I've been going back and forth with what I think is a man over email about the El Paso police and fire pension fund. It's an anonymous email and the language suggests to me it's a he, not a she. No matter what I try they won't budge or give me too much more information than what I'm about to post below. It's up to you guys to go figure out the complete back story and confirm where they are going next with the issue.
You may remember a few years ago we voted to save the police and fire pension fund because they squandered it away on God knows what. Well, it appears they're back to being on the verge of not being able to pay their pensioners what they owe them.
Apparently they handed themselves three or four percent Cost of Living Adjustments (COLA) every year since the taxpayers bailed them out. Why do they call it a "cost of living adjustment?" Using the word "adjustment" implies that it may be raised or lowered and we know that they never lower your pay for a cost of living adjustment. Why don't they call it a COLI? Cost of Living Increase is more accurate.
Social Security COLA has been in the last four years - 0,0, 3.8 and 1.7. Most pension funds try to follow that trend. Obviously the police and fire pension board is just voting themselves huge retirement raises every year without realizing that they can't afford it in the long-term... which has become the now-term.
My source says they want council to bail them out. And what better time to ask?
You have the mayor who needs some support and a way to stay relevant.
You have Rep. Steve Ortega who wants to be mayor and could lock in votes for that effort by supporting another bailout.
You have Carl Robinson who will piss away money if the right people get in his ear - and the right people are already in his ear.
Emma Acosta will give away the farm if she thinks it will make her more popular.
Eddie Holguin is like Emma, but better looking. He also needs somebody other than Norma to like him.
Susie Byrd has nothing to lose and nothing but love for the cops and fireman - easy vote for her.
That's five votes and the mayor - it doesn't matter what the other three think.
Mind you, the police and fire unions will be cutting campaign checks to friendly politicos this election cycle. I wonder what one might do in order to receive one of those checks?
Here's the kicker. And by "kicker" I mean a foot right to the taxpayers' collective groin.
The pension board wants to BUY A NEW BUILDING FOR $1 MILLION. They can't pay their obligations, but they'd like to take money out of the underfunded pension and buy a building while asking City Council to spend taxpayer dollars to bail them out. Do I even need to break this down for you? Why doesn't the pension board start using City Council to help compete leveraged buyouts of failing companies? Presi Ortega could arrange the whole deal given he's a financial genius of impeccable ethics.
I can't wait to see how this slides past council without them even questioning it. The political money trough has little water an few open spaces, so it tends to dull the senses of the drinkers - if you know what I mean.
On the topic, is it just me or why does it smell of corruption that Steve Ortega has former city rep Presi Ortega as a Board member of said pension
And the Presi still des city business?
Posted by: Help | January 17, 2013 at 02:28 PM
Not sure if he was appointed by Steve - or because he represents Prudential in this deal he gets a seat at the table.
Presi Ortega had the pension plan business when he represented ING. When he got appointed (then elected) to council (filled Powers' unexpired term) he had to give up his commissions on the ING pension plan premiums. The rumor is that he might have gotten kickbacks of the assigned commissions. FBI went to his offices. ING terminated their contract with him. When the contract came up for bid Presi teamed with Prudential and got the business back.
It may all be innocent - but this council (with the exception of Cook) was not in place when this occurred - so they have no background on Presi Ortega's previous involvement - which means they all might think he's just great.
Posted by: historian | January 17, 2013 at 03:34 PM
David do you have any documents to back this up. As far as bailing them out we have no choice as its the law in Texas. The underfunded portion of the pension funds will soon become part of the citys financial statement. I did ask the question and failed to get an answer regarding how do we produce a balanced budget with $400 million in red ink on our financial statement.
Posted by: LisaT | January 17, 2013 at 07:02 PM
Wasn't Juan Sandoval, the disgraced Tax Assessor, on this board? Go figure.
Posted by: Josie | January 17, 2013 at 08:58 PM
You mean the guy that got blamed for Wilsons handywork. I'll tell you right now nothing Sandavol did wasnt done without Wilsons say so.
Posted by: Wert | January 18, 2013 at 01:18 AM
Purchase of a building by the pension boards is on council agenda this Tuesday. Placed on the agenda by Niland and Noe.
Posted by: Lslsls | January 18, 2013 at 07:31 AM
Well goody. Wonder what an audit of pension board expenses would uncover.
Posted by: Wert | January 18, 2013 at 08:38 AM
Bullshit, Wert. Juan Sandoval listened to no one. He thought he was untouchable. He justified what he was doing as "being the right thing by Juan Sandoval standards". He was turned in by an employee that knew what he was doing was illegal. Juan Sandoval has charm and he used it to his advantage, but look back at council meetings from about 10 years ago. He is a real prima donna and was out of control BEFORE Joyce Wilson was even hired. Get your facts straight.
Posted by: Josie | January 18, 2013 at 08:40 AM
I am in the insurance industry and can tell you that most of his peers view President Ortega as incompetent and if not for his political connections would be broke and/or in prison. He is an embarrassment to the insurance industry. I can't prove anything, but clearly if Presi is getting the business there is a strong likelihood something underhanded is happening. Anyone who thinks Presi would be awarded any insurance related contract based on merit is absolutely clueless!
Posted by: Ken | January 18, 2013 at 10:32 AM
Agree 100% with Ken. The ING thing was a very serious matter and the FBI showed up - but no charges and he still has a license? Wrong! The city has blinders on when it comes to Presi - too many friends on council and within the ranks of City Hall.
Posted by: historian | January 18, 2013 at 01:07 PM
And you want to trust these people with $500MM QOL money?
The required TEFRA hearing to issue the QOL bonds will be a chance for public input that will be of record in the bond indenture. Peppers intends to let the potential investors know about the kind of people they money lending to.
Call it a moose turd on the bond indenture.
Posted by: uired | January 18, 2013 at 02:29 PM
City council doesn't manage/control the Pension Funds per se. They have a Pension Board and there are a couple of city reps that are appointed to that Board. The Pension Board makes decisions on how/what it invests in and apparently on whether to buy a building to house whoever is employed by the Pension Board to count the money.
QOL and Pension Board are not the same animal and not handled the same. Get your facts straight.
Posted by: Lslsls | January 18, 2013 at 03:25 PM
Lslsls: Yes, not handled by same managers, but on same City balance sheet as obligations affecting City financial condition. You folks here keep missing the big picture. There are other taxing entities, too, all milking the same tax base, and investors look at that, too, not just City, since the tax base is the source of repayment.
Posted by: uired | January 19, 2013 at 09:14 AM