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Archive for the ‘Civil Service’ Category

The Jindal administration may have been thwarted in sneaking through an amendment giving State Police Superintendent Mike Edmonson an extra $55,000 per year in retirement income but pay raises for at least 29 mostly unclassified employees could mean additional liabilities of $25 million to $42 million over 20-30 years for the Louisiana State Employee Retirement System (LASERS), LouisianaVoice has learned.

Even as merit pay increases for rank and file civil service employees has been frozen for the last five years, top tier employees, mostly unclassified supervisors and agency heads, have realized pay raises ranging from a one-year increases of 12.5 percent for the governor’s director of communications and 118.7 percent for the CEO of the Office of Group Benefits (OGB) to nearly 127 percent for the press secretary for the Department of Health and Hospitals.

No fewer than 10 of the pay bumps not surprisingly benefitted gubernatorial appointees and employees in the office of Gov. Bobby Jindal (R-Iowa, R-New Hampshire, R-Anywhere but Louisiana), who has devoted much of his time while in the state to firing state employees, slashing medical benefits and trying to destroy the state retirement system.

Retirement for state employees is computed by multiplying the average salary for the top three earning years times the number of years employed times 2.5 percent.

Thus, in the case of Susan West, who was promoted from State Risk Administrator at a salary of $83,200 in 2013 to the $170,000-a-year position as CEO of Group Benefits, her retirement, should she remain at OGB for three years, would be based on the higher amount, a difference of $86,800.

Thus, if she retires after 20 years at her present salary, she will receive 50 percent of $170,000, or $85,000 per year as opposed to $41,600—an additional $38,600 per year—had she remained at the $83,200 pay level. That would mean an additional $1.158 million in retirement income over 30 years.

In her case and in the cases of a few others, the salary increases were the result of major promotions but in others, pay increases went with lateral moves or new assignments and some of the other promotions would appear to be just for the purpose of implementing pay raises for favored employees.

In the case of 20 employees, the pay increases were $1,000 or more bi-weekly, or at least $26,000 a year while 10 others’ pay increases ranged from $500 to $999 bi-weekly, according to records obtained from the Office of Civil Service.

And it’s all legal—as opposed to the backdoor attempt the Edmonson to revoke his decision to enter the state’s Deferred Retirement Option Plan (DROP), which locked in his retirement at his captain’s rank level when he entered DROP.

In that case, Jindal, his executive counsel Thomas Enright, State Sen. Neil Riser, Edmonson and his chief of staff, Charles Dupuy all appear to have conspired to sneak an amendment, aka the Edmonson Amendment, onto a law officer disciplinary bill on the final, hectic day of the legislature. The amendment sailed through both the Senate and House and Jindal promptly signed it into law only to have a state district judge rule the procedure unconstitutional.

By granting generous pay raises, a procedure known as pension spiking, retirement benefits are automatically ratcheted upward, even if the employees does not stay a full three years at the higher level.

If, for instance, an employee who made $75,000 two years in a row gets a $25,000 raise to $100,000 and stays for only an additional year, his retirement still goes up. Say the employee retires after 40 years. He automatically retires at 100 percent of his salary. Not the $100,000 level, but not the $75,000 level, either. Two years at $75,000 is $150,000. Add the one year at $100,000 and you get $250,000. Divide that by three years and his retirement is $83,000. So, by jacking his salary up by $25,000 for one year, he gets an additional $8,333 per year for the rest of his life.

In California, pension spiking could increase public pension costs as much as $796 million over the next 20 years the state controller said recently.

Besides West, here is pay raise information for a few other Louisiana employees since 2010:

  • Kathy Klebert, Assistant Secretary, Department of Health and Hospitals from July 1, 2010, to Jan. 21, 2011 at salary of $140,000; promoted to Deputy Secretary on Jan. 22, 2011 at salary of $145,000; named DHH Secretary on April 1, 2013, at salary of $236,000 upon resignation of Bruce Greenstein. Overall increase of 68.6 percent since 2010.
  • Ruth Johnson, former head of the Department of Children and Family Services—retired at salary of $130,000 per year on June 21, 2012, re-hired on May 27, 2013 as Director of Accountability and Research in the Division of Administration at $150,000; promoted to Assistant Commissioner on Sept. 30, 2013, at $170,000; promoted to Director’s title in the governor’s office on Feb. 24, 2014, at $180,000. Overall increase of $50,000 (38.5 percent) since June 21, 2010.
  • William Guerra, hired as State Budget Management Analyst 3 on May 3, 2010 at $48,500, promoted to Chief Operating Officer for the Office of Group Benefits on Feb. 20, 2014, at $107,000 per year, a four-year increase of $58,500, (120.6 percent).
  • Courtney Phillips, hired on Oct. 1, 2010, as a Program Manager 2 at a salary of $93,000, was named DHH Deputy Secretary at $145,000 per year on May 10, 2013, a three-year increase of $52,000 (55.8 percent).
  • William Jeffrey Reynolds, named DHH Medicaid Deputy Director on May 31, 2011, at a salary of $113,700, promoted to DHH Undersecretary on March 10, 2014 at $145,000, a three-year raise of $31,300 (27.5 percent).
  • Calder Lynch, hired on Oct. 25, 2010 as DHH Press Secretary at $52,000, on Aug. 26, 2013, was named Kleibert’s Chief of Staff at a salary of $118,000, a raise of $66,000 (126.9 percent).
  • Thomas Enright started on Mar. 8, 2010, as Executive Counsel for the Department of Veterans Affairs at $104,000 and on Feb. 4, 2013 was hired as Jindal’s Executive Counsel at $165,000, a $61,000 increase in only three years (58.7 percent).
  • Jane Patterson was an IT Telecommunications Technical Services Administrator on Nov. 18, 2012, at a salary of $126,000 and an IT Telecommunications Administrator on Oct. 1, 2013, at a salary of $131,500, a raise in less than a year of $4,900 (3.9 percent).
  • Christopher Guilbeaux was an $85,200-a-year Section Chief for the Governor’s Office of Home Security and Emergency Preparedness (GOHSEP) on June 29, 2011. Two years later, on Oct. 1, 2013, he was a $130,000-a-year Deputy Director, a raise of $44,800 (52.6 percent).
  • Stephen Chustz was appointed as Section Head at the Department of Natural Resources on Aug. 9, 2012 at $129,200, up $25,600 (24.7 percent) from his $103,600-a-year salary as Deputy Assistant Secretary on Sept. 30, 2011.
  • Jerome Zeringue has gone from Deputy Director of the Governor’s Coastal Protection and Restoration Authority at $126,250 in July of 2011 to advisor to the governor at since last Feb. 28 at $160,000, a $33,750 (26.7 percent).
  • Thomas Barfield came on board as Jindal’s Executive Counsel in July of 2009 at $167,000 per year but by July of 2013, he was the $250,000 per year Secretary of the Department of Revenue (DOR), a three-year increase of $83,000 (49.7 percent).
  • What’s the difference between an Assistant Secretary and a Deputy Secretary? Apparently, about $19,100 a year. Jarrod Coniglio went from Assistant Secretary of DOR on Oct. 15, 2010 at $107,800 to Deputy Secretary on July 1, 2013, at $127,000 (a 17.7 increase).
  • In just over a year, Andrew Perilloux went from Assistant DOR (May 27, 2013) at $90,000 to Under Secretary on Aug. 18, 2014 at $107,800, an increase of $17,800 (19.8 percent).
  • Joseph Vaughn, Jr. was making of $69,000 on Jan. 29, 2012, as an Assistant Director of DOR and was named Assistant Secretary on Jan. 30, 2012 at a salary of $107,800, a raise of $38,800 (56.2 percent).
  • Noble Ellington (you remember him, the legislator who retired and went to work as Deputy Commissioner of Insurance) is making $162,100 in that position, up $6,200 (up 4 percent) from Oct. 1, 2012.
  • Kyle Plotkin, the New Jersey import started out in the governor’s office on Nov. 19, 2008 as Press Secretary and on July 26, 2011, was named Special Assistant to the governor at $85,000. Less than three years later, on Mar. 4, 2014, he was named Chief of Staff at $165,800, a three-year increase of $80,800 (95 percent).
  • Michael Reed of Boston began as an $80,000-a-year Deputy Director of Communications on Feb. 4, 2013 and a year later was Director of Communications at $90,000 (12.5 percent).
  • The difference between Administrative Assistant and Executive Assistant apparently is $24,000. Elizabeth “Lizzy” Rayford Bossier was making $30,000 on Sept. 10, 2012, as an Administrative Assistant in the governor’s office. By July 22, 2013, she was making $54,000 as an Executive Assistant, an increase of $24,000 (80 percent).
  • Melissa Mann has gone from Executive Assistant in the governor’s office in February of 2010, at $54,000 to Assistant Director of Legislative Affairs on March 3, 2014, at $95,000, a $41,000 (75.9 percent) increase.
  • Elizabeth Murrill went from being the governor’s Executive Counsel on Nov. 5, 2010, at $110,000 to Executive Counsel and Chief Texter for the Division of Administration on Oct. 16, 2012, at $165,000, an increase of $55,000 (50 percent).
  • Ileana Ledet was making $63,300 a Public Information Director 2 for the Department of Insurance (DOI) on Feb. 7, 2011, and on Oct. 1, 2013, whe was earning $127,400, an increase of $64,100 (101.3 percent).
  • Keith Lovell was making $83,300 as a Coastal Resources Scientist Manager for the Department of Natural Resources (DNR) in May of 2010, and by April 1, 2013, he was making $109,200 as Assistant Secretary of DNR, an increase of $25,900 (31 percent).
  • Barry Landry was making $70,000 a year as a Public Information Director 1 for the Department of Education (DOE) on Jan 27, 2014 and less than five months later, on June 2, was making $85,000 as Press Secretary, a $15,000 (21.4 percent) increase.
  • Marian Lee Schutte was making $60,000 as a Coordinator for DOE on Dec. 2, 2011, and on July 22, 2013, she was a director earing $75,000, an increase of $15,000 (25 percent).
  • Robert Keogh has been a Procurement Director for DOE’s Recovery School District (RSD) since June of 2012 but his salary has also jumped $15,000 (25 percent) in two years, from $60,000 to $75,000 on May 12, 2014.

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In 2011, two agencies within the Louisiana Department of Public Safety (DPS) entered into a pair of contracts with a company called CTQ Consultants totaling $38,400 to eliminate waste and to increase efficiency in the Office of Motor Vehicles ($22,400) by employing a combination of a trendy management method and to decrease the average DNA purchasing process turn-around time ($16,000).

Taken at face value, $38,400 is not an exorbitant amount for two contracts given some of the contracts awarded by the state. The infamous $270 million CNSI contract comes to mind. So does that $7.4 million consulting contract the state awarded Alvarez & Marcel (A&M) Consultants to track down $500 million in savings.

But then DPS promptly placed CTQ’s only employee, Kathleen Sill, on the state payroll as a $140 per hour state employee and proceeded to pay her $437,000 in salary over the next 28 months.

That’s $437,000 for her personally, not for her company.

Additionally, DPS paid $12,900 in air travel for 21 flights for Sill between Baton Rouge and CTQ’s Columbia, S.C., home office between Jan. 6, 2012 and March 2014, according to records obtained by LouisianaVoice.

