thier loved one was killed in a crash, or How well they sleep after seeing a child injured in an accident. Please, put a price on that for me. And dont bother with the "thats the job they chose", as bankers chose banking and have to take the good with the bad also.

Anonymous said...

"Most of the employees in Cheshire are underpaid comparably to like towns (Newington, West Harford, South Windsor, Simsbury - these are the towns used to compare apples/apples) "

Comparing the pay checks of workers in one town to another is like comparing apples to oranges. The comparison also needs to look at stuff like mill rate, town industrial base, condition of town infrastructure, form of government etc.

I'm betting that this town leads the pack in some very wasteful practices. How many other state towns have the great invisible plastic pool bubble along with its massive annual heating bill? How many towns have an electric high school heating system? How many other towns have increasing teacher employment with decreasing student base? How many other towns have changed zoning rules which would allow for life style center developments that didn't show up? How many other state towns allowed for a mall that never showed up? How many other towns have a large number of town employees who need town supplied vehicles 24/7 while they reside outside of town?

And don't forget, if there were higher paying jobs which current town employees could qualify for they'd be gone in a flash.

In fact this town has a number of good employees and many town employees recognize that finding a better job might be almost impossible. Why else would the current job longevity statistics exist.

Robert DeVylder Jr said...

Those towns were chosen because they are towns like Cheshire. They do have comperable populations, government, area, taxes etc. Other towns DID have the big ineffecient bubbles but replaced them due to costs to operate. As progressive as Cheshire is, we are not the first or only town to allow take home vehicles. I know that there are officials from other towns that live in Cheshire and have a car from their municipality.
I was also wondering if you were refering to the mall and lifestyle center that is still in the planning stages or are you referring to the Apple Valley Mall from 25 years ago?
About 2 months ago, there was an article in the Record Journal about police pay. Cheshire is the lowest paid dept in the area. For those that are interested in public service jobs, you apply and test to every town you can. When a town like Cheshire (a low paying town) offers you a job, you take it, go to the academy (on our dime) and reapply everywhere again as a certified police officer. Then you are better qualified, have a better chance of being hired, and can earn as much as 25,000 more immediatly. Unfortunatly for Cheshire, we have to hire and train another officer and pay for the academy again. If we were to pay the officers more, we would actually save money.

Anonymous said...

RD Jr seems to be missing a point. A very large number of municipal employees wind up collecting very expensive pension payments from this town. Must be that they have stayed a very long time. In fact maybe from the tax payers' viewpoint too long.

Training them so they can more or less leave after just a couple of years might in fact be cheaper then keeping them for 25 to 35 years and getting stuck with unbelievable pension and medical payouts for life.

Let's not forget too that quite often when an older employee retires the town one way or another replaces the retiree. So, the town pays monthly pension plus monthly medical for the retiree. The town also pays for a new hire, the town pays for training the new hire and also pension for the new hire and medical for the new hire. It can be very expensive.

As for the MRJ police pay article there is a quick solution for town police wanting a bigger pay check. It is apply for and get a job as a police officer in places that pay more. On the other hand it would just be easier to whine and whine till the local politicians throw more jelly beans your way.

Anonymous said...

"number of municipal employees wind up collecting very expensive pension payments" - almost all municipalities pay pensions to retiree's, the retirees also contribute their salary towards thier pension. So your argument is weak.
Pensions in the public sector are the balancing point for low salary. But when an officer of 15 years (obviously still a vaible officer while not staying "too long" is making 10k less than his equal counterpoint in a neighboring department, there is something wrong. This town does not treat its employees fairly, this assures its administators and teachers are of the highest pay.

Robert DeVylder Je said...

Hiring a public works maintainer, a town manager, or even a teacher does not cost the town anything more than the salary and benifits. Police officers need to be trained and certified by the state police academy. That cost about $5,000 per officer on top of salary while training, uniforms, overtime to cover the person in training and benifits. If the officer leaves shortly after being certified, the town has to start all over again while getting zero return for the investment. If we increase the base pay, we can save money by not having to pay for the academy and overtime coverage.

Robert DeVylder Jr said...

Speaking of waste pickup, what were the winning bids for trash hauling?

Anonymous said...

9:36 am misses the bigger picture, anyone who is qualified to be making substantially more at some other job just down the street should head down the street for the higher paying job.

This is America, land of the free. Free people can exercise their own will to head on out to a higher paying job. There is one catch though, to get the higher paying job you need to be qualified, you need to be the best candidate and there needs to be a real opening.

The truth of the matter is municipal workers and their unions are working OT to present an image of incredible shortages of municipal workers. That drives up salaries and benefits.

In reality the supply of replacements is almost too big to imagine. Why just a few weeks ago one Naugatuck Valley town had hundreds of applicants for a single police dept opening. In the non-government sector work-a-day world stuff like that results in wage depression but somehow government workers never seem to suffer from wage depression around these parts any more.

tim white said...

Speaking of waste pickup, what were the winning bids for trash hauling?I haven't gotten the info yet. I understand the bids were either due on April 30... or to be opened on April 30 (so may have been opened yesterday or even not yet).

I'll try to post it (at least the main info - low bids on 1, 3, 5 yr contracts) as soon as I get it.