(March 6, 2006) -- In an escalating slow-burn over the taxpayer consequences of a 2002 Council-approved "pension spike" for non-public safety city employees , Mayoral candidate/retired Councilman Doud Drummond has endorsed Laura Wilson Doud to replace incumbent City Auditor Gary Burroughs.
Drummond, who retired from the Council in 1998, wasn't part of the fateful 2002 Council vote (Mayoral candidate Frank Colonna was)...and Drummond has pounded away at the issue at every opportunity...as he did at a March 5 "Town Hall" meeting sponsored by Save LB City Skyline.
At the same meeting, Drummond buttonholed LBReport.com to announce he has endorsed Ms. Wilson Doud, a CPA who worked in the City Auditor's office under incumbent Burroughs and now works for the area's Water Replenishment District. Again, Drummond focused on the pension issue:
"LB was told we had a holiday from making pension payments to PERS [Public Employee Retirement System], amounting to about $50 million over five years. Burroughs went along with using that savings for ongoing spending in the General Fund...and on top of that, after September 11  when stock portfolio investments dropped, he didn't object to the 2002 pension spike. The net result has been terrible for LB taxpayers and the City. Laura Doud is hard working and knowledgeable on this issue...and I'm confident she'll do a better job looking out for taxpayers."
Ms. Wilson Doud, who attended the "Town Hall" (incumbent Burroughs did not), told a crowd of about 80 people (and an internet webcast audience beyond), "The City Auditor...failed to warn the Council that the pension fund was only over-funded as long as the stock market stayed the same [which it didn't after 9/11]...and on top of all of it, the City Council voted [in 2002] to increase pensions...[T]he City Auditor had a duty to speak up. He had a duty to represent us...He breached this duty and it cost us millions of dollars."
In a free-wheeling interview with LBReport.com taped several weeks ago, City Auditor Burroughs said the pension issue had been misstated by some in the media and by some candidates, creating what he described as erroneous impressions about the situation. LBReport.com will be featuring extended portions of incumbent Auditor Burroughs' comments on this and other issues, coming shortly.
At public appearances, Drummond has regularly charged -- without denial from opponents or others -- that under the Council's 2002 action (advised by then-city management), a 40-year non-public safety LB City Hall employee stands to leave city employment and collect over 130% of their income (with the inclusion of Social Security).
We've personally witnessed audiences gasp when Drummond cites the figure...which he proceeds to reinforce by citing closed libraries and infrastructure needs, charging LB streets are filled with "pension potholes."
At a January League of Women Voters forum, Mayoral candidate Bob Foster echoed criticism of the 2002 pension vote, adding that in the future, the city should remain "vigilant." For his part, Colonna has stressed that LB's pension system is fully funded and in good shape and has said the Council action will never be repeated.
To our knowledge, candidate Foster was publicly silent when the Council recently voted (without dissent) to approve a new contract with the same non-public safety city employee union...a contract that includes a salary increase which amplifies the costs of the "pension spike" by increasing the sum on which the pensions are calculated. At the same time, the new contract (approved without Council dissent) eases the taxpayer burden somewhat by implementing a lesser (but still generous) "second tier" pension rate for new hires and requiring all non-public safety city employees to pay an additional 1% toward their pensions.
The 2002 pension votes occurred just weeks after LB Mayor Beverly O'Neill was safely reelected with a write-in third term in one of the lowest turnout elections in LB history. A few weeks later, the pension votes were scheduled for two successive Council meetings spanning the last Council meeting for outgoing members Grabinski and Shultz and the first meeting for incoming members Reyes Uranga and Lerch)...meetings at which public attention was focused mainly on ceremonies, not substance. (LBReport.com prominently reported the two 9-0 pension votes at the time.) Under the O'Neill administration, the Council has allowed the Mayor's office to exert considerable influence over the scheduling of Council agenda items.
Less than a month after the Council votes approving the pension increases, O'Neill appeared alongside then-City Manager Henry Taboada to announce that City Hall -- which her endorsers had only recently told voters was "on the right track" -- was in fact facing a fiscal crisis.