The first contract, for $16,000, was awarded to CTQ by the Office of State Police on Feb. 1, 2011. That contract expired three months later, on April 30, 2011.

On Aug. 1, 2011, the $22,400 contract was awarded by the Office of Management and Finance. That contract expired five months later, on Dec. 31. Among the objectives of that contract was one that called for CTQ to assist in “streamlining including the operations of the Office of Motor Vehicles (OMV).”

State Police Superintendent Mike Edmonson heads DPS in his dual role as Deputy Secretary and oversees, besides State Police, the Office of Management and Finance, the Office of Motor Vehicles, the Louisiana Highway Safety Commission, the Office of State Fire Marshal, the Louisiana Oil Spill Coordinator’s Office and the Liquefied Petroleum Gas Commission. http://www.dps.louisiana.gov/deputy.html

On Jan. 1, 2012, one day after the second contract expired, Sill was placed on the state payroll as an employee/consultant and remained employed until May 1, 2014, records show.

So, what is CTQ and who is Kathleen Sill?

Well, if McKinsey & Co. is considered the world’s premier business consulting company, Alvarez & Marsal might best be considered Mac Lite and CTQ as something several rungs down in the consulting pecking order. It’s a typical touchy-feely out-of-state organization that makes suggestions on to how local administrators can best do their jobs—after waltzing in, analyzing, discussing and writing expensive reports—all in a matter of a few weeks or months, as in the case of CTQ. Or, in Sill’s case, 28 months.

Sill formed CTQ in 2009 after spending more than 30 years with Bank of America as a “quality and productivity executive.”

The CTQ web page has an about us feature but when we clicked on it, only Sill’s profile appeared on the screen. No other employees of the firm are identified anywhere on the web page. http://www.ctqconsultinggroup.net/index.php?option=com_content&view=article&id=2&Itemid=5

CTQ and Sill specialize in something called Lean Six Sigma, which Sill says is an abbreviated form of Six Sigma that draws upon her Six Sigma training and hands-on experience “to identify and implement results-driven solutions for your business.”

Six Sigma is a set of techniques for process improvement that was developed by Motorola in 1986 and General Electric adopted the program for its business strategy in 1995.

The program attempts to improve the quality of process outputs by identifying and removing causes of defects by employing a set of quality management methods and creates a special infrastructure of employees within an organization (“Champions,” Black Belts,” “Green Belts and “Yellow Belts”) who are experts in infrastructure methods.

Lean_Six_Sigma_Structure_Pyramid.svg[1]

The name Six Sigma originated from terminology tied to manufacturing, especially terms associated with statistical modeling of manufacturing processes.

Sigma indicates its yield or percentage of defect-free products it creates while a six sigma process is one in which 99.00066 percent of the manufactured products are statistically expected to be defect-free (3.4 defective parts per million).

According to Wikipedia.org, Six Sigma doctrine asserts:

  • Continuous efforts to achieve stable and predictable process results are of vital importance to business success.
  • Manufacturing and business processes have characteristics that can be measured, analyzed, controlled and improved.
  • Achieving sustained quality improvement requires commitment from the entire organization, particularly from top-level management.

Features that set Six Sigma apart from previous quality improvement initiatives include:

  • A clear focus on achieving measurable and quantifiable financial returns from any Six Sigma project.
  • An increased emphasis on strong and passionate management leadership and support.
  • A clear commitment to making decisions on the basis of verifiable data and statistical methods, rather than assumptions and guesswork.

Just how all this applies to the Department of Public Safety and how it justified an expenditure of $450,000 remains unclear.

Asked why Sill was placed on the state payroll as an unclassified employee instead of being retained as a contractor, DPS explained that the department “utilized a Civil Service hiring option to employ Ms. Sill as a WAE (when actually employed) due to the length of proposed projects underway or planned. This allowed her to perform projects across various state agencies as a state employee.”

One explanation might be the $50,000 plateau for contracts. Any contract of $50,000 or more must be approved by the Office of Contractual Review.

A better reason could be that contracts are easier for prying eyes to spot and more susceptible to prompting questions from nosy reporters than an otherwise low key state hire.

But if the results of “streamlining operations of OMV” can be used as a barometer, the efforts of CTQ and Sill are less than auspicious. One need only make a trip to one of the local DMV offices gutted by Gov. Bobby Jindal’s employee layoffs to witness the interminable delays brought on by his privatization obsession. And while you’re waiting, don’t take it out on the overworked, stressed-out employees. Just remember to thank Jindal—and Lean Six Sigma.

And bring a good book to read while you wait.

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Tomorrow (Aug. 15) is the last day for 24 employees of the Office of Group Benefits (OGB) but the bad news doesn’t end there, LouisianaVoice has learned.

Commissioner of Administration Kristy Nichols’ glowing guest column about the condition of OGB in Jeremy Alford’s Louisiana Politics notwithstanding, some 230,000 state employees, retirees and their dependents are in for some serious sticker shock.

http://lapolitics.com/2014/08/nichols-ogb-prepared-for-changing-world-of-health-care/

Even as Nichols babbled on about providing “better service and care to its members” while at the same time employing the by now tired and time-worn Jindal tactic of blaming everyone but Jindal for rising health care costs, the Legislative Fiscal Office was dropping a bombshell in announcing dramatic increases in health care insurance premiums for state employees coupled with benefits that will be undergoing deep cuts.

OGB Report_July 2014 FOR JLCB

Blaming the Affordable Care Act (Obamacare) and an aging population for rising health care costs, Nichols said “financially responsible practices” are necessary to continue providing benefits. She conveniently neglected to mention that it was the Jindal administration’s decision a year ago to lower premiums as a means of lowering the state’s 75 percent match, thereby freeing up money to plug gaping holes in Jindal’s makeshift budget.

