Supervisor Josie Gonzales

BY IMRAN GHORI
STAFF WRITER
ighori@pe.com

Published: 24 January 2012 07:08 PM

San Bernardino County supervisors moved forward Tuesday with a proposal to require voter approval of future pension increases but face opposition from employee unions who quickly announced plans for a competing measure aimed at supervisors.

The board agreed to have county staff draft a ballot measure requiring voter approval before retirement benefits for county employees, legislative officers and elected officials could be increased. But final approval is not assured with supervisors split 3-2 on whether to consider the proposal.

Board Chairwoman Josie Gonzales, who cast the tie-breaking vote, expressed serious misgivings but said she would wait until seeing the ballot measure language before making a final decision.

Supervisor Janice Rutherford said the measure allows voters a say in long-term costly financial decisions. For every dollar the county spends on salaries, 27 cents is paid for pension costs for general employees and 47 cents for public safety employees, she said.

“This is simply insurance for the taxpayers who will be footing the bill long after politicians and union leaders are out of the picture,” Rutherford said.

She said she hoped to have the ballot measure ready for the June election. She noted that other counties, including Riverside and Orange, have enacted similar measures.

But leaders for the two largest unions representing county employees said it could hurt the county’s ability to work with the groups in the future.

“Do you not trust your own ability to make decisions you were elected to make?” Bob Blough, general manager of the San Bernardino Public Employees Association, representing about 11,000 county employees, asked them.

Laren Leichliter, president of the Safety Employees Benefit Association, representing about 3,100 public safety employees, echoed those sentiments. He said unions would not be able to trust negotiations with the county, knowing that it could ultimately hinge on an election campaign.

Rutherford said the proposal does not take away employees’ benefits but merely requires them to make the case for any increases to voters. However, only Supervisor Gary Ovitt, who co-sponsored the measure, expressed support.

To read entire story, click here.

Two San Bernardino County supervisors are requesting that benefits for all county elected officials, not just the Board of Supervisors, be reduced to be in line with elected officials in other counties.

Supervisors Neil Derry and Janice Rutherford are pushing for the ordinance, which comes less than two weeks after the board approved a similar ordinance that reduced total compensation for future supervisors by roughly $48,000 annually.

Derry argued that ordinance didn’t go far enough and that benefits for elected San Bernardino County officials far exceed those of officials in comparable Southern California counties.

Rutherford wants county administrators to review compensation for elected officials in Riverside, Orange, Los Angeles, Kern, Ventura and San Diego counties and report back to the board with a draft ordinance.

The county’s other elected officials are: Auditor-Controller/ Treasurer/Tax Collector Larry Walker, Sheriff Rod Hoops, District Attorney Michael A. Ramos and Assessor/Recorder/County Clerk Dennis Draeger.

If such an ordinance is adopted, benefits would remain at a level necessary to attract candidates to run for office, according to a report prepared for the board.

Derry voted for the benefits cuts to supervisors at the Jan. 10 board meeting but argued the cuts should apply to all elected officials in the county, whose benefits far exceed those of their counterparts in Riverside, San Diego, Orange, Los Angeles, Kern and Ventura counties.

For example, Walker has a benefits package totaling $178,364, while his counterparts in Riverside County bring home less than half that amount in benefits: $73,105.

Draeger collects $151,694 in benefits annually, while his counterpart in Riverside County collects $73,105.

To read entire story, click here.

San Bernardino County Auditor/Controller/Treasurer-Tax Collector Larry Walker

BY IMRAN GHORI
STAFF WRITER
ighori@pe.com

Published: 21 January 2012 05:49 PM

After slashing their own benefits earlier this month, San Bernardino County supervisors on Tuesday will start taking aim at extra compensation for other county-wide elected officials.

The board will vote on a proposal by Supervisors Janice Rutherford and Neil Derry to direct the county administrative and counsel offices to prepare an ordinance that would cut benefit packages for the assessor-recorder, auditor/controller/treasurer-tax collector, district attorney and sheriff. If a majority of supervisors agree, the ordinance will return to the board at a future meeting for a vote.

The agenda item does not provide a specific amount to cut but seeks to bring benefits, which include supplemental retirement and medical payments and car and cellphone allowances, in line with comparable Southern California counties.

“It’s very clear from the information we have already, our benefits are out of line for all elected officials,” Derry said.

Supervisors’ benefits were cut by about $48,000 — a 39 percent reduction — in the ordinance, which will return for a second reading Tuesday. A survey of supervisors’ compensation in surrounding counties found that San Bernardino officials received the second highest salary and benefits among seven Southern California counties.

A similar draft study comparing the other four elected officers with their counterparts found that for all but one of those positions, San Bernardino County paid the highest amount of benefits in the region and twice as much as Riverside County in some instances.

In San Bernardino County, the assessor-recorder receives an annual salary of $204,352 plus $151,694 in benefits. By comparison, Riverside provides $73,105 in benefits and Los Angeles, the second highest, offers $132,386. The average benefits paid in Ventura, Los Angeles, Riverside, Kern and San Diego counties is $97,440.

For the auditor/controller/treasurer-tax collector, San Bernardino pays an annual salary of $252,288 plus $178,363 in benefits. Riverside pays $73,105 in benefits while Los Angeles provides $141,769 in benefits. The five-county average is $96,536.

San Bernardino County pays the district attorney $208,458 in annual salary and $152,821 in benefits. Riverside provides $86,869 in benefits while Los Angeles offers the highest in the region, $181,762. The five-county average is $117,826.

To read entire story, click here.

Tuesday, January 10, 2012 – 11:25 a.m.

The San Bernardino County Board of Supervisors, while adopting cuts to their own benefits package, wouldn’t go near a proposal by Third District Supervisor Neil Derry to have the cuts apply to all of the county’s elected officials on Tuesday morning.

Derry was unable to obtain even a second to his substitute motion to include Sheriff-Coroner-Public Administrator Rod Hoops, District Attorney Michael Ramos, Auditor-Controller-Treasurer-Tax Collector and Assessor-Recorder Dennis Draeger in the reductions.

Supervisors Josie Gonzales and Gary Ovitt spoke in favor of delaying any action and to have the matter studied further.

Gonzales also spoke in favor of not cutting benefits of the other officials.

Even though the county human resources staff had already completed a survey of surrounding counties.

It doesn’t take a rocket scientist to figure out the reason the supes are afraid.

But, Ovitt did state for the record to the county-wide officials that no one is elected to public office for the money, but to serve the taxpayers.

Supervisor Janice Rutherford commented that the benefits of the others also appeared out of line.

The approved cuts are indeed a long time in coming and will save county taxpayers about a quarter-million dollars per year.

Tuesday, January 10, 2012 – 08:30 a.m.

The San Bernardino County Board of Supervisors will consider slashing their own lavish benefits package Tuesday morning.

A benefits package unmatched anywhere in the state and possibly country.

The key being their “own” benefits.

Supervisors have been reluctant to apply the same cut to the offices of Sheriff-Coroner-Public Administrator, District Attorney, Auditor-Controller-Treasurer-Tax Collector, and Assessor-Recorder.

All high-paying positions.

Supervisors appear fearful of backlash from certain members of the group.

The county has examined the compensation of the four countywide elected officials and the results show the need for the same reduction.

Will it happen?

Probably not.

By Mark Gutglueck
Friday, January 6, 2012

Questions continue to dog the second highest ranking member of the county auditor-controller/treasurer-tax collector’s office with regard to the role he and a political action committee he controlled played in illegally passing through and laundering money for those convicted of or charged with participation in a bribery and extortion conspiracy.

At issue is how Matt Brown, a former member of the Republican Central Committee and the one-time chief of staff to former Second District San Bernardino County supervisor Paul Biane, has been able to avoid being criminally charged after he became entangled in a set of circumstances that led to the indictment of Biane, as well as another former member of the board of supervisors, Bill Postmus, together with the chief of staff to another supervisor, a one-time county employee union president and the businessman accused of bribing them.

Brown was moved into the position of assistant county auditor-controller in 2010 by county treasurer/auditor-controller Larry Walker. Brown is also the founder/principal of two political action committees, the San Bernardino County Young Republicans and the San Bernardino County Taxpayers Association.

In 2006, Brown, who was then supervisor Biane’s senior staff member, founded a political action committee (PAC) to assist Biane and other members of Biane’s political circle in distributing money to politicians they supported. That PAC, known as the San Bernardino County Young Republicans, has been alleged by the California Attorney General’s Office and the San Bernardino County District Attorney’s office to have been used as a vehicle to launder bribes and kickbacks to Biane.

During the first year of its existence, the San Bernardino County Young Republicans PAC had raised $7,500. In November 2006, Biane joined with his then-colleagues on the board of supervisors, Bill Postmus and Gary Ovitt, to approve a $102 million payout to Rancho Cucamonga-based Colonies Partners to settle a lawsuit that company had brought against the county over flood control issues at the Colonies at San Antonio residential subdivision and Colonies Crossroads commercial subdivision projects in northeast Upland. Supervisors Josie Gonzales and Dennis Hansberger opposed that settlement.

