Council takes heat over pension issue Officials assail members for resisting reform efforts

'We're not the godfather'

Bid to end guaranteed cost-of-living raises causes furor

July 11, 1996|By Scott Wilson | Scott Wilson,SUN STAFF

The Gary administration is in the toughest fight of its two-year tenure over a bill to reform the $750 million retirement system for county employees.

A usually compliant County Council, which has firmly endorsed previous administration bills to cut personnel costs, is resisting legislation that would save Anne Arundel $6 million a year by removing guaranteed cost-of-living-adjustment raises for retired county workers.

During a public hearing last night, top county officials turned up the volume on the debate, blasting back at council members and firing broadsides at county employees. The harshest comments came from Chief Administrative Officer Robert J. Dvorak, the highest-ranking unelected official in County Executive John G. Gary's administration.

"I hear these people in the audience laughing," said Dvorak, following an outburst of derisive laughter by spectators after administration officials indicated they should begin saving for retirement. "At some point where does personal responsibility come into this? We're not the godfather who takes care of everybody."

Dvorak continued what audience members described as a tirade over the objection of council members, blaming employee opposition to the pension bill on the policies of former Democratic Presidents Franklin D. Roosevelt and Lyndon B. Johnson.

"Johnson said you don't have to work, and we'll send you a check," Dvorak said, using an expletive.

In another exchange, he said: "We don't seem to think our employees have any sense."

"You said that, not me," said Councilman James E. DeGrange, a Glen Burnie Democrat who had been questioning Dvorak.

"You can't baby-sit everybody," Dvorak said. "That's not our role. And the taxpayers have said that's not our role."

Labor leaders and even some council members expected the administration to offer an amendment to the 41-page pension bill last night that would guarantee cost-of-living raises for retired workers, a major concession. As written, the pension bill would tie future so-called COLA raises to the retirement fund's investment earnings.

What the council got was a showdown of six top administration officials.

"I've never heard anybody cuss at the council before," said Jim Bestpitch, president of Local 582 of the American Federation of State, County and Municipal Employees. "Maybe it's a new tactic."

Said a 20-year county employee, who feared retribution and wished to remain anonymous: "You hear a prayer, the Pledge of Allegiance and then you hear that. It's really sad."

Introduced last month, the pension bill is Gary's most recent effort to reduce personnel costs, which account for 75 percent of annual county spending. The measure, which will likely be debated for the rest of the summer, would merge the county's five pension plans under one board of trustees and create a second, less generous retirement program for new employees.

That new plan would raise the retirement age from 50 to 60 years old and cut the benefit in half. But county employees in the plan would not have to contribute to it; workers now chip in 4 percent of their salaries.

The county's 3,500 active employees, as well as the 1,100 retired workers, would not see a reduction in retirement benefits. But if investment earnings could not pay for a cost-of-living raise, they would get no increase. Last year, the investment fund returned 27 percent. The first 7 percent is plowed back into the fund to ensure financial soundness.

County officials have not calculated the cost of a 1 percent COLA increase, but without a guarantee, none would be paid under the pension bill if investment earnings did not cover the amount.

"There may be years when a COLA can't be paid," Dvorak said.

During last spring's labor negotiations, county officials contend, five of seven employee bargaining units agreed to lift the guaranteed cost-of-living raise. Labor leaders say that is not true. Unions agreed to tie future raises to investment earnings, they say, but did not agree to relinquish a guaranteed COLA.

The council is challenging the Republican administration to prove the $750 million pension system will go bust by 2004 without significant reform. While some actuarial figures show certain pension plans over-funded by 32 percent, other calculations reveal shortfalls, according to a county actuary.

But some council members, including DeGrange, are accusing the administration of using alarming claims to hide its real motivation: cutting county costs at the expense of public employees.

Pub Date: 7/11/96

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