That move, of course, help decimate OGB’s reserve fund. What started out as a $540 million surplus a year ago now stands at less than half that.

“At first glance it may seem like having a fund that large is a great thing,” she wrote. “But in reality, keeping hundreds of millions unnecessarily locked up in a reserve fund was not the best use of taxpayer money.

“Considering that the state funds 75 percent of member premiums through taxpayer dollars, letting that large of a balance sit unused meant that those funds weren’t being used for other important projects,” she said.

Nichols, of course, overlooks the fact that successful insurance companies keep health reserve funds in cases of a natural disaster or major epidemic. Companies who only manage to pay claims out of premiums on the other hand, traditionally don’t survive.

Her entire 800-word piece never once mentioned that state employees and retirees would soon be asked to pay significantly higher premiums for equally significantly reduced benefits. Instead, she parsed words, saying, “Plan changes for fiscal year 2015 are estimated to lower expected claims costs by $131.8 million…”

That sounds pretty good until you read the first page of the nine-page report released Monday by Legislative Fiscal Officer John Carpenter and Legislative Fiscal Office Section Director J. Travis McIlwain.

State employee health plan changes, according to the report, include, among other things:

  • An increase in premiums state employees and retirees pay for health coverage;
  • Significantly increase the out-of-pocket maximum for all health plan options;
  • Increasing deductibles for all health plan options;
  • Increasing co-pays 100 percent for those proposed health plans with co-pays;
  • Increasing the out-of-pocket maximum for the prescription drug benefit by $300 from $1,200 to $1,500 per year, a 20 percent increase;
  • Requiring prior authorizations for certain medical procedures;
  • Eliminating the out-of-network benefit for some health plan options;
  • Removing all vision coverage from the health plan options.

The latest premium increase of 6 percent will go into effect on Jan. 1 is on top of a 5 percent increase implemented on July 1 of this year.

Of course, the revamp of OGB premiums and benefits was the result of the infamous Alvarez & Marsal (A&M) study.

The really amazing thing about that is Jindal rushed into the OGB privatization convinced he could do no wrong and that his was the only way and that the state was going to save millions. Yet, when things started going south, he calls in the big A&M guns.

Not only that, he forked over $199,752 to A&M to learn the best way to screw state employees.

Speaking of A&M, the contract with the firm was originally for a little more than $4.2 million but was promptly amended by $794,678, bumping the amount up to a cool $5 million. The problem with that is state law allows only a one-time contract amendment of no more than 10 percent without legislative concurrence. The amendment was for 18.9 percent.

As if that were not egregious enough, the Division of Administration subsequently amended the contract by yet another $2.4 million in May—again without bothering to obtain the legally mandated concurrence from the legislature.

Nothing, it seems, is beneath this administration.

Well, don’t say you weren’t warned. LouisianaVoice said before the OGB privatization ever took place that it would be necessary to raise premiums or lower benefits.

But Jindal, wunderkind that he is, insisted his privatization plan, ripped straight from the pages of the handbook of his only private sector employer, McKinsey & Co., would be more cost efficient than having those lazy state workers process claims and that the state would save money.

And lest you forget, McKinsey advised AT&T in 1980 there was no future in cell phones.

And of course, McKinsey developed the flawless business plan for Enron.

To a degree Jindal is correct; the state will now save money—on the backs of state employees.

State Rep. John Bel Edwards (D-Amite), who is an announced candidate for governor in the 2015 election agrees.

“The OGB fiasco is proof positive that privatization for the sake of privatization is foolish,” he said. “A reserve balance that recently exceeded $500 million is half that now and  bleeding $16M per month due to mismanagement and budget chicanery, and the ultimate price will be paid by state retirees and employees through higher premiums, higher co-pays, higher deductibles, and higher co-insurance in exchange for fewer benefits, more forced generic drugs, and more preclearance of needed treatments and other changes that make crystal clear that the OGB beneficiaries will pay more for less.”

Bingo! And right on cue, Carpenter’s report echoed Edwards:

“The health plan and prescription drug plan policy changes…will shift more of the costs from the state to the OGB plan member,” it said.

That shift will save the state a minimum of $44.7 million for health plan changes and at least $69 million for prescription drug plan changes in fiscal year 2015, the report said.

“Along with premiums, the major costs incurred for medical services by an OGB plan member will be deductibles, co-payments and coinsurance,” it said. “The new health plan offerings will significantly reduce the cost to OGB, while the OGB members pay more for their medical services.”

Of the total OGB population, 75 percent are currently enrolled in the HMO plan which presently has no deductible for the employee but those members will, effective January 1, be subject to both a deductible and coinsurance whereas most are currently subject only to fixed co-pays.

 

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It’s the story that won’t die, no matter how the Runaway Governor (apologies to Julia Roberts) would like it to.

While Gov. Bobby Jindal may go running off to Iowa or New Hampshire or Washington, D.C., or wherever his latest odyssey takes him in his futile attempt at resuscitation of his moribund presidential aspirations while ducking his responsibilities at home, folks like political curmudgeon C.B. Forgotston and State Treasurer John Kennedy just won’t go away.

Instead, Kennedy is staying home and demanding answers to the nagging problem of the Edmonson Amendment that Jindal so obligingly signed into law as Act 859, giving State Police Superintendent Mike Edmonson that $55,000 bump in retirement income.

Act 859, which began as a bland, nondescript bill by Sen. Jean-Paul Morrell (D-New Orleans) that addressed procedures in cases where law enforcement officers are under investigation, quietly turned into a retirement bonanza for Edmonson.