Campaign finance records show that the San Bernardino County Young Republicans PAC, received a $100,000 check from Colonies Partners, L.P. on June 17, 2007. In two separate indictments, one returned by a criminal grand jury in February 2010 against Postmus and his one time political associate Jim Erwin and in another indictment returned in May 2011 against Biane, Erwin, Colonies Partners managing principal Jeff Burum and the former chief of staff to supervisor Ovitt, Mark Kirk, it was alleged that Biane actually controlled the San Bernardino County Young Republicans PAC through Brown and that the $100,000 donation was a quid pro quo paid in exchange for Biane’s vote to approve the settlement. Also delineated in the February 2010 indictment were five unindicted co-conspirators identified as John Does 1 through 5, who are identifiable through information contained elsewhere in the public record including the superseding May 2011 indictment as Colonies Partners managing principals Burum and Dan Richards; Colonies Partners public relations consultant Patrick O’Reilly; Kirk; and Biane. According to prosecutors, Postmus controlled two political action committees, the Inland Empire PAC and the Conservatives For A Republican Majority PAC, which each received separate $50,000 donations from the Colonies Partners principals which were also bribes. Erwin’s Committee For Effective Government PAC likewise received a $100,000 donation from Burum and Richards that was a bribe, according to prosecutors; and Kirk’s Alliance For Ethical Government PAC received a $100,000 contribution from Burum and Richards that was also a bribe, per the indictment.

Postmus last March pleaded guilty to the five felonies alleged against him in the February 2010 indictment, including conspiracy, one count of accepting a bribe, one count of conflict of interest, and one count of misappropriation of funds.

Postmus in April was the star witness before the second grand jury which indicted Burum, Biane and Kirk and reindicted Erwin. Erwin, who served as assistant assessor under Postmus after the latter was elected to that post in 2006 and took office in 2007, continues to maintain his innocence on the charges stemming from that case, including conspiracy, two counts of corrupt influencing, two counts of offering a bribe, two counts of extortion, one count of misappropriation of public funds and one count of forgery. Biane, Kirk and Burum maintain their innocence. As of yet, no charges have been filed against Richards or O’Reilly.

The indictments allege that Burum in 2006, with the assistance of Erwin and O’Reilly, had brochures prepared which purported that Postmus, who was then the chairman of the board of supervisors as well as chairman of the San Bernardino County Republican Central Committee and was running for county assessor, was a homosexual who was addicted to methamphetamine, and that Biane, who was then the vice chair of both the board of supervisors and the Republican Central Committee and at that time engaged in an election campaign, was teetering on the brink of bankruptcy. Burum’s company, the Colonies Partners, had filed a lawsuit against the county in 2002 over flood control issues at the companies Colonies at San Antonio development in northeast Upland. Ultimately, Burum withheld the mailing of those brochures. It was three weeks after the November 2006 election, in which Postmus and Biane were elected and reelected, that the board of supervisors voted 3-2 to confer the $102 million settlement on the Colonies Partners. The indictments allege that the series of $100,000 donations to the political action committees founded and controlled by Postmus, Brown, Kirk and Erwin were in fact quid pro quos — bribes — paid in exchange for the approval of the settlement. Prosecutors allege that Biane, through Brown, secretly controlled the San Bernardino County Young Republicans PAC.

The Sentinel is informed that a complaint has been filed with the state Fair Political Practices Commission citing a PAC founded by Brown in 2008, the San Bernardino County Taxpayers Association, which is separate from the San Bernardino County Young Republicans PAC alluded to in the indictments. According to well placed sources, both the San Bernardino County Taxpayers Association and the San Bernardino County Young Republicans PAC were involved in the activity now under further investigation.

On March 17, 2008, Brown formed the San Bernardino County Taxpayers Association PAC and named J.M. Olchawa as the PAC’s treasurer. Both Brown and Olchawa are residents of Grand Terrace. Olchawa endowed the PAC with its first operating capital in the form of a $100 contribution. Less than a month later, on April 9, the San Bernardino County Young Republicans PAC contributed $40,000, which had apparently originated with the $100,000 contribution from the Colonies Partners the previous year, to the San Bernardino County Taxpayers Association PAC. The following month, on May 29, 2008, one of the political action committees controlled by Postmus, the Inland Empire PAC, infused the San Bernardino County Taxpayers PAC with $3,000 and the month after that, on June 2, 2008, with another $2,000. That $5,000, too, had apparently been originally provided by the Colonies Partners.

In the less than two month period between the $40,000 contribution from Brown’s own Young Republicans PAC on April 9 and Postmus’ Inland Empire PAC’s $2,000 donation on June 2, the San Bernardino County Taxpayers Association PAC received a substantial amount of money in the form of both contributions and loans, all from other political figures. On April 25, 2008, the Committee to Elect Paul Biane gave the San Bernardino County Taxpayers Association PAC a $15,000 contribution. On April 29, 2008 the Committee to Elect Dick Larsen provided the San Bernardino County Taxpayers Association PAC with a $10,000 loan. Larsen was then the county treasurer. On May 5, 2008 the Committee to Elect Gary C. Ovitt made a $15,000 contribution to Brown’s San Bernardino County Taxpayers Association PAC. That money may have originated with the Colonies Partners before being provided to Kirk’s Alliance For Ethical Government PAC and then being provided to Ovitt. On May 9, 2008, the Josie Gonzales for Supervisor campaign provided a $15,000 contribution to the San Bernardino County Taxpayers PAC. On May 16, 2008, Bill Emmerson for Assembly 2008 made a $5,000 contribution to Brown’s recently formed PAC. The same day, the San Bernardino Public Employees Association PAC provided Brown’s PAC with a $10,000 contribution. On May 23, 2008, the Committee to Elect Gary C. Ovitt provided Brown’s PAC with a $10,000 loan. On May 27, 2008, the Hansberger for Supervisor Committee made a $25,000 contribution to the San Bernardino County Taxpayers Association PAC. The next day, May 28, the Paul Cook for Assembly 2008 Committee provided Brown’s PAC with a $5,000 loan. The same day, the Committee to Elect Paul Biane

made a $10,000 loan to Brown’s PAC. On May 29, Bill Emmerson for Assembly 2008 made a $5,000 contribution to the PAC and on June 2, 2008, the Hansberger for Supervisor Committee made a $15,000 contribution to the San Bernardino County Taxpayers Association PAC.

The lion’s share of the money Brown’s PAC took in was used to fund Hansberger’s effort to be reelected as county Third District supervisor that year. According to campaign disclosure documents, the San Bernardino County Taxpayers Association PAC on May 18 provided the Hansberger for Supervisor Committee with $57,030.70 and on June 30, 2008, more than three weeks after Hansberger had lost the election to Neil Derry on June 3, Brown’s PAC gave the Hansberger for Supervisor Committee $100,920.29.

The Fair Political Practices Commission is now investigating the lack of any subsequent accounting for the $35, 000.00 in loans made to the San Bernardino County Taxpayers Association PAC by the Larsen, Ovitt, Cook and Biane campaign committees. All references to those loans disappeared from subsequent campaign filing statements made on behalf of the PAC by Olchawa. The loans in question appear to be outstanding. No explicit reference to repayments to any of the lending parties can be found in any of the San Bernardino County Taxpayers Association PAC’s financial disclosure statements. While the online filing made by the Committee to Elect Gary Ovitt shows an outstanding loan of $10,000 to the San Bernardino County Taxpayers Association PAC committee as of 12/31/2010, online filings for the other lending parties were not immediately available. There is no indication in any available documentation showing any of the loans were repaid.

The lack of repayment, and lack of accounting of the still existent outstanding loans or failure to note the loans were forgiven is alleged to be multiple violations of the Political Reform Act. Moreover, the lack of notation of the loans might suggest that the funds received by the committee during the 2008 electioneering season from the Larsen, Cook and Biane campaigns were being laundered for Hansberger, according to the complaint received by the FPPC.

Another issue in the complaint and the follow-up FPPC investigation is the connection between the PAC and the Hansberger Campaign, which contributed money to the PAC and was also the major beneficiary of the PAC’s expenditures. In this way, money provided to Brown’s PAC is suspected of having been used to attack Derry without adequate disclosure of the origin of that money. Those mailers sent out attacking Derry did not disclose that Hansberger’s campaign was involved in funding them.

Many familiar with Brown’s role in the Colonies matter have questioned why prosecutors did not seek and obtain from the grand jury an indictment of Brown. The indictment itself describes how the political action committee he founded and controlled served as a laundering vehicle through which bribes allegedly provided by Burum were passed, action virtually indistinguishable from that engaged in by the indicted Kirk, another chief of staff to a board member who voted to approve the Colonies settlement.

Brown was one of 45 witnesses who testified before the grand jury this spring before it handed down the indictment naming Burum, Biane, Kirk and Erwin. In that testimony Brown said SEBA, the sheriff’s deputies union that Erwin once headed, had promised to provide, but then failed to come through with, backing for a countywide measure Biane was sponsoring in 2006 to boost the pay for county supervisors. An examination of campaign reporting documents and other material, however, indicates that SEBA in fact did support the Biane-backed proposal, known as Measure P, which passed, resulting in an immediate $22,000 annual increase to supervisors’ salaries. Prosecutors declined to say whether Brown’s misstatement of fact before the grand jury constituted perjury. No charges have been filed against him.

A possible explanation of how it is that Brown has avoided prosecution on several counts is that he has been working as an informant for the district attorney’s office. It is known that beginning in 2009, Brown began wearing a “wire,” that is, a hidden electronic audio device at work while he was serving in the capacity of Biane’s chief of staff. Reportedly, the target of this effort was Biane himself. To date, no incriminating statements by Biane on any of those tapes have surfaced or been produced by the prosecution, despite requests by defense attorneys for their production. Transcripts of some of those conversations have been turned over to defense attorneys.

At some point in the spring of 2010, Biane became aware that his chief-of-staff was seeking to entrap him. There ensued strained relations between the two and Brown was put on paid leave after he filed a claim in which he alleged he was being harassed. Brown was then transferred to the county treasurer/auditor-controller office under Larry Walker.

