In reforming pension plan, Gary changes County executive trades unusual quiet for threats on issue

'A fly in the ointment'?

If retirement bill dies, he vows to move 3,500 workers into Md. plan

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

County Executive John G. Gary's plan to overhaul Anne Arundel's $750 million retirement system, which now seems doomed to expire by the Sept. 5 deadline, has provoked shouts, lectures and utter confusion.

In fact, the debate has lacked just one thing: John G. Gary.

The GOP county executive has virtually hidden in his fourth-floor Arundel Center office suite for months as the County Council, on the first floor, has held more than 20 hours of hearings trying to decipher the 41-page bill. The man nicknamed King John for his public bravado has turned to absence for political mystique.

"This is not a political issue that you can posture about," Gary said. "This is as serious a bill as they will ever vote on."

But his silence is about to change.

With two council meetings remaining before the bill would expire, Gary warned during an interview late last week that without pension reform, he would push 3,500 county employees into the less-generous Maryland State Retirement System, essentially dissolving Anne Arundel's pension plan. The council would have to approve such a change.

Next, Gary said, he would draw up an early retirement incentive to thin the work force by as many as 100 jobs.

He then would ask the Board of Education, a bitter enemy over money matters, to undertake personnel reform, including early retirement options for veteran teachers. "I don't want to be a fly in the ointment," Gary said. "But if they don't make major revisions in the way they do business, they are heading for bankruptcy."

Those measures would end a season of cost-cutting personnel reform that has created pay for performance raises, established a 40-hour workweek for all full-time employees, featured rancorous union impasse hearings and redefined more than 1,500 jobs. Next year, Gary said, he will seek a multiyear union contract with Anne Arundel's seven bargaining units that would include pay raises.

But the centerpiece of his effort is pension reform, a bill that has 41 amendments. And it is in trouble, at least in the short term.

Council Chairwoman Diane R. Evans, an Arnold Republican, said during an interview that she would not call for a vote on the pension bill before the Sept. 5 deadline. "I am commited to that," she said. "I want the administration to resubmit a clean bill."

That would give the legislation a fresh 95 days for council action. As it now stands, the measure would:

Eliminate guaranteed cost-of-living adjustments for the county's 1,100 retired workers. The county would continue paying COLAs with the pension fund's investment earnings, which came to more than $40 million last year. But under the bill, the general fund no longer would pay raises if earnings failed to cover them. Since 1984, Anne Arundel's pension earnings have covered COLAs. Baltimore pays COLAs the same way.

The bill also would boost a 3 percent limit on COLAs for retirees to 4 percent. And if Baltimore's inflation rate exceeded 4 percent, the bill would allow the surplus to carry over into years when the index did not reach the ceiling.

Create a second retirement plan that would cut the annual pension benefit in half for new employees. These employees, however, would not have to contribute to their plan. By contrast, most county workers now give 4 percent of their paychecks.

Establish a board of trustees to supervise pension operations and investment.

"The union scare tactics have hid the fact that this [pension bill] is a huge increase in benefits for existing county employees," said Councilman William C. Mulford II, an Annapolis Republican who supports pension reform.

Gary concedes that union leaders have "outmaneuvered" him by casting the pension bill as harmful to current employees. "They created doubt and confusion," he said. "It's a good strategy. I used to do it in the General Assembly."

Compounding the problem was that the council has been considering personnel reform, a tedious if important subject, for months.

And pitching for the administration have been Personnel Director E. Hilton Wade and County Attorney Phillip F. Scheibe. Labor leaders have labeled them "Itchy" and "Scratchy," viewing them as a chronic annoyance, but they may more closely resemble Rosencrantz and Guildenstern, Hamlet's loyal courtiers on thankless missions of diplomacy.

This time, though, the message wasn't working.

"A lot of the confusion has come from the administration itself," Mulford said. "They just weren't able to explain it."

So Gary called on different proxies, including right-hand man Robert J. Dvorak and Finance Officer John R. Hammond, to promote the bill that would save the county $6 million annually in future years. Personnel costs account for 75 percent of the county's budget; Gary vowed in his 1994 campaign to shrink them.

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