That happened when State Sen. Neil Riser (R-Columbia) inserted language into a Conference Committee amendment to the bill that allows Edmonson and one other state trooper in Houma to revoke their decisions of several years ago to enter into the Deferred Retirement Option Plan (DROP) which gave them higher take home pay but froze their retirements at their pay level at the time of their decision.

In Edmonson’s case, his payment was frozen at 100 percent of his $79,000 a year captain’s pay but Act 859 allows him a do-over and to act as though all that never happened so that he can retire at 100 percent of his $134,000 per year colonel’s pay instead.

Other state troopers, teachers and civil service employees who made similar decisions, meanwhile, are stuck with their decisions because….well, sorry, but this is special for Col. Mike Edmonson Esq. Swank. Riff raff need not apply.

The Louisiana State Police Retirement System (LSPRS) board is scheduled to receive a special report by Florida attorney Robert Klausner, an acknowledged authority on public retirement plans, and local attorney Denise Akers at its Sept. 4 meeting but Kennedy isn’t waiting that long.

As State Treasurer, Kennedy holds a seat on the LSPRS board and he has repeatedly voiced his concern over the amendment which he says could put enormous strain on LSPRS if other retired state police officers file suit to obtain similar consideration as Edmonson.

He has claimed the board has a fiduciary responsibility to file suit to overturn the new law that Jindal so hastily signed.

A group of retired state troopers also has signaled its willingness to enter into litigation to get the law overturned.

Both Kennedy and the retired troopers contend the law is unconstitutional because it was not properly advertised in advance of its passage.

“Talking points” originating in State Police headquarters by Capt. Jason Starnes and sent to Edmonson, his Chief of Staff Charles Dupuy, and—for whatever reason—Louisiana Gaming Control Board Chairman Ronnie Jones, said the bill was properly advertised but because the bill in its original form in no way addressed retirement issues, that claim appears rather weak, especially given the fact that state police should be more skilled in producing hard evidence to back their cases.

The additional fact that the amendment never made its appearance until the last day of the session even though it had been discussed weeks before adds to the cloud of suspicion and wholesale chicanery enveloping Jindal, Riser, Edmonson, and Dupuy.

And Kennedy, who already has fired off two previous letters to LSPRS Executive Director Irwin Felps demanding a full investigation of the rogue amendment, now has written a third.

That letter, dated today (Aug. 13), while much shorter than the others, loses no time in getting right to the point: Kennedy is demanding under the state’s public records statutes (La. R.S. 44:31, et seq.) that Felps provide him a copy of the report generated by Klausner and/or Akers.

“Please immediately email the document(s) requested to me,” he wrote. “If you cannot or will not email them, please immediately inform me, and I will send a representative to your office to pick them up right away.”

Here is the link to his letter: Treasurer Kennedy Public Records Request to Irwin Felps August 13 2014

His letter sets the stage for a probable showdown between Kennedy and the rest of the board given the fact that Felps has previously denied Kennedy’s informal request for the report.

Felps said following Kennedy’s initial request, he was advised by legal counsel (most probably Akers) to release the report to the board members but not to the general public. He added that he expected Kennedy will have the report Thursday morning.

“I don’t know why the big cloak and dagger that they won’t share with the board,” Kennedy told the New Orleans Times-Picayune. http://www.nola.com/politics/index.ssf/2014/08/john_kennedy_demands_state_pol.html#incart_river

“I’m a board member and I’m entitled to it. They can’t tell me I can’t see it,” Kennedy said. “This is a very important issue and it’s not just limited to state police. We have thousands of employees in the retirement system (who) didn’t get this treatment.

“I just want to see a report that I asked for and the board asked for. It is a public document.”

Kennedy should know better. LouisianaVoice has already received its comeuppance from the House and Senate, both of which have refused to comply with our request for copies of emails and text messages between the six Conference Committee members who approved the amendment and Jindal, Edmonson or any of their staff members.

Even though such discussions would have fallen under the narrowest of definitions of public business, we were told the public has no business peeking over legislators’ shoulders to see what they’re doing and to please just butt out.

LSPRS board Chairman Frank Besson, president of the Louisiana State Troopers Association, told the Times-Picayune in a statement (prepared as talking points by Starnes, perhaps?) that he felt it would be “inappropriate and premature” for the board to take a position on Act 859 until it heard the attorneys’ report.

Uh, Trooper Besson, would that be more or less “inappropriate” than passing a secretive bill in the final hours of the session to benefit one person (well, two, since one other trooper fell within the strictly limited parameters of the bill’s language) while no one was looking?

Just as a reminder, it’s going to be difficult to get the board off dead center on this issue considering the board’s 11-person membership is comprised of four active troopers, Commissioner of Administration Kristy Nichols and one of Jindal’s legislative puppets, State Sen. Elbert Guillory (R/D/R-Opelousas), chairman of the Senate Retirement Committee (you can almost see Jindal’s lips move when he talks).

Just in case you lost count, that’s six members that Jindal and Edmonson control—and that’s a majority.

Folks, it’s looking more and more like that group of retired state troopers is going to have to make good on that threat to file a lawsuit challenging the constitutionality of the act.

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Call it coincidence, but the Baton Rouge Advocate today had an interesting lead editorial thanking State Police Superintendent Mike Edmonson and Gov. Bobby Jindal for assigning 100 state troopers to patrol the city of New Orleans through Labor Day in response to a Bourbon Street shooting spree on June 29 that left one dead and nine others injured. http://theadvocate.com/news/opinion/9965586-123/our-views-thanks-to-state

Certainly the timing of the editorial had nothing to do with the controversy swirling around the secretive passage of an obscure Senate bill during the last day of the recent legislative session that proved financially beneficial to Edmonson.