Walker installed Brown as his second-in-command, i.e. as the assistant auditor-controller. In so doing, Walker ousted his longtime assistant and close associate Betsy Starbuck, who was ignominiously sacked after having served more than twenty years as Walker’s right hand woman, both when Walker was Fourth District supervisor, the position he held before he ran for auditor-controller, and as auditor controller.

The displacement of Starbuck, who after more than eight years in the position of assistant auditor-controller practically ran the division, to accommodate the inexperienced Brown has sparked a widespread belief in the halls of the county that the move was imposed on Walker by county chief executive officer Greg Devereaux and district attorney Mike Ramos as part of an effort to protect a witness seen as crucial to the prosecution of the Colonies settlement criminal case. Collectively and individually, Walker, Brown, Devereaux and Ramos were unwilling to comment on the matter.

Sunday, December 4, 2011 – 12:30 p.m.

Now San Bernardino County supervisors want to cut their benefits package again.

They shouldn’t think twice about.

The benefits package afforded the county’s elected officials is the richest in the state, and can be adjusted by a mere majority vote of the supervisors.

Interestingly, the last time the Board of Supervisors voted to cut the benefits of all elected’s, they had to be shamed into it.

It’s still uncertain as to whether or not county supervisors will actually go through with it. Since the proposed ordinance will not come back to the body until sometime next year.

It should be noted that it doesn’t really take any time or effort to make changes to the county’s exempt compensation plan and related ordinance.

How about as little as two weeks?

This new proposal was brought forward by Second District Supervisor Janice Rutherford. So far Rutherford has made several grandiose proposals attracting her positive press coverage. But, so far, those proposals have failed to materialize into official actions.

The newly-proposed cuts won’t affect anyone currently seated, unless the individual official accepts the cuts voluntarily.

Any new changes would only take effect on the official assuming a new term of office.

Another interesting twist is the fact the supe’s appear resistant to cutting the benefits packages of Assessor-Recorder Dennis Draeger, Auditor-Controller-Treasurer-Tax Collector Larry Walker, Sheriff-Coroner-Public Administrator Rod Hoops and District Attorney Michael Ramos.

The four represent the highest-paid elected officials in the county, and any cuts to countywide elected officials is either all-or-none..

Earlier this year, Ramos and Hoops declined to accept voluntary pay cuts that all other officials agreed to.

It’s uncertain as to whether Draeger will seek a second term. Walker, who is on pace to be the county’s highest paid retiree, is likely to seek reelection. And all in-the-know say Hoops will not seek a second-term, and may actually want to get out of town early. Ramos currently intends on running again, unless another opportunity comes up. It’s no secret Ramos has aspirations for higher office.

The resistance to cutting the compensation of the countywide’s is no secret. Sources, both inside and outside the county government center, say some supervisors want nothing to do with cutting the compensation of Hoops or Ramos out of fear of retaliation.

Ramos, who never seems to be able to make enough cash, reportedly pretty much blew a gasket when Third District Supervisor Neil Derry was able to push through limited cuts prior to his (Ramos) assuming a new term of office.

Derry, for his efforts, ended up being on the receiving end of a criminal complaint and booking number, via former Senior Assistant Attorney General Gary Schons, and courtesy of an investigation conducted by Ramos’ Public Integrity Unit.

Schons, who had developed a close relationship with Ramos, now works as a Deputy District Attorney in the San Diego County District Attorney’s Office.

Joe Nelson, Staff Writer
Posted: 11/12/2011 06:12:51 AM PST

The ways money flowed to candidates and political action committees and alleged acts of blackmail are detailed in search warrants in San Bernardino County’s $102 million legal settlement with Rancho Cucamonga developer Colonies Partners LP in November 2006.

The warrants, released last week, also describe what led authorities to suspect a county supervisor’s former chief of staff of criminal activity before he became a witness for the prosecution.

The settlement ended nearly five years of legal battle over flood-control easements at Colonies’ 434-acre residential and commercial development in Upland.

In May, state and local prosecutors charged Colonies co-managing partner Jeff Burum, former county Supervisor Paul Biane, former Assistant Assessor Jim Erwin and Mark Kirk, former chief of staff for Supervisor Gary Ovitt, with criminal conspiracy, conflict of interest and other charges in a corruption case they are calling the biggest in county history.

The four are accused of conspiring to facilitate the historic settlement, in the developer’s favor, in exchange for bribes and political favors. All four deny any wrongdoing.

PAC contributions

Within a year of the settlement, Colonies Partners contributed a total of $400,000 to five political action committees prosecutors say were controlled by the three supervisors who voted in favor of the settlement – Bill Postmus, Biane and Ovitt – or members of their staff.

Three of the political action committees – Alliance for Ethical Government, San Bernardino County Young Republicans and the Committee for Effective Government – each received $100,000 contributions from Colonies. Kirk controlled the Alliance for Ethical Government PAC, Biane’s chief of staff Matt Brown, the San Bernardino County Young Republicans PAC, and Erwin, the Committee for Effective Government PAC, prosecutors allege.

Postmus controlled the Inland Empire PAC and Conservatives for a Republican Majority PAC, each of which received $50,000 contributions from Colonies following the settlement.

In March, Postmus, who is also the former county assessor, pleaded guilty to charges stemming from the Colonies case and a separate case in which he admitted to running a political operation out of the Assessor’s Office at taxpayer expense. As part of a plea bargain, he has agreed to turn state’s evidence in exchange for reduced charges.

Postmus’ longtime aide and protege, Adam Aleman, pleaded no contest in June 2008 to felony charges related to the Assessor’s Office scandal, including falsifying minutes to executive meetings for the Grand Jury and destroying evidence in the investigation, i.e. the hard drive of a county-owned laptop computer.

Aleman has also agreed to testify against defendants in the Colonies’ and Assessor’s Office cases as part of a plea bargain. He approached investigators five months after his arrest saying he had information about the controversial Colonies settlement.

Money trail

Within a year of receiving the contributions from Colonies Partners, money flowed from the PACs to political campaigns and activities directly related to those who controlled the PACs, according to the search warrants.

Brown’s PAC doled out more than $11,000 to Biane’s campaign for supervisor. More than $11,000 was doled out to Brown’s campaign for the Republican Central Committee, and more than $2,600 in expenditures were taken from the PAC for fundraising events and travel and lodging expenses for Brown and his wife, according to the warrants.

Kirk’s Alliance for Ethical Government contributed $10,000 to Gary Ovitt’s campaign for supervisor and $3,200 to Ovitt’s campaign for Republican Central Committee. In addition, five contributions totaling more than $1,700 were made to the campaign of Ovitt’s wife, Sue Ovitt, for a spot on the Republican Central Committee, and 11 contributions totaling more than $7,000 were made to Kirk’s campaign for the Central Committee.

To read entire story, click here.

Spencer

Joe Nelson and Josh Dulaney, Staff Writers
Posted: 11/01/2011 05:59:53 PM PDT

Embattled San Bernardino International Airport developer Scot Spencer has racked up roughly $545,876 in delinquent property taxes since 2005, of which $31,618 has been seized by the county tax collector.

According to records provided by the county Tax Collector’s Office, Spencer began defaulting on his property taxes in 2005, when he first contracted to develop the airport. He owes $194,140 from that year, records show.

Spencer, who did not return repeated telephone calls seeking comment, continued that trajectory over the next four years. He now owes a total of $544,876, officials said. Last week, collections officers seized $31,617.51 from Spencer.

County Tax Collector Larry Walker said the taxes Spencer owes – unsecured property taxes – are the most difficult to collect.

“We’ve been able to get $30,000 from Mr. Spencer or related entities,” Walker said, “and we’re going to continue to work every possible option in terms of attempting to collect the full obligation from him.”

An unsecured property tax is one that is not secured by real property such as a piece of land, and liability falls solely on the person or entity assessed for the tax.

Spencer’s back taxes are for space and equipment, including aircraft, at a hangar at 255 S. Leland Norton Way.

As of Tuesday, Spencer had made no additional payments to the Tax Collector’s Office, said Matt Brown, assistant tax collector.

Property tax is not the only financial problem facing Spencer, who served five years in a federal prison for bankruptcy fraud involving a former soured airport deal.

According to Mike Burrows, the assistant airport director, Spencer owes roughly $650,000 in rent on buildings and hangars at the airport, including Million Air, the Houston-based provider of terminal and fueling services for private aircraft.

“It’s pretty substantial and we’re obviously working to enforce those contracts,” Burrows said. “We’ve got late fees and interest charges.”

Burrows said the airport has begun the process of working through the rental agreements, each of which have their own timelines for settlement, given the terms and conditions.

“Then our commission,” he said, referring to the San Bernardino International Airport Authority board, “will need to make a decision about what enforcement actions they’ll need to take.”

To read entire story, click here.

Spencer

BY KIMBERLY PIERCEALL
STAFF WRITER
kpierceall@pe.com

Published: 26 October 2011 07:00 PM

San Bernardino County tax collectors have seized $31,618 from the developer of San Bernardino International Airport and his related businesses, a fraction of the $544,876 he owes in property taxes, according to the county agency.

The developer, Scot Spencer, is the focus of an FBI-led investigation surrounding the airport.

Larry Walker, San Bernardino County’s auditor-controller/treasurer/tax collector, wouldn’t say how his tax collectors had found money seized so far, saying that divulging details might affect his staff’s advantage in finding more without Spencer’s cooperation.

“He’s certainly aware that he owes the money,” Walker said, adding that Spencer and his companies have received bills for some time.

He said speed and confidentiality going forward will be key to recouping the amount still owed by Spencer and his related companies doing business at the airport. Walker called the amount one of the highest his office has seen.

