Smith, Horgan and Hearn saddled taxpayers with unsustainable pension payouts

While the majority of private companies and many public agencies have opted for a Defined Contribution Benefit Plan (401K), in 2009 our Fayette County government under the former Chairman, Jack Smith, chose to dump the Defined Contribution Plan and replace it with a Defined Benefit Plan, which is considered by many as an expensive “Cadillac” plan.

The plan was proposed and approved by the former Chairman, Jack Smith, and current Commissioners Lee Hearn and Robert Horgan. Herb Frady voted against the plan and former Commissioner Eric Maxwell abstained. Mr. Frady was the only one that got it right.

At the time the DB Plan was being considered, many citizens warned them not to switch plans but they went ahead with it anyway. At a meeting held when the plan was being approved, Smith claimed the plan would save the county millions of dollars in the future. His arrogance, rudeness, and refusal to listen to anyone daring to speak in opposition to anything he came up with were typical.

Our warnings have already