And certainly it had nothing to do with the fact that Advocate publisher John Georges wants to keep Edmonson happy because Georges holds a majority ownership in seven firms which provide video gambling machines and other services to gambling establishments—and because Edmonson oversees gaming through the State Gaming Control Board chaired by Ronnie Jones who served as Edmonson’s confidential assistant prior to his appointment to the Gaming Control Board. He is still listed as Edmonson’s confidential assistant on the State Police web page even though Jones says he resigned from that position last August. http://www.nola.com/news/index.ssf/2008/02/john_georges_gets_back_into_ga.html

Jones denies any knowledge of Georges’ video poker interests and says Edmonson is not his boss. “I wouldn’t know John Georges if he walked in the room right now and the fact that he has gaming interests doesn’t impress me,” he said, adding that Edmonson “has no control or influence over my board or its decisions.”

Jones’s denials notwithstanding, it appears we can dismiss any chance that the Advocate might delve into the murky political machinations behind the amendment especially tailored for Edmonson (though it did catch one other state trooper up in its generous net).

House Speaker Chuck Kleckley refused to open an investigation into the infamous Edmonson Amendment because he said the amendment was part of a bill that originated in the Senate. But one would expect no action from Kleckley. Otherwise, Jindal might remove his hand from his butt and Kleckley would then be rendered unable to speak—not that he’s ever said anything profound anyway.

The amendment, of course, tacked on an additional $55,000 per year to Edmonson’s retirement benefits and though Edmonson has since said he will not accept the extra income, he apparently overlooked the fact that the bill is now law, thanks to Executive Counsel Tom Enright’s stamp of approval and Jindal’s signing it as Act 859, which makes it impossible for him to arbitrarily refuse the financial windfall.

And it’s true enough that, Senate Bill 294 by Sen. Jean-Paul Morrell (D-New Orleans) did originate in the upper chamber and we now know that the amendment was added by Sen. Neil Riser (R-Columbia) but Kleckley conveniently overlooked the fact that three members of the Conference Committee which tacked on the amendment were members of the House.

But what about Senate President John Alario, Jr. (R-Westwego)? Certainly the esteemed Senate President would never let such a furtive move stain the stellar reputation of the Louisiana upper chamber. Surely he will launch a thorough investigation of the amendment since the bill and the ensuing amendment were the works of members of the Senate.

Don’t count on it. It’s rare that an elected official will bite the hand that feeds him—or a family member.

In this case, we’re speaking of one Dionne Alario, also of Westwego, who just happens to hold the title of Administrative Program Manager 3 for the Louisiana Department of Public Safety at $56,300 per year. She was hired last November and somehow manages to pull off the unlikely logistics of supervising DPS employees in Baton Rouge while working from her home in Westwego.

Oh, did we mention that she also just happens to be Sen. John Alario’s daughter-in-law?

We attempted to contact her at the Baton Rouge headquarters through the DPS Human Resources Department but we were given a cell phone number with a 504 (New Orleans) area code.

So if you expect Alario to conduct an investigation into the Edmonson Amendment, you can fuggedaboutit. It ain’t happening. His nest has been sufficiently feathered as to guarantee there will be no questions on his part.

It’s beginning to look more and more like the ol’ Louisiana political science professor C.B. Forgotston is correct: This entire Edmonson Amendment affair is quickly being swept under a very big rug.

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Results from a public records request submitted to the Louisiana State Police by LouisianaVoice for emails related to the now notorious amendment to Senate Bill 294 did not produce any communications between legislators and Superintendent of State Police Mike Edmonson or his staff but a couple of the emails we got did reveal a rather defensive mode on the part of the powers that be at state police headquarters.

Not that we really expected full disclosure in releasing any damning emails in light of the response to a similar public records request by both the House and Senate that public business conducted by the legislature via emails and text messages is none of the public’s business.

Considering the brand of “transparency and openness” exhibited by the Jindal administration and the legislature’s willingness eagerness to roll over and play dead at the governor’s command, we should not have been surprised.

Typical of the attitude of this administration from top to bottom, including the Department of Public Safety and state police, is one particular email from Capt. Jason Starnes of the State Police Operational Development Section to several administrative types, including Edmonson, Ronnie Jones and Edmonson’s Chief of Staff Charles Dupuy on Wednesday, July 16.

The subject line of the email said, “RE: Advocate news story,” but Starnes’s message focused instead to the presence of our reporter Robert Burns at the meeting of the Louisiana State Police Retirement System (LSPRS) board which met on Tuesday, July 15, to discuss the ramifications of the SB 294 amendment which was quickly signed into law as Act 859 by Gov. Bobby Jindal.

Burns videotaped that meeting as well as an interview with board member State Treasurer John Kennedy following the meeting and posted both clips online.

“Here is the link to the video footage taken by Mr. Burns (whoever he is, wherever he came from and why he is so concerned about the LSP (Louisiana State Police) retirement system I have no idea),” Starnes wrote (emphasis ours).

So, if we read this correctly, Louisiana taxpayers have no business attending public meetings and have no right to concern themselves with such matters of infinite financial exposure created by subterfuge perpetrated by Edmonson’s staff (so Edmonson claims), a cooperative legislator in the person of Sen. Neil Riser (R-Columbia), and most likely, a conspiratorial governor whose brilliant idea it was to bump Edmonson’s retirement pay by a cool $55,000 or so a year.

On Tuesday, the day before Starnes expressed his apparent antipathy toward Burns, he authored an earlier email to Dupuy, Jones and State Police Public Affairs Commander Capt. Doug Cain in which he offered suggested talking points regarding the amendment controversy which was beginning to attract widespread media attention.

“Here is a draft of talking points and other legislative precedent,” he said, apparently setting the stage for an intricate misdirection campaign by citing other legislative acts dealing with state police retirement but which were not related to the amendment to SB 294.