In an emailed reply to questions Wednesday, Spencer disputed that he hadn’t cooperated with tax collectors or that he owed what they say he owes.

“Our counsel has reviewed what appear to be material and significant errors in the County Tax Assessments and we have referred them to counsel to get the errors corrected,” he wrote. “As has always been the case we are committed to insuring that the correct property taxes are paid.”

In his sublease agreements with tenants, a provision passes the property tax obligations to the subtenant. Several of those subtenants have gone out of business, and only Spencer’s entities are named with the tax collector.

The debt has stacked up since at least 2005. Spencer was awarded two agreements to develop most of the airport at the former Norton Air Force Base in 2007. He earned a fee for every construction contract awarded. The cost to build a passenger terminal and luxury general aviation hub grew from $45million to $142.5 million in the last four years.

Walker said it hurts all taxpayers when others don’t pay their taxes.

To read entire story, click here.

Walker

By Andrew Edwards Staff Writer
Posted: 08/12/2011 06:06:15 PM PDT

It is hard to predict the longterm consequences of Standard & Poor’s downgrade of the San Bernardino County Investment Pool, county Treasurer Larry Walker says.

But no immediate difficulties are seen for agencies using the multi-billion dollar fund, he said.

“The best answer as to how it will affect them is time will tell,” Walker said. “We’re talking about uncharted waters here.”

The San Bernardino County Investment Pool holds money for school districts, community colleges, water districts and other special districts in the county.

The new, lower rating may not necessarily spell new financial troubles for schools and other public agencies, but it is a symptom of the broader economic uncertainties, leaving administrators wondering if their budgets will shrink further.

“I don’t see the downgrade affecting our district,” said Kim Stallings, the deputy superintendent who oversees budget issues for the Ontario-Montclair School District.

“The federal government’s debt issues (mean) their budget cuts are coming down that could affect schools negatively, and now the state is finding out it doesn’t have enough money for the budget they adopted this year.”

The county Treasurer’s Office invests the pool’s dollars conservatively, with a majority of the portfolio being invested in instruments backed or issued by the U.S. government.

So when Standard & Poors downgraded the U.S. government’s credit rating on Aug. 5, the ratings firm followed that action by downgrading the county fund. In both cases, Standard & Poors took the ratings down a single peg from the best rating – AAA – to AA-plus.

The other major ratings firms, Moody’s Investment Services and Fitch Ratings, continue to give their top ratings to both the federal government and the San Bernardino County pool.

The U.S. government’s rating reflects analysts’ views on its ability to repay the debt used to finance daily operating expenses.

A slightly lowered rating means Standard & Poors is telling investors that government bonds are not quite as safe an investment as they previously have been.

That judgment would presumably send interest rates up, but the markets have thus far acted otherwise.

To read entire story, click here.

SB County’s investment pool gets downgrade
Andrew Edwards, Staff Writer
Posted: 08/09/2011 09:30:12 PM PDT

Standard & Poor’s followed its downgrade of the U.S. government’s credit rating by downgrading pooled investments of San Bernardino County schools and other agencies.

The ratings firm this week reduced the San Bernardino County Investment Pool’s rating from AAA to AA+. The firm also reduced the U.S. government’s credit rating to AA+ on Friday.

Schools, community colleges, water districts and special districts use the San Bernardino County Investment Pool to create a pool of investments. The pool held some $4.3 billion as of late July.

Pool managers had heavily invested in assets backed or issued by the U.S. government, which all three major ratings agencies classified as among the world’s safest until Friday.

That changed when one of those agencies, Standard & Poor’s, downgraded the U.S. credit rating by one peg.

As of June 30, the San Bernardino County Investment Pool had about 57 percent of its portfolio invested in instruments backed or issued by the U.S. government.

That exposure placed the fund at risk of a downgrade, which Standard & Poor’s confirmed Monday.

“My staff and I are analyzing the potential impacts of the U.S. downgrade on the bond market and evaluating what it means to the investment pool and our investment strategy,” said San Bernardino County’s treasurer, Larry Walker, in a statement issued late Tuesday.

“The pool’s safety, liquidity, and return continue to be our top priorities.”

Walker was not available for additional comment late Tuesday.

Another ratings agency, Moody’s Investment Services, had also warned of a potential downgrade to the county’s credit rating. Walker’s office reported Moody’s has confirmed its AAA rating and that the Investment Pool also retained AAA grade from Fitch Ratings.

Standard & Poor’s downgrade of the San Bernardino County Investment Pool is just one example of the uncertainties present in U.S. markets.

The ratings’ firm has explained its downgrade as a result of the political brinksmanship that preceded a debt-ceiling deal between President Obama and congressional Republicans.

And aside from the toxicity of Washington politics, investors and consumers face a wild stock market and the Federal Reserve’s expectation of a slow recovery.

The federal government’s lowered credit rating is probably a realistic assessment of its creditworthiness, said Dann H. Bowman, the chairman of Chino Commercial Bank.

Bowman said the downgrade could be the kind of news that detracts from consumer confidence and spending.

To read entire story, click here.

Effects of potential downgrading of U.S. government on local agencies is unknown
July 22, 2011 9:09 AM
Natasha Lindstrom
Staff Writer

SAN BERNARDINO • The political stalemate over raising the national debt ceiling has triggered rating agencies to place the San Bernardino County Investment Pool on review for possible downgrades.

The nearly $5 billion pool, which holds funds on behalf of the county, school districts, community college districts and certain special districts, has maintained the highest possible ratings from all three major rating agencies since 1999.

It’s unclear what effects the potential defaulting and downgrading of the U.S. government could have on local agencies, though county Treasurer Larry Walker said in a statement he believes the county’s Investment Pool would be minimally impacted.

“I do not foresee any issues with the San Bernardino County Treasury Pool’s liquidity or ability to meet its obligations if the United States is indeed downgraded …” Walker said. “This is clearly in reaction to Congress’ inability to reach an agreement on the U.S. debt ceiling and the possibility of a U.S. ratings downgrade.”

To read more about the Investment Pool, see the full story in Friday’s Daily Press. Get complete stories every day with the “exactly as printed” Daily Press E-edition, only $5 per month! Click here to try it free for 7 days. To subscribe to the Daily Press in print or online, call (760) 241-7755, 1-800-553-2006 or click here.

Natasha Lindstrom may be reached at (760) 951-6232 or at NLindstrom@VVDailyPress.com.

10:00 PM PDT on Thursday, July 21, 2011

By IMRAN GHORI
The Press-Enterprise

A San Bernardino County civil grand jury is calling on the auditor-controller/treasurer/tax collector’s office to conduct more audits of county departments and special districts.

The 2010-2011 San Bernardino County grand jury report last month criticizes the reduction of internal audit staff from 20 full-time positions three years ago to 11 currently, saying the office should audit all county departments and special districts every year. Currently, the office sets audit priorities for county departments based on whether they fall into a low- or high-risk category and only audits special districts every five years, the report states.

The grand jury describes the internal audit process, which looks at how county departments are handling their finances, “as the most important safeguard of public funds.”

Auditor-Controller/Treasurer/Tax Collector Larry Walker said previous grand juries have made the same recommendation to increase audits and that his response is essentially the same: He would need more staff and resources to conduct complete audits of every department.

“There’s no doubt that we’ve always been challenged to do as much auditing as we’d like, and the current budget challenges are making that even more challenging,” he said.

The grand jury also criticized the Board of Supervisors’ decision to merge the separately elected offices of auditor-controller and treasurer-tax collector in January 2010 after then-Treasurer/Tax Collector Dick Larsen retired.

The grand jury describes the consolidation as a possible conflict of interest and recommends that the California attorney general be asked for a ruling to determine if the county violated voter rights when it made that decision.

The report notes that at least 10 counties have combined auditor-controller/treasurer/tax collector functions but states that “the Grand Jury found no county where as many important positions are held concurrently by one person as is the case with” San Bernardino County.

However, it also incorrectly states that the county clerk and recorder duties are still part of Walker’s office. The clerk-recorder functions were turned over to the assessor’s office this past January.

To read entire story, click here.

Many SB County retirees receive generous pensions
09:42 PM PDT on Saturday, July 9, 2011
By IMRAN GHORI, JIM MILLER and DAVID DANELSKI
The Press-Enterprise

The San Bernardino County Employees’ Retirement Association has 446 retirees who receive more than $100,000 a year in pension benefits, with some getting more than their salary when they were part of the workforce, according to newly released records.

The retirement association, an independent agency overseeing the county’s pension fund, provided the data to The Press-Enterprise on Friday, after losing a yearlong legal battle over the release of the records.

Those who draw pensions of more than $100,000 a year represent five percent of the beneficiaries but receive 22 percent — about $60 million — of the annual benefits paid by the agency. That includes some other agencies that are part of the SBCERA system, although county retirees make up the vast majority.

At least 24 of the top pension earners, make an average of $60,000 a year more in retirement than they earned when they were working, according to a comparison with salary data on the county website.

For instance, former Undersheriff Richard Beemer — who receives the highest pension — gets $290,902 a year, about $96,000 a year more than the current maximum salary for that position with the San Bernardino County Sheriff’s Department.

According to the SBCERA website, retirement benefits are calculated on a formula that includes factors such as age at retirement, years of service and the highest 12 months of “earnable compensation” for that position.

Earnable compensation includes the base salary plus other factors that can vary according to department and employee contracts. Some common benefits that can count toward a public employee’s pension include car and uniform allowances, on-call pay for public safety employees and accumulated vacation time that is cashed out when an employee retires.

County spokesman David Wert said an employee’s salary is only considered a portion of one’s earnings.

