The Marin Post

BREAKING NEWS - JANUARY 2016

CSPP PETITIONS COURT TO REQUIRE RETIREMENT BOARD TO ADDRESS VIOLATION OF ITS CONSTITUTIONAL DUTIES

On January 14, 2016, David C. Brown, a member of Citizens for Sustainable Pension Plans, filed a petition for a writ of mandamus with The First District Court of Appeal of California asking that it take certain actions with regard to the Board of Trustees of the Marin County Employees’ Retirement Association (MCERA). Download Petition. Download Press Release

OVERVIEW & CHRONOLOGY OF EVENTS

In 2015 the Marin County Grand Jury concluded that four jurisdictions (agencies) failed to comply with the requirements of CA Government Code Section 7507 prior to approving pension enhancements. The four agencies are the County of Marin, the City of San Rafael, the Southern Marin Fire District and the Novato Fire Protection District.

In their required responses to the Grand Jury all of them effectively said they had not fully complied with 7507. Yet, they did nothing. Why? CSPP surmises that it is because they are “political animals” and that doing nothing was the path of least resistance.

Although the Grand Jury did excellent work, it missed one significant opportunity in not requiring a response from the board of the Marin County Employee Retirement Association (MCERA).

In October of this year CSPP picked up the baton and has attempted to convince the Board to do the right thing.

The right thing to do would be to acknowledge (1) that there is, at the very least, a prima facie case that the benefits were unlawfully granted, (2) that it may be prohibited from paying them, (3) to place on its agenda a discussion of the topic, and (4) ultimately, to petition a court of appeal for guidance.

The documents below were received as a result of a California Public Records Act (CPRA) request made by Citizens for Sustainable Pension Plans to MCERA. All are public documents. All should be read.

Also publicly available is the audio recording of the MCERA Board meeting dated December 9, 2015 at which CSPP spoke in open time and in public comment after both the "trustees' comments" and "future meetings" sections of the agenda. It will soon be available on this website.

SEPTEMBER 14,2015

LETTER TO RETIREMENT BOARD OF TRUSTEES

Recently the press has been full of news about former Orinda-Moraga Fire Chief Nowicki and the action taken by the Contra Costa retirement board to reduce his pension and to recapture improper payments.

The following statement caught my eye. “It seemed to us that under the circumstances presented to this board that constituted improper behavior,” said Harvey Leiderman, the board’s attorney. “I’m not calling it illegal behavior. But I’m saying it is improper behavior, in our opinion.” Apparently, even "improper" behavior, behavior that has not been found to be illegal, is sufficient to void a pension increase and to recover overpayments. (READ MORE)

OCTOBER 5, 2015

RESPONSE TO CSPP BY LEGAL FIRM REPRESENTING THE BOARD

The Marin County Employees' Retirement Association (MCERA) Board of Retirement and Retirement Administration received your letter dated September 14, 2015, the Board Chair and Administrator have asked me to respond to you on their behalf.

The reference in your letter to the recent press articles describing actions taken by the Contra Costa County Employees' Retirement Association (CCCERA) Board of Retirement with respect to retirement benefits paid to former Orinda-Moraga Fire Chief Nowicki is interesting in light of MCERA's current challenges with a similar topic. (READ MORE)

DECEMBER 7, 2015

CSPP POINT-BY-POINT ASSESSMENT OF BOARD'S LEGAL RESPONSE

In conclusion, Ms. Dunning’s analysis of my letter to the board was inaccurate and incomplete. She admits she did not have all the facts and did not examine all the relevant points of law. She relied on a “suspicion”, one that was incorrect. She cited inappropriate and irrelevant cases. She made a sweeping generalization that did not allow for any exceptions. She set up a construct that ties the board’s hands so it may not act even when the facts are clear.

Ms. Dunning’s letter was not an unbiased analysis of the issues raised by my letter. It was an advocacy piece designed to make a potential problem go away. Ms. Dunning has disqualified herself from any further participation in this matter. (READ ASSESSMENT)

DECEMBER 9, 2015

CSPP ADDRESSES THE RETIREMENT BOARD

Good morning trustees. My name is David Brown. I am from Mill Valley and I am a member of CSPP. As I am sure you know, a retirement board of trustees may pay only benefits that are lawfully adopted. If a board of trustees has knowledge, or even suspects, that benefits were not lawfully adopted, it is required to petition a court of appeals for instructions.

California Government Code section 7507 lays out very specific requirements in both procedure and timing for disclosure to the public of the future costs of proposed pension enhancements.

The Marin County Civil Grand Jury in April 2015 found multiple violations of section 7507 by four Marin Agencies. Two of the four agencies, The County of Marin and The City of San Rafael, in their required responses to the Grand Jury effectively conceded they did not comply with the requirements of section 7507. The other two, Southern Marin Fire and Novato Fire Protection, either did not respond directly or said they cannot find evidence they complied with 7507. So they, too, effectively conceded the increases were not lawfully adopted.

To put this failure to fully comply with section 7507 in some perspective, CalPERS considers compliance with 7507 so important that it now requires agencies to certify in writing that they have complied with its requirements.

Please note that Calpers does not require certification of partial compliance, substantial compliance, or some other less-than-full measure of compliance. It requires certification of compliance. Period. Importantly, CalPERS will not fund a retirement benefit unless an agency has certified such compliance.

In light of the failure by the four agencies to fully comply with section 7507, what does your fiduciary duty now oblige you to do? Should you continue with business as usual? Should you perform your own independent investigation? Should you petition a court of appeal for guidance? The answers to all these questions are obvious. (READ MORE)

DECEMBER 7, 2015

CSPP IDENTIFIES CONFLICT OF INTEREST AMOUNG RETIREMENT BOARD MEMBERS

The “public service exemption” to conflict of interest rules as described by the court in the Lexin decision relies on members of the board having, in the words of the court, “a shared interest with the entire membership of the retirement system” and with the “membership as a whole.”

For the purposes of this discussion, MCERA’s membership is divided into two mutually exclusive groups, and these groups have different interests. (READ LETTER)

DECEMBER 16, 2015

CSPP PROVIDES LIST OF SPECIFIC QUESTIONS FOR RETIREMENT BOARD

Dear Board of Trustees,

A retirement board of trustees may pay only benefits that are lawfully adopted. California Government Code section 7507 lays out very specific requirements in both procedure and timing for disclosure to the public of the future costs of proposed pension enhancements.

... Thank you for listening attentively to CSPP's presentation on December 9, 2015 regarding the good faith issues raised by the Grand Jury as to compliance with California government code section 7507. These issues raise in our minds the necessity of the Board to agenda the item for discussion purposes leading to an investigation and clarification by a court. We raised a number of reasons for our conclusion and asked questions as well.(READ LETTER)

JANUARY 13, 2016

CSPP ADDRESSES THE RETIREMENT BOARD

Board of Trustees and Mr. Wickman,

Last time I was here I spoke at some length about possible failures of this board in its fiduciary duties to its plan members and possible failures in its duty to the public to minimize employer contributions.

I have since learned that your duty to the public is not fiduciary, my mistake. Rather, it is constitutional, under Article 16, Section 17, paragraph (b), the so-called contribution minimization provision. (READ MORE)