How did we let this spending happen?

I was surprised to learn that Fayette County would have contributed an average of 14.44 percent of salaries to its employees’ Defined Benefit Pension Plan for 44 people on the Early Retirement Incentive Plan list.

And, I found it interesting to learn that corporate employers contribute about half of that amount. Furthermore, because of the economic climate, many companies have eliminated contributions altogether, leaving employees responsible for their retirement planning. Why did we let this happen?

We hear almost daily how the government pays double what private companies pay. Why did we let this happen? When will the taxpayers stand up and say, “Enough is enough”?

Thirty-two employees, out of the list of 44, accepted the County’s Early Retirement Incentive Plan’s generous offer that will ultimately cost taxpayers millions of dollars. And, the money to cover the upfront cost of approximately $2.8 million ($86,264 per participant according to an article in The Citizen on 4/15/12) will have to come out of the county’s dwindling “rainy day” general fund balance. Why did we let this happen?

What effect will the $2.8 million required to cover the 32 people have on future property taxes or future county employee raises? Did anybody bother to consider this? How happy do you think taxpayers or the remaining county employees will be when more taxes will be necessary to pay for this fiasco?

In an effort to justify the early retirement plan, County Administrator Jack Krakeel said in the 4/15/12 Citizen article that it would save the county $1.6 million per year. In my opinion, this statement is totally misleading and is, at best, nothing but a lot of smoke and mirrors.

My analysis, as a former CPA with Price Waterhouse, of the data submitted by Mr. Krakeel to the Board of Commissioners shows quite a different picture. The underlying assumption for the $1.6 million annual savings is that several senior people can be replaced with less expensive ones or that the positions can be eliminated. I consider Krakeel’s assumptions to be utterly ridiculous.

The assumptions regarding the number of jobs that may be eliminated and the estimated savings are highly suspect. My question to Mr. Krakeel is “if those jobs could be eliminated, why didn’t you eliminate them before?” After all, that was your job and it is something that a cost-conscious administrator would do. Why did you let this happen?

The plan’s actuaries originally estimated the liability for the 44 employees to be $4.177 million, but, on Feb. 15, 2012, GEBCO Corp (Georgia County Government Corp, a wholly owned subsidiary of Association of County Commissioners of Georgia) revised their estimated liability upwards to $5.959 million, a whopping increase of $1.782 million. The actuaries won’t determine the final number until they have the June 30, 2012 payroll information.

It is interesting to note that Jack Krakeel, County Administrator and one of the chief architects of both the Early Retirement Plan approved in 2012 and the Defined Benefit Plan approved in 2009, stands to receive $1.321 million over 20 years.

If he lives long enough, he or his spouse could be on the plan for up to 30 years, thereby pocketing another $660 thousand – a total of almost $2 million. Wouldn’t you have liked to be a winner in this sweepstake largesse?

I want to remind you that our former Chairman of the Board of Commissioners, Jack Smith, played a major role in getting the Defined Benefit Plan approved in 2009. Unlike most private companies whose employees have to make do with a Defined Contribution Plan or some other less risky plan to taxpayers, our Fayette County employees were given a “Cadillac” plan.

Mr. Smith is a candidate for election to Post 2 of the Board of Commissioners. The voters removed Smith from office in 2010 and I can’t imagine them giving him another chance.

In case you have forgotten, Delta Airlines’ Defined Benefit Plan put them in bankruptcy. It has been widely reported that city and county government retirement plans across the nation have trillions (yes, trillions) of unfunded future liabilities.

Minutes of the Board of Commissions show that Jack Smith, Lee Hearn and Robert Horgan voted for the plan, Herb Frady voted against it, and Eric Maxwell abstained in 2009. Why did we let this happen?

I have seen how governments work, and I would bet my last dollar that, if any jobs were actually eliminated, they would be back along with a new level of unnecessary support positions before we know it. The architects of the plan will be long gone in about a month so who will get blamed for this inevitable event?

Unfortunately, the early retirement plan has been approved so it is what it is. And, we will not know its full financial or operational impact until way in the future. Why did we let this happen?

As usual, Commissioner Brown raised several legitimate concerns about the early retirement plan but it didn’t matter what he thought anyway because commissioners Frady, Hearn and Horgan had the votes to shut him up.