San Bernardino County Supervisor Janice Rutherford, who sits on the retirement board, said the pension system needs to be reformed.

“We have designed and evolved into an absolutely crazy system where spiking your pension is considered normal and acceptable and you’d be laughed at if you didn’t do that,” she said. “We have to change that.”

San Bernardino County has seen rising pension costs in the past year due to recent investment losses, benefit increases during boom years and a growing number of retirees.

Wert said the county’s retirement obligations will increase dramatically over the next five years. In 2010-11, the amount was $6 million. For 2011-2012, it will grow to $23.6 million and then to $43.5 million and $66.5 million the next two years. By 2014-2015, the county’s costs will escalate to $85.1 million.

Wert said the county is seeking ways to drive down pension costs by scaling back benefits. As part of the fiscal 2011-2012 budget, the county asked employees to fund a portion of their retirement contribution that is now paid by the county. But the two biggest employee unions have not agreed to do so.

The county also wants to create a multi-tiered system in which newer employees would get reduced benefits, but state law does not allow the county to create different retirement formulas for different bargaining units at different times, Wert said. The challenge is that different employee contracts come up for renewal at different times, he said.

Auditor/Controller/Treasurer/Tax-Collector Larry Walker, who sits on the retirement board, said the county is restricted in many cases by state law and court decisions in setting retirement formulas.

“I think a good argument can be made that pensions based on salary, experience and age are a pretty solid foundation, but those extra things that cause major extras, I think those are the things that need to be looked at,” Walker said.

The data shows that San Bernardino County has almost four times as many employees with pensions in the six figures compared to Riverside County. According to data provided last year, Riverside County has 87 retirees with pensions at $100,000 or higher, while San Bernardino has 385 retirees receiving benefits at that range.

Wert said he could not say why there’s a difference without analyzing the data, which he said he had not seen.

Marcia Fritz, president of the California Foundation for Fiscal Responsibility, which advocates rolling back government pensions, said non-CalPERS retirement systems such as San Bernardino’s seem to offer sweeter retirement packages.

There is no good reason why San Bernardino County should have so many more $100,000-plus retirees than Riverside County, a county of similar size that is part of the CalPERS system, Fritz said.

“What I’ve found is that if there is a difference from CalPERS, then it’s the other systems that are more generous. I’ve never seen it go the other way,” Fritz said. “There’s less scrutiny, there’s more…of a good-old boy network going on. It makes it less likely that they say no.”

Representatives of public-employee groups say most government retirees receive much smaller pensions.

To read entire story, click here.

By Joe Nelson Staff Writer
Created: 07/07/2011 07:58:04 PM PDT

The San Bernardino County Board of Supervisors should consult with appropriate state agencies to determine if the merger of two county offices last year created a conflict of interest, the Grand Jury has recommended in its annual report.

The Grand Jury, in its report released last week, found “problematic” the Board of Supervisors’ approval of the merger of the Treasurer-Tax Collector and Auditor-Controller/Recorder’s offices in January 2010.

“A ruling from the state Attorney General (can) be requested to determine if the county violated voter rights when it eliminated the elected office of Treasurer-Tax Collector when it became vacant and subsequently combined the duties of that office with another elected office which appears to create a conflict of interest,” the Grand Jury said in its report.

County spokesman David Wert said the Board of Supervisors determined no conflict would be created when it approved the merger.

“And it was pointed out that at least 10 California counties have combined auditor-controller-treasurer-tax collectors, including Sacramento, Fresno and Santa Clara,” Wert said in an email.

He said it was determined that the treasurer-tax collector and the auditor-controller-recorder perform functions that are most commonly found in traditional accounting departments under one umbrella.

As for voter rights, Wert said the county charter includes an ordinance allowing the Board of Supervisors to “consolidate any two or more county offices or separate any offices now or hereafter consolidated.”

Such a merger was accomplished, without challenge, in January 2005 with the Sheriff’s Department and the Coroner’s Office, Wert said.

“In both cases, the board conducted the merger when one of the offices was vacant, thereby not ousting an official who had been elected by the voters,” Wert said.

In its report, the Grand Jury noted that the U.S. Government Accounting Office (GAO) and the Institute of Internal Auditors (IIA) frown upon the combining of auditing and controllership responsibilities, and believe such practices impair the autonomy of the audit process and jeopardize its objectivity.

The Grand Jury also found there was no other county where as many important positions were held concurrently by one person as is the case with the San Bernardino County auditor-controller/treasurer/tax collector and county clerk. It has recommended the auditor’s and controller’s functions be separated.

Before the supervisors approved the 2010 merger, former county Treasurer-Tax Collector Dick Larsen called the proposal “one of the biggest midnight thefts in a long time.”

Larsen, who retired in July 2009 after 37 years with the county, 11 of them as treasurer-tax collector, accused the county of bypassing the electoral process and stripping the public of its voting power.

He said that while Auditor-Controller Larry Walker had plenty of experience as an accountant, he did not possess the investment and securities background to handle the county’s $4billion to $5billion investment pool.

Placing that responsibility on Walker, Larsen said, would tax the office with too many functions.

Reached by telephone Thursday, Larsen declined to comment.

To read entire story, click here.

Water bill error cited in new debt
Ryan Hagen, Staff Writer
Posted: 05/23/2011 05:02:54 PM PDT

GRAND TERRACE – County auditors report that the city owes more than $2 million to the San Bernardino Valley Municipal Water District, worsening an already precarious budget and possibly imperiling efforts to sell bonds for city projects.

In fiscal years 2008-2009 and 2009-2010, the office of the county auditor, controller and treasurer used the wrong formula to calculate the amount owed by two redevelopment agencies, including Grand Terrace’s, that were created before 1989, according Matt Brown, spokesman for the county office.

The other agency that should have had its apportionment computed differently – the Inland Valley Development Agency – owes more than $6.5 million to the water district, according to county records.

“Ultimately, it was human error,” Brown said. “Obviously, we accept responsibility.”

Brown said county staff had been shuffled and an additional supervisor assigned to prevent such oversights in the future, and re-checking entries confirmed that the error only involved the two redevelopment agencies during those two years.

That leaves Grand Terrace to negotiate a repayment schedule for its newly discovered nearly $2.3 million debt, even as the city struggles to close a deficit in its general fund of roughly $50,000 and growing – equal to about 10percent of that fund.

The payment won’t come out of Grand Terrace’s general fund – the Redevelopment Agency is a separate city-controlled entity – but it further limits options for a city that is scheduled to review a plan at tonight’s City Council meeting that recommends severe cuts.

Most of the city’s redevelopment revenues were committed to projects early this year, a tactic council members described at the time as a prudent move in light of Gov. Jerry Brown’s plans to disestablish California’s redevelopment agencies and honor only existing debts as part of his efforts to balance the state budget.

The status of that plan, which many in the state Legislature opposed, is still undecided.

Worse, according to Mayor Walt Stanckiewitz, is that the error was announced just before the city planned to issue up to $29million in bonds to finance public infrastructure improvements.

“The timing was really bad,” Stanckiewitz said. “We’re trying to put together a bond offering and this pops up, which we had to make public.”

Generally, investors demand higher rates on bonds when cities have higher debts. That means less money in the city’s pocket.

To read entire story, click here.

Leaders didn’t think CalPERS increases would be a problem
James Rufus Koren, Staff Writer
Posted: 04/23/2011 08:03:04 PM PDT

Unions wanted them. Pension managers said they were affordable. Elected officials approved them.

But improved pension benefits granted to public employees over the past 12 years are now costing local governments dearly. And for that, officials acknowledge, there’s plenty of blame to go around.

“I think everybody got it wrong,” said former state Sen. Jim Brulte, a Republican who represented much of San Bernardino County and voted in 1999 to give better pensions to state workers.

Looking back, local leaders say overly optimistic assumptions about the economy spurred the state and some cities and counties to raise pension benefits, especially for public safety personnel, starting a chain reaction that eventually pushed other agencies to follow suit.

“It was a frenzy,” said San Bernardino County CEO Greg Devereaux. “It was a frenzy based on bad information.”

Strong approval

In 1999, Brulte and 38 other state senators – Republicans and Democrats alike – approved a bill that gave expanded pensions to most state workers. The bill gave lucrative “3-at-50″ pensions, which allow workers to retire at age 50 with three percent of their final pay multiplied by each year of service, to California Highway Patrol officers.

For instance, if an officer with 30 years on the force retired at age 50 with a final salary of $75,000, the officer would earn $67,500 per year for the rest of their lives.

At the time, officials from the California Public Employees’ Retirement System, or CalPERS, said the state could easily afford the added benefits.

“I remember, we quizzed the CalPERS folks on whether they could assure us there would be no additional hit to the (state) general fund,” Brulte said. “They assured us that would be the case. Which is why I think it passed nearly unanimously.”

Indeed, the bill, SB 400, passed 39-0 in the Senate and 70-7 in the Assembly. According to the Assembly analysis of the bill, even with the added benefits, the state would pay less than $800 million per year for pensions through 2009.

“Boy, the CalPERS people were definitely wrong about that,” Brulte said.

In fact, the state’s pension costs climbed dramatically – helped along by subsequent additions to employee benefits – rising to $2.8 billion in 2008-09.

Pension bandwagon

After the state raised its pensions, many cities, counties and other local government agencies followed suit.

In 2000, 49 local agencies gave 3-at-50 pensions to their police officers or firefighters. In 2001, 116 more agencies did the same. Colton and Chino police officers got 3-at-50 in 2000, Colton firefighters got it in 2001, as did Banning and Beaumont police officers.