“Please let me know if there or (sic) any other points that I failed to include,” he added.

Starnes then proceeded to list his proposed “talking points” which he grouped under specific headings, the first of which was:

What does ACT 859 do?

  • ACT No. 859 provides active members of LSP who entered DROP (before it was repealed in 2009) with an actuarially adjusted longevity retirement benefit when they retire.
  • The member must have been continuously employed since completing the DROP program.
  • The total retirement benefit will be equal to the benefit that such member would have received had he not entered DROP (the key element of the amendment) and cannot exceed 100 percent of the member’s final average annual salary (this corrects an earlier incorrect report that Edmonson would receive 100 percent of his salary plus $30,000 per year).
  • The actuarial cost associated with SB 294 (Act 859; Starnes uses the bill number and act number interchangeably, which could be confusing to some) will be paid from the balance in the Experience Account (Notice there is no mention that the Experience Account is intended to provide cost of living increases for retired troopers and their widows and children.).
  • The legislation does not rescind the DROP decision by the member and does not alter that benefit. This legislation provides for an actuarial adjustment to account for member that has continued to make contributions into the retirement system since completing the DROP program and would otherwise be eligible for full retirement benefit based on their actual years of service (This is where the financial exposure puts the LSPRS—and other state retirement systems—at risk by opening the door for others to sue for the same consideration.).

Legislative precedents

  • 2001—ACT No. 1160 was passed that increased the accrual rate from 2.5 percent to 3.33 percent for all active members of (LSPRS). This legislation was retroactive to date of hire and resulted in numerous members becoming instantly eligible for full retirement benefits. The estimated cost for this benefit was approximately $9.4 million. The ACT (we don’t know why Starnes capitalized “ACT” throughout his email) included those members that (sic) had entered DROP prior to June 30, 2001. This provision provided those members with an adjustment increase to their retirement benefit after entering DROP. (This simply means that instead of computing retirement benefits by multiplying the average salary for a members top three years of earnings by the number of years of service by 2.5 percent—$100,000 X 40 years X 2.5 percent would equal an annual retirement benefit of $100,000 or 100 percent of his/her salary—the years of service would now be multiplied by years of service by 3,33 percent, thus allowing one making $100,000 to retire at 100 percent in 30 years instead of 40—$100,000 X 30 X 3.33 percent. All other state employees’ retirements remain computed at 2.5 percent.).
  • 2003—ACT No. 748 was passed to provide a longevity adjustment to members that had previously entered the DROP program. This adjustment was the greater of a new calculated benefit (per statute) or 20 percent. All members affected by this legislation received a minimum of a 20 percent increase to their retirement benefit. The estimated cost for this benefit was approximately $1.03 million.
  • 2009—ACT No. 480 was passed that eliminated the DROP program and instituted the “Back-DROP” program. This was passed to improve benefits to active members who were required to make retirement decisions prior to necessarily completing their careers with the department. (Note: Edmonson said on the Jim Engster Show that he was forced into DROP. That is incorrect. While members were required to make a decision whether or not to enter DROP, no one was forced to enter the program.). This eliminated members being forced to make retirement decisions that adversely impacted their benefits. Both ACT 1160 and ACT 748 addressed those members in adverse retirement situations.

Notes

  • Act No. 859 simply follows other legislative precedents to address retirement adjustments for members remaining employed with the department following completion of the DROP program. (Well, maybe, but why was it done so surreptitiously? That would seem to be the key question that should be addressed here.).
  • This is an actuarial adjustment that will provide the same benefit as those who received full retirement benefits following the requisite number of years of service (Again, and not to beat a dead horse, Edmonson made a decision that no other employee throughout state government is allowed to revoke, a special benefit extended to him and one other trooper only.).
  • The members affected by the legislation have continued to pay into the retirement system since completed (sic) DROP.
  • Members will not receive more than 100 percent of their final average salary.
  • This legislation will not negatively impact the benefits of any retiree (other than drawing down the Experience Account).
  • There has been clear legislative precedent set to protect and adjust the retirement benefits for those members that (sic) have been negatively impacted by the DROP program (But again, that legislation was done openly, not sneaked in as an amendment to an unrelated bill during the final hectic hours of the legislative session.).
  • Public notice regarding the retirement legislation was published in The Advocate on Jan. 2-3, 2014 (Once again, we have unanswered the question of why then, did it become necessary to do this as a furtive amendment on the last day of the session?).
  • The conference committee report is deemed to be germane to the original bill in that it deals with rights of law enforcement officers which include the rights to retirement benefits per statute (This is the biggest stretch lie of all; the original bill dealt with disciplinary procedures to be used when law enforcement officers are accused of wrongdoing. That’s all. How can a pension amendment affecting only two officers possibly be germane to that?).

There also were copies of a series of email sent back and forth between Edmonson and the governor’s office in an attempt to schedule a last-minute attendance at a Sunday bill signing by Jindal that turned in something of a comedy sketch with Edmonson seeming to lose his patience in the final email.

The five bills all dealt with retirement and were to be signed on Sunday, June 1, that had everyone scrambling to round up warm bodies to attend the signing ceremony.

On Saturday, May 31, at 6:34 p.m., Shannon Bates, deputy communications director for the governor’s office, wrote, “Tomorrow we are having a bill signing ceremony for the retirement reform bill by

(Rep. Joel) Robideaux (R-Lafayette) and the 4 (Sen. Elbert) Guillory (R/D/R-Opelousas) COLA bills,” Bates wrote. “I know that is a Sunday but a lot of stakeholders are able to attend since the lege is in session anyway. Do you know if someone from the State Police system could attend or at least send us a quote for the release? (Nothing like waiting until the last minute to throw things together). We are having problems getting into (sic) touch with them…”

Nine minutes later, Edmonson responded: “Yes we will get somebody there.”

Three minutes following Edmonson’s reply, Shannon wrote, “Thank you – if you could let me know who it is that would be great!”

At 6:52 p.m. Edmonson Chief of Staff Dupuy wrote that he felt TFC Frank Besson, president of the Louisiana State Troopers Association, should accompany Edmonson to the event.

Edmonson, at 7:03 wrote to Dupuy, “He (Besson) needs to call Shannon for a quote.”

“Ok,” replied Dupuy 10 minutes later.

At 7:52, an apparent nervous Edmonson wrote to Besson: “Frank, have you handled?”

“Yes, sir,” answered Besson at 8:14 p.m. “I just spoke with Natalie (no last name available) to get the time, which will be 1:30.”

Edmonson, at 8:20 p.m., wrote to Besson: “Shannon is the contact. Make sure she gets a quote. I will be with you.”

“I’ll send her something tonight,” Besson answered.

At 8:25, Edmonson, apparently by now a little agitated, wrote Besson: “Get with Doug (Cain) and handle now. It should not have taken six emails.”

(Actually, including the emails from Bates, there were 11—eight between Edmonson and his subordinates—but who’s counting?)

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By Stephen Winham

I was among a distinct minority of people in state government who thought adding DROP to our state retirement systems was a bad idea for the state from the outset. It clearly provided a good benefit for employees at a time when state salaries were not nearly so generous as today, but I was concerned about the real costs, not just to retirement systems, but to agencies’ active payrolls. I was also concerned about real and perceived inequities resulting from employees making decisions they would later regret. In my opinion, the existence of DROP in state retirement systems has generally failed to benefit the state financially or otherwise – And I find the whole concept of “Back DROP”, the State Police Retirement System option recently publicized in conjunction with the controversy over SB 294 of 2014, ridiculous on its face.

DROP for our state retirement systems seemed to at least have sensible goals when originally implemented and estimating the fiscal impact seemed relatively easy for an actuary. Simply put, an employee, who would otherwise be entitled to retire, continued working and drawing a pay check. The amount that would have been paid the retired employee in monthly retirement checks was frozen at that level and went into a DROP account each month while the employee continued to draw a salary. The employee did not have to make contributions to his/her retirement system while in DROP, so s/he got an immediate increase in net pay and could continue to get raises, though they would not increase the retirement benefit amount. When the employee actually retired s/he could get the balance in the DROP account and begin to receive monthly retirement checks.

DROP was sold as a way to retain experienced employees for a period of time beyond when they might otherwise actually retire by providing them with an additional incentive. It was also supposed to accomplish the almost contradictory goal of encouraging higher paid employees to actually retire at the end of DROP participation. This would reduce the amount of money necessary for salaries overall and/or create additional promotional opportunities and openings for other employees.

So, DROP was viewed by most as a simple, predictable benefit for both the state and its employees. But, guess what?   It has rarely worked that way and the reality of the way it does work begs the following questions:

  • How many people who participate in DROP would have really retired, when eligible, in its absence? Based on experience, the answer is very few. Therefore, the major ostensible advantage of DROP to the state, retention of experienced employees, would not seem to have actually been a state issue.
  • How many state employees with retirement eligibility are indispensable? Again, my answer would be very few. A significant percentage of indispensable employees would indicate gross understaffing, poor management planning, or both.
  • How many people who enter DROP actually retire at the end of DROP participation? My guess, again based on experience, would be significantly fewer than originally projected.

Because employees can come out of DROP and continue to work without skipping a beat, any expected salaries savings can evaporate quickly. In fact, high salaried people not already eligible for the absolute maximum in retirement benefits often continue to work an additional minimum of 3 years so they can start to accrue additional benefits to be paid as supplements to their “frozen” regular retirement checks. So, ultimate liabilities of the retirement systems are harder to project and salaries on the active payroll are often higher than they would have been otherwise.

The new option Colonel Mike Edmonson apparently wanted to take advantage of via SB 294 only exists in the State Police Retirement System and is called “Back DROP”. I had never heard of this before and still find it hard to believe it exists and was actually recommended by an actuary. It does absolutely nothing DROP was intended to do except encourage some people to simply work longer.

If I understand it correctly, under “Back DROP” the employee starts thinking about retiring and how to game the retirement system to his/her best financial advantage. As retirement eligibility approaches, s/he gets the system to run numbers so s/he can make the best choice when s/he actually retires between the following:

1. Pretending s/he entered DROP up to 3 years ago (going back to the future, in other words); or

2. Getting a lifetime benefit based on the highest average salary

Does that sound anything like DROP to you? Me, neither. It sounds like having your cake and eating it, too. Those eligible can’t possibly make the wrong decision – for them – and no pesky actuarial reductions in benefits like the Initial Benefit Option (IBO) that is available to all retirees.

Go to the following link, scroll down to “BACK DROP Plan – Only for Members Eligible for DROP after 10/01/2009” and see how you interpret the option: http://lsprs.org/retirement/options/

Now, think about it. How is it possible to get in the ballpark of figuring out how to adequately fund a benefit that doesn’t actually defer anything and lets those eligible choose the best option for them at the last possible moment?   How must the thousands of people who retired under regular DROP plans in all state retirement systems feel about the ability of anybody else to have this open-ended option?

Our retirement systems have total unfunded accrued liabilities of some $19 Billion. These liabilities did not crop up overnight but must, under existing law, be liquidated by 2029. How can any legislative action that extends state retirement benefits to those not previously eligible for them possibly do anything to help address this problem?

As Everett Dirksen said, “A million here, a million there, pretty soon you’re talking real money.” In Louisiana, we don’t seem to get the simple truth of that, and not just in our retirement policies.

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