Think what you will about Steve Brown, but if you follow the issues, you will discover he always researches them thoroughly and his comments are usually right. How did Smith, Frady, Hearn and Horgan ever get elected anyway? Oh yeah, I forgot, we let it happen.

With so many senior people leaving July 1, 2012, it could be very tough on the county from a financial and operational standpoint. The senior employees will have to be replaced. Thus, we will be paying the salaries and benefits of the replacements and the “upfront” and future costs of the early retirees. We will end up paying for two people but only getting the services of one. Why did we let this happen?

By now, you are probably wondering if we, the lowly uninformed taxpayers, have been “gamed.” The answer to that question is for you to decide.

I have attended so many meetings in the last three years and witnessed first-hand how the former Chairman, Jack Smith, and the present Chairman, Herb Frady, along with two of their fellow pals, Hearn and Horgan, always voted with them on virtually every issue.

Sadly, many of us have reached the point where we just read the agenda once it has been posted on the website and skip the meeting because we know the vote will most likely be 3-2.

OK, people, the time has come to get engaged, go to meetings, get informed, demand some answers, and vote in the July 31, 2012 election. The deadline for voter registration is July 2, 2012 and advanced early voting begins July 9, 2012

We have a very important decision to make in the selection of three new county commissioners next month. After all, the people we elect will be spending your money, so vote wisely.

Please consider voting for the following individuals (they are businessmen – not politicians): Charles Oddo of Fayetteville, Randy Ognio of Fayette County and David Barlow of Tyrone. I have known each of these gentlemen for at least three years and I can assure you they will always represent your interests.

Jim Richter

Peachtree City, Ga.

ginga1414
ginga1414's picture
Online
Joined: 09/01/2008
How Did This Happen?

Mr. Richter, thank you so much for caring enough to analyze this ridiculous situation. Your superior credentials as a CPA with Price Waterhouse make your letter even more meaningful.

This whole fiasco happened because it was orchestrated by master manipulators.

Even though Jack Smith was voted out of office in 2010, I think he has continued to pull the strings. During his 2010 campaign, Mr. Smith had a few catch phrases that he threw out to the voters every chance he got. His absolute favorite phrase was "More Bang For The Buck!" He is still using that phrase. He used it several times just this past Tuesday ( June 19th) during the Commission Candidates' Debate. If I am remembering correctly, he used the "More Bang for The Buck" phrase in reference to justifying the Defined Benefits Plan.

Jack Smith especially loved using that phrase while trying to justify the West Fayetteville Bypass. He knew from the beginning that the WFB couldn't be justified through traffic studies. There were none. "More Bang For The Buck" in connection with the WFB was referring to the secretive West Fayetteville Neighborhoods development that was in the works through the Fayette County Development Authority, the commissioners, the Fayetteville development folks, Mayor Ken Steele, and the family developers.

Another one of his favorite phrases was in reference to his working relationships with County Administrator Jack Krakeel and County Attorney Scott Bennett. He repeatedly said that Jack Krakeel and Scott Bennett were there at his "behest." Krakeel was/is being paid way over $100,000 a year by the taxpayers of Fayette County, yet he was/is there at Jack Smith's "BEHEST?!!"

During the June 19th Commission Candidates' Debate, Jack Smith continually defended the Defined Benefits Plan, the Transportation Investment Act (Regional T-SPLOST), and the WFB. Through the entire debate he was stuck to the upcoming Regional T-SPLOST (TIA) like a tick on a hound dog. Then when asked by an audience member how he would vote with regard to the Regional T-SPLOST on July 31, he said, "I haven't made up my mind." Coincidentally, his fellow commissioner Robert Horgan responded to the same question with the same answer, "I haven't made up my mind." I guess his theory is, "Keep 'em guessing." Just more master manipulation.

Smith, Frady, Horgan, and Hearn actually think the citizens of Fayette County are stupid. They think we are going to go away. One of the committed (to each other) four was overheard, during a particularly contentious commission meeting, saying to another commissioner, "Don't worry, all these people will go away soon." He was referring to the taxpayer packed meeting room.

Having attended 99.9% of all commission meetings since 2008, I can say that Jack Krakeel is notorious for presenting Agenda items with a time limit tagged to them. If Krakeel was there at Jack Smith's "behest," I guess he is also there at Frady's "behest." However from what I've observed, it is more than likely that Frady, Horgan, and Hearn are there at the "behest" of Smith and Krakeel.