Devereaux, who was then the city manager of Ontario, said CalPERS was telling cities the same thing they’d told the state: that the added benefits would be affordable.

“The costs they were putting out for 3-at-50, they were relatively low,” he said.

At the time, cities were paying little or nothing for their pension plans. San Bernardino County, which has its own retirement system separate from CalPERS, paid nothing for most employees and only 2.3 percent of pay for public safety employees in the 2002 fiscal year.

That made it difficult to argue against the bigger pensions when unions came to ask for them.

“It became very difficult for local staff to explain some of the inherent risks of (Cal)PERS not meeting their earning projections,” Devereaux said. “It’s hard for a local staff to have credibility over the agency managing the money.”

Asked about Devereaux’s assertion that the agency essentially encouraged cities to boost pensions, CalPERS spokesman Wayne Davis said only, “Our job is to provide all the information we can for the local agencies to make informed decisions.”

A bargaining chip

After steady growth through the ’90s, the stock market became more volatile in 2000 and took big hits in 2001 and 2002.

But in 2002 and 2003, agencies continued to add 3-at-50 pension benefits. This time, instead of rosy economic projections, officials say they were motivated by competition and by what they thought might be a good bargain.

“The sheriff thought he wasn’t going to be able to recruit employees if he couldn’t compete with what the state and other agencies were doing,” said Dennis Hansberger, a former San Bernardino County Supervisor who voted in 2003 to approve 3-at-50 pensions for sheriff’s deputies. “He was saying, `If I can’t offer those sorts of wages and benefits, how am I going to keep my force?”‘

Jim Erwin, who at that time was president of the union representing sheriff’s deputies – the San Bernardino County Safety Employees’ Benefit Association – said the county got more out of the deal than a recruiting tool.

In an unrelated matter, Erwin is charged with conspiracy to commit a crime, bribery and perjury in connection with a corruption probe involving a $102 million settlement San Bernardino County reached in 2006.

In 1997, the California Supreme Court ruled that some of the benefits public employees had received over the years – such as uniform allowances or car allowances – had to count toward employee pensions.

“That caused a huge increase in the benefits people are entitled to, and it was ordered by the courts,” said San Bernardino County Treasurer-Tax Collector Larry Walker.

After an appeals process, the court’s decision in the case – known as the Ventura case – was finalized in 2003. Erwin said sheriff’s deputies settled with the county on the Ventura case in the process of negotiating 3-at-50 pension benefits.

“They said, `We won’t argue over Ventura if you give us this,”‘ said John Michaelson, the county’s former chief administrative officer. “It was a bargaining chip for them and it would have cost the county something.”

And even without that chip, Erwin and Michaelson said the county pension fund was doing relatively well at the time.

Public employee unions have money and political clout, and the deputies’ union – the San Bernardino County Safety Employees’ Benefit Association – was, and is, a big contributor to the campaigns of county leaders. But Erwin said sheriff’s deputies wouldn’t have gotten 3-at-50 pensions if anyone had foreseen the recession that, in 2003, was only five years away.

“If they did (see it coming), there’s no way we would have gotten 3-at-50,” he said. “All the (political action committee) money in the world wouldn’t have gotten that through.”

Trend continues

To read entire story, click here.

Thursday, February 17, 2011 – 12:40 p.m.
Last Modified: February 20, 2011 – 11:35 a.m.

The government pension fund for the County of San Bernardino, once-renowned for it’s long-term investment savvy, has taken a hard fall over the past few years.

A fall, the fund is still reeling from to this day.

A fall, now affecting county taxpayers and employees.

The San Bernardino County Employees Retirement Association (SBCERA) currently operates without a Chief Executive Officer and a Chief Investment Officer.

Two positions vacant since the fourth quarter of last year, and both previously occupied by former CEO/CIO Timothy Barrett, who abruptly left the pension fund in November for a job at Eastman Kodak.

Barrett’s exit was reportedly over compensation.

A recruitment to find replacements is also reportedly underway, while county Treasurer Larry Walker currently acts in the temporary position of managing trustee.

SBCERA, once ranked in the top-tier of public pension funds of similar size, is now ranked in the bottom ten percent of all public pension funds.

A symptom of a combined 2008 and 2009 loss of almost $2 billion.

For a fund that prided itself on innovative investment strategies with a primary goal of safety and preservation of capital, the fund morphed into what some would describe as a hedge fund-type investment platform, led by an expansion into the area of derivative investing.

As of June 30, 2010, approximately 39% of the pension funds total assets was invested in real estate, infrastructure, timber, absolute return and commodities.

In 2010, the number of asset management firms handling SBCERA funds has exploded to some 76 companies, who were paid more than $66 million in expenses.

The asset managers are monitored by four consulting firms, who were paid more than $2 million last year.

Now it would seem the very same investment strategy has hindered the funds performance and made it more difficult to achieve a required 9% annual investment return needed to keep pace with mandated actuarial pension obligations, a general subsidy, and operating expenses.

Keep in mind that SBCERA does not bear any health insurance obligations, which currently plague many public pension funds across the country. It should also be noted that SBCERA general members never opted for any enhanced retirement formula. Only safety members negotiated for an increased pension formula in 2003.

The safety members, at the time, agreed to pay an additional 5% of their earnable compensation into the pension fund. Something they still continue to do today.

This would make the argument that the woes faced by SBCERA rest entirely with investment performance.

Here is the pension funds past performance. The numbers speak for volumes.

                                             Deviation
               Total            Total          From       Funding
Year           Assets           Return        Target       Ratio
2010       $ 5,094,000,000       7.91%       ( 1.09%)      85.52%
2009       $ 4,687,000,000     (24.00%)      (32.00%)      91.02%
2008       $ 6,255,000,000     ( 2.52%)      (11.52%)      93.62%
2007       $ 6,519,000,000      19.70%        10.70%       93.10%
2006       $ 5,462,000,000      11.45%         2.45%       92.02%
2005       $ 4,741,000,000       9.43%         0.43%       91.08%
2004       $ 4,502,000,000      17.16%         8.16%       93.61%
2003       $ 3,360,000,000       0.80%       ( 8.20%)      87.34%
2002       $ 3,306,000,000     ( 4.33%)      (13.33%)      99.07%
2001       $ 3,456,000,000     ( 3.24%)      (12.24%)     111.47%
Note: On 06/30/04 the County of San Bernardino contributed $506 million in proceeds from the sale of pension obligation bonds.
Source: SBCERA CAFR 2009/10

SBCERA fiscal years with cumulative losses easily dwarf those years which reflect gains, while the pension fund’s total assets as of June 30, 2010 sit $1.425 billion below their June 30, 2007 high.

It’s safe to say that prior to the latest market collapse SBCERA was treading water at best.

The pension funds long-term performance is causing ripples within the political waters of San Bernardino County government, with pressuring building on the county general fund, which has to shoulder the burden of the problems at SBCERA.

Scrutiny and criticism from county supervisors and county Chief Executive Officer Greg Devereaux has been growing in tempo over the past year, with one county supervisor, Gary Ovitt, stepping in as a trustee.

The Board of Supervisors appear to be gearing up to deal with a retirement board that has had a problem shaking its love affair with travel junkets and other concerns not directly related to pension fund oversight.

While the board trustees are lay people, when it comes to sophisticated investments strategies, it is still their job to hold professional staff accountable.

As of June 30, 2010, SBCERA recorded an unfunded liability of more than $1 billion projected over a twenty year period.

Developing….

Tuesday, February 8, 2011 – 09:15 a.m.

Defiance! Defensiveness! Politics!

That’s what seems to be coming from San Bernardino County Treasurer Larry Walker.

Walker is currently managing trustee of the San Bernardino County Employees Retirement Association (SBCERA), while the fund searches for a new executive director and chief investment officer.

A search that seems to be falling into the category of watching paint dry.

In Cassie MacDuff’s column published in this mornings Press Enterprise, Walker is quoted as saying a county staff report on the status of the pension fund is nothing more than an “attack piece”.

Is Walker really the county treasurer?

The report, which Walker doesn’t factually dispute, highlights some serious concerns related to the retirement systems projected funding level.

Walker says the fund has returned and average of 9% annually over the past 28 years.

Why select 28 years as the measurement period?

Because the pension fund needs to make 9% per year to break even.

In other words Walker is playing a numbers game.

The fund is having a problem consistently making the 9% number and the county has to factor this into its long-term budgeting.

Even the California Public Employees Retirement System (CalPERS) and the California State Teachers Retirement System (CalSTRS) have been reluctantly reducing their own long-term investment return assumptions.

Each 0.10% shortfall below the 9% long-term investment return target equates to millions in unfunded liability to the county.

Walker also says the pension fund has assumed a investment posture geared towards stability. A posture that inherently reduces long-term investment returns.

A posture that has now dropped the performance of SBCERA, a once highly-rated pension system, into the bottom 10% of public pension funds.

Sounds like county supervisors need to make more changes at SBCERA.

CEO Greg Devereaux, Treasurer Larry Walker and Director of Governmental Relations Mark Kirk

.

10:00 PM PST on Monday, February 7, 2011
Cassie MacDuff

A new report on a growing deficit in the San Bernardino County employee pension fund has the Board of Retirement on the defensive.

Managing Trustee Larry Walker, the county treasurer, on Friday called the report an “attack piece,” but quickly backpedaled, saying the staff member who compiled it may have missed the big picture: Over 28 years, the fund’s earnings have averaged 9 percent a year.

The report summarizes the plan’s Comprehensive Annual Financial Report.

It was written for the Board of Supervisors, which must assess the pension system’s health to make crucial decisions going forward.

The report was compiled by Director of Government Relations Mark Kirk at the request of county Executive Officer Greg Devereaux.

Some of the findings:

Contributions to the pension fund cover only 85.5 percent of “liabilities” — the amount the fund is obligated to pay out to retirees. Coverage could shrink to 67 percent if the fund continues on its current course.

Although the fund achieved a 7.9 percent return on investments in 2009/10, that’s in the bottom 10 percent of public-pension funds.

Despite the recession, since 2008 the Board of Retirement has continued to pay retirees discretionary subsidies of up to $230 a month on top of their normal pensions and cost-of-living increases.

The report wasn’t all negative. It noted favorably that although retirement systems are allowed to charge administrative costs up to 0.21 percent of “liabilities,” San Bernardino County’s is charging less than half that.

Walker couldn’t point to errors in the report but noted the fund’s strategy is to avoid risk, not maximize earnings.

The information in it was available to the Board of Retirement before Kirk boiled it down for the county supervisors. Now that it’s out, it’s a wake-up call.

Officials should ask, for example, why the board continued the discretionary subsidy to retirees while the fund lost 24.8 percent of its value in the 2008/09 recession.

Walker couldn’t tell me whether the board is allowed to rescind this year’s subsidy. He should find out.

To read entire story, click here.

Monday, January 24, 2011 – 11:10 a.m.

All five members of the San Bernardino County Board of Supervisors have now declined a two percent pay increase as prescribed by Charter Measure P.

A good move on their part considering the county budget deficit, their current benefits package, and demands the county will be placing on employees later this spring.

However all four county-wide elected officials, who are reportedly still simmering over cuts to their benefit packages, scooped up a four percent pay boost as prescribed by Charter Measure K.

Here is the current salary levels.

                                                         Additional
Elected Office                              Salary       Compensation Total
Member,Board of Supervisors                 $ 150,183.00 $      0.00  $ 150,183.00
Assessor-Recorder-Clerk                     $ 196,491.96 $  9,908.04  $ 206,400.00(1)
Auditor-Controller-Treasurer-Tax Collector  $ 242,585.04 $ 14,798.24  $ 257,383.44(2)
Sheriff-Coroner=Public Administrator        $ 216,897,96 $ 27,741.96  $ 244,639.92(3)
District Attorney                           $ 200,439.96 $      0.00  $ 200,439.96
(1) Receives an additional $ 9,908.04 per year for appointment as
    County Clerk.
(2) Receives an additional $14,798.04 per year for appointment as
    Director of County Collections.
(3) Receives an additional $27,741.96 per year for appointment as
    Director of County Safety and Security.
Benefit Package (Annual)
Health Benefit Plan Pickup                     $  6,000.00
Automobile Allowance                           $ 14,400.00
Portable Communications Device Allowance       $  2,400.00
Retirement Contribution Pickup (7%)            $ 12,014.64-$19,612.84
Supplemental Retirement Allowance              $ 11,391.90
401K Contribution (8% Match up to legal max)   $  7,509.15-$16,500.00
457(b)/401(a) (1% Match)                       $  1,501.83-$ 2,573.83
457(b) Contribution per ordinance (5%)         $  7,509.15-$12,869.17
Retirement Medical Trust Account (1%)          $  1,501.83-$ 2,573.83
Health Club Membership                         $    324.00
Source: S.B. County Human Resources, Exempt Compensation Plan,
        Employee Relations Ordinance

10:00 PM PST on Wednesday, January 12, 2011

By IMRAN GHORI
The Press-Enterprise

San Bernardino County supervisors say more needs to be done to control rising pension costs as they approved a $16.4 million increase this week.

Supervisor Janice Rutherford called for a workshop on the issue after the board unanimously approved increases in the employer contribution rates Tuesday. The rates for general county employees increased to 14.72 percent from 12.32 percent, while safety employee rates grew to 31.23 percent from 26.82 percent.

Auditor-Controller/Treasurer/Tax Collector Larry Walker said the increases are based on an actuarial report adopted by the San Bernardino County Employees’ Retirement Association board in November.

Walker, who is managing trustee for the board, said the study analyzed the pension fund’s unfunded liability to determine how much is needed to ensure the plan is fully funded.

The Board of Supervisors’ action was mainly a “ministerial” one, as the required increases were already set, Walker said.

Rutherford said she is troubled by the increases, which take another bite out of the county budget at time when officials are already anticipating a shortfall.

“If you keep these percentages going out, it gets bigger and bigger and bigger,” she said. “These numbers really go through the roof.”

To read entire story, click here.

09:02 AM PST on Tuesday, January 4, 2011

By IMRAN GHORI
The Press-Enterprise

Four top San Bernardino County officials began new terms of office Monday.

Sheriff Rod Hoops and Auditor-Controller/Treasurer/Tax Collector Larry Walker marked the occasion with late morning and noon swearing-in ceremonies at the County Government Center.

Assessor Dennis Draeger, who is beginning his first full elected term, took his oath of office at the Registrar of Voters office Wednesday. Draeger said he planned no ceremony.

He was appointed as assessor in July 2009 after former Assessor Bill Postmus resigned while under a criminal investigation.

District Attorney Mike Ramos, who was elected to a third term, also took his oath of office at the registrar’s office last week. He is holding a swearing-in ceremony Wednesday afternoon.

The rotunda at the County Government center was packed with sheriff’s and county officials as Hoops was sworn in. He thanked supporters and praised the department as one “loaded with talent.”

To read entire story, click here.

Saturday, January 1, 2011 – 08:00 p.m.

Many of San Bernardino County’s elected officials have decided not to forgo their pay increases.

Even though the county is looking at millions of dollars in new budget cuts this year and most employees have already voted to cancel previously negotiated raises.

Currently three of five county supervisors have decided to forgo a 1% salary increase as prescribed by Charter Measure P.

The breakdown as to which supes accepted and who declined is currently unknown.

However, all four countywide elected officials have decided to keep a maximum allowed 4% pay raise prescribed under Charter Measure K.

Why? They’re not happy about their benefit packages being rolled back to pre-June 2007 levels.

Apparently a costly sore spot.

Sources tell InlandPolitics.com that District Attorney Mike Ramos, Sheriff-Coroner-Public Administrator Rod Hoops, Assessor-Recorder Dennis Draeger and Auditor-Controller-Treasurer-Tax Collector Larry Walker won’t give up their raises.

Draeger also assumes the Recorder title this month from Walker. With the new title he will receive $20,000 in additional salary.

In Spring 2009, Third District Supervisor Neil Derry pushed through an amendment to the Exempt Compensation Ordinance that partially restored elected official benefits to 2007 levels.

A move which caused Derry resentment among his fellow colleagues.

The package of enhancements in question, which was pushed through by former Second District Supervisor Paul Biane, rained rich benefit increases on elected officials by granting them high-priced medical coverage, increased taxpayer contributions to 401(K) style retirement accounts to the maximum allowed under federal law, increased the automobile allowance to $1,200 per month, and created a cellular communications allowance of $200 per month.

The reductions approved last year are effective when an official assumes a new term of office.

Thus the changes not only apply to the aforementioned officials, who assume new terms of office this week, but Supervisors Gary Ovitt and Janice Rutherford as well.

Both Ovitt and Rutherford started new terms last month.

When he ran for office, Derry campaigned on a platform to stop such excesses. He refused to accept the increased benefits when he assumed office in December 2008.

No longer available is a high-end health insurance plan costing taxpayers upwards of $30,000 per year for each official insuring more than two people. Now the affected officials have the same health benefits as exempt managers.

Also changing is the $16,500 annual contribution to the county’s 401(K) plan. It’s being reduced back to the previous level of 5% of salary.

The officials in question don’t seem to be concerned about creating a stigma with the public or more importantly setting an example for the rest of the county workforce.

This year, the county is likely to once again ask employees to make further economic sacrifices. And any type of entitlement attitude by officials won’t likely go over well.

If anyone knows San Bernardino County management culture, the phrases “more is always better and less is unheard of” or “Do as I say, not as I do.” describe the attitude.

Well now we have a perfect example.

10:00 PM PST on Saturday, January 1, 2011

By IMRAN GHORI
The Press-Enterprise

The San Bernardino County clerk-recorder’s office will be formally transferred to the assessor Monday in the final part of a series of mergers approved in early 2010.

In January, the Board of Supervisors eliminated the treasurer/tax collector position as a separately elected office, merging it with the auditor/controller. The duties of public administrator that were handled by the treasurer/tax collector were moved to the sheriff/coroner’s office.

Those mergers took effect in February due to a vacancy created by the retirement of former Treasurer-Tax Collector Dick Larsen.

However, the last part of the swap could not take effect until Larry Walker’s current term as clerk-recorder ended.

Walker, who will be sworn in to his fourth term as auditor/controller Monday, said losing the clerk-recorder duties is bittersweet for him.

“It’s been a very rewarding experience,” he said. “On one hand, I hate to let that go. On the other hand, I have greater responsibility in the area of treasurer/tax collector.”

Clerk/recorder duties include recording and storing marriage licenses, birth certificates and other records. Supervisors decided it made sense to merge that with assessor, whose duties include keeping property records and determining property values.

In 12 years as recorder, Walker said the office moved to a 90 percent automated process, streamlining the electronic recording process.

To read entire story, click here.

2 promoted as merger of county offices continues

Joe Nelson, Staff Writer
Posted: 10/24/2010 03:51:00 PM PDT

San Bernardino County Chief Deputy Recorder De Ana Thompson and Assistant Recorder Matt Brown have been moved into new positions as a merger of the Auditor-Controller-Recorder’s and Treasurer/Tax Collector’s offices moves forward.

Thompson, a county employee for 14 years and chief deputy recorder since 2001, was recently promoted to assistant recorder, and Brown was promoted to assistant auditor-controller recorder.

Thompson will begin reporting to Assessor Dennis Draeger in the Assessor’s Office on Jan. 3, and Brown will remain at the Auditor-Controller/Treasurer/Tax Collector offices.

In January, the Board of Supervisors approved a proposal to eliminate the elected position of Treasurer/Tax Collector and merge the office with that of the Auditor-Controller Recorder’s and Assessor’s offices. The move was part of a plan to save the county between $500,000 and $1 million a year through the elimination of about 10 positions through attrition and the transfer of county employees to other departments.

Thompson’s new role will be to provide the newly formed Assessor/Recorder’s Office with a “high level of expertise and continuity,” according to an inter-office memo Auditor-Controller/Recorder/Treasurer/Tax Collector Larry Walker sent to his employees on Oct. 15.

Walker said Friday he has been impressed with Thompson’s 10 years of service to the Recorder’s Office and the improvements she’s made.

“I’m very happy with the appointment, and it’s my impression Dennis Draeger is happy with it as well,” Walker said.

As assistant recorder, Brown’s primary focus was filling vacant positions in the office and streamlining human resources procedures for promotions and new hires. One of the big aims is staffing the new High Desert Government Center in Hesperia, Walker said.

Brown will now take on a bigger role in the overall administration of the office and will continue to provide assistance with the transition of the recorder’s division and office of the assessor, according to the memo.

“We’re targeting a very smooth transition, and so far so good,” Walker said.

In the last 18 months, Walker and Thompson have faced stinging criticism from a group of former employees who accuse Walker of mismanaging his elected office and Thompson of micromanaging employees and fueling a hostile work environment.

To read entire story, click here.

Larry Walker

Sunday, October 24, 2010 – 01:00 p.m.

What a tangled web.

Last week we published a story here at InlandPolitics.com on San Bernardino County Auditor-Controller-Recorder-Tax Collector Larry Walker’s hiring and subsequent promotion of Matt Brown to be his second-in-command.

A position for which Brown possesses no apparent qualification to hold.

The focus of the story was on Walker’s visible entry into hard ball politics by hiring Brown, and the involvement of Brown and his wife Jessica, in working to unseat former county supervisor Dennis Hansberger.

An activity that pretty much know one knew about.

Jessica Brown is employed as an salaried-exempt analyst in the county administrative office. Her mother Sandy Harmsen is the chief of the county’s workforce development division, another salaried-exempt position.

Brown has a long history in political meddling, and one has to wonder if Walker really knows just how much.

Scuttlebutt has it that Brown is behind the release of information about his former boss, county supervisor Paul Biane, related to a five-year old alcohol-related driving conviction in Illinois.

What’s the saying. “Revenge is a dish best served cold.”

A maneuver clearly meant to hurt Brown’s former boss, and aid his opponent, Fontana city council member Janice Rutherford.

Campaign records on file with the county registrar of voters indicate that a Brown-controlled political action committee called the “San Bernardino County Taxpayers Association” currently has an obligation to repay a $10,000 loan to Biane’s campaign committee.

Brown is Biane’s former chief of staff, who earlier this year filed a complaint, alleging he was being harassed for his cooperation in an investigation into alleged corruption in San Bernardino County government. Brown later dropped his claim after being hired by Walker and receiving a payment of $25,000 to pay for legal bills owing to local attorney Sanford Kassel.

Kassel currently represents fired county administrative officer Mark Uffer and fired former solid waste division chief Peter Wulfman. Both have sued the county alleging “whistle-blower” retaliation.

While at the county, Uffer had a close friendship with Brown. Uffer had committed to retain Brown in the county administration in the event Biane didn’t win or seek reelection to his county office.

Brown’s stated desire is to stay in a salaried-exempt position and build a substantial retirement.

The money, which Biane loaned Brown’s committee in 2008, was used to oppose the election of current third district supervisor Neil Derry and keep Hansberger in office. Even though Brown and his wife had personally assembled material, which was used to oust Hansberger.

Brown

Thursday, October 21, 2010 – 09:45 a.m.

I never thought I would be saying Larry Walker and hard ball politics in the same sentence.

But it seems Walker has decided to play.

The long-anticipated move of Matt Brown, former chief of staff to second district supervisor Paul Biane, from the position of Assistant Recorder to Assistant Auditor-Controller, would appear to signal Walker is now started playing the political game.

Even though Walker denied it. The ouster of former Assistant Auditor-Controller Betsy Starbuck was indeed to make way for Brown.

Brown, who has no clue or experience in what his new position involves, is clearly there for political capital.

It’s kind of ironic that yesterday the California Attorney General argued to a jury in a San Bernardino courtroom in an attempt to convict a man over being an alleged politically-appointed hire.

It’ll be interesting to see if local newspapers swallow their pens on this clearly “unqualified” appointment.

Brown’s apparent and on-going medaling in his former boss’ election can’t be making too many people in the government center happy, and Walker must know that.

Hey, but Walker is safe for another four years, and whenever Brown causes him grief, so what?

Brown does have a history of stirring the pot though.

Back in 2005-06, Brown and his wife spent countless hours researching documents that showed former third district supervisor Dennis Hansberger voted on contracts to give his former girlfriends business $18 million in county funding.

That “opposition research” was turned over to Orange County political operative David Ellis, who was able to generate a expanded story in the Los Angeles Times.

Ellis’ friend, Times reporter Gil Reza, did a masterful writing job.

The research and related articles were used to help defeat Hansberger in 2008.

However, I am curious as to the method those five-year old Biane legal documents were procured.

Wednesday, October 13, 2010 – 01:00 p.m.
Last Updated: October 14, 2010 – 06:30 a.m.

The blame game has already started related to the various allegations swirling around San Bernardino County’s government pension fund.

Employees and trustees of the San Bernardino County Employees Retirement Association (SBCERA) are now pointing fingers and casting blame for the now-public missteps at the pension fund.

The fund, which has been slowly recovering from more than a billion dollars in loses at the height of the stock and real estate market crashes, has fallen under scrutiny from county supervisors. The focus? The funds performance, compensation practices and the awarding of sweetheart consulting contracts to people and firms who are either politically-connected or have ties to current and former insiders at the fund.

One outside investment manager has told InlandPolitics.com the pension system is being operated somewhat like a “hedge fund”.

Now to the pay front.

Some time ago, pension fund trustees approved a variable compensation structure for certain employees of the pension fund, which made the individuals eligible for bonus compensation.

As an example, the retirement fund executive director at an annual salary of $325,000 was made eligible for an annual bonus of up to an additional $325,000. The actual bonus amount to be paid is based on the pension fund meeting certain investment objectives.

Frankly, if people want to make this kind of money, while building a defined benefit pension, they need to work in the private sector, not government.

Something Barrett has apparently decided to do.

Also, there is now a few instances of the “pot calling the kettle black” taking place, which seem worthy of note.

First, insiders tell InlandPolitics.com that certain trustees along with outgoing executive director Tim Barrett and outgoing legal counsel Lance Kjelgaard attacked the proposed trustee appointment of Steve PonTell, management consultant with the LaJolla Institute and close friend of Board of Supervisors chairman Gary Ovitt. Even though the two men had no problem stomaching the appointment of San Bernardino-based certified public accountant Marvin Reiter.

Reiter is the campaign treasurer to District Attorney Mike Ramos and Sheriff Rod Hoops.

Secondly, Barrett and Kjelgaard also went along with proposing the pension fund board approve no-bid contracts to Orange County-based consultant David Ellis and Sacramento lobbyist Brett Granlund.

Ellis owns the firms Delta Partners LLC and The David Ellis Group. Grandlund is employed by the Sacramento and Washington D.C.-based lobbying firm Platinum Advisors.

The two men and their companies were awarded hundreds of thousands of dollars in contracts for marketing and governmental affairs work.

In a recent interview with Press-Enterprise columnist Cassie MacDuff “Ellis said they helped get special laws enacted enabling SBCERA to become independent and to handle other public investments.”

What is interesting here is that a check of a state database doesn’t list Ellis or his companies as a registered lobbyist as required by California law.

Ellis is also the political consultant to Ramos, and he was the long-time political consultant to former San Bernardino County Treasurer-Tax Collector Dick Larsen. Larsen, who sat on the pension fund board for more than a decade, abruptly resigned his elected office last summer.

Larsen is believed to have been instrumental in the pension funds adoption of the controversial compensation structures and approval of the aforementioned consulting arrangements.

Another interesting turn came this week as pension fund trustee Robert McDonald penned an article which was distributed to the funds retiree membership.

Besides blaming Ovitt for crashing the party, McDonald placed the pension funds woes on the safety retirement system, not investment performance. McDonald is spinning to as many people that will listen, the half-baked theory, that all the pension funds woes are being caused by the 3% at age 50 safety retirement formula.

Is this man for real?

Safety members in SBCERA pay the highest percentage towards their pension benefits than any other group of employees in the stand-a-lone county  system.

As a matter of fact, when the 3% at age 50 benefit was negotiated, the San Bernardino County Safety Employee’s Benefit Association (SEBA) agreed that safety members would contribute an additional 5% of their earnable compensation into the pension system.

An important fact McDonald and others conveniently overlook.

Also, at last report, the safety unit wasn’t managing the pension fund.

So, McDonald is either smoking crack, or doesn’t know what he’s talking about.

Last week Auditor-Controller-Treasurer-Tax Collector Larry Walker was appointed as interim trustee administrator for SBCERA, until Barrett’s replacement can be recruited.

Expect more fallout related to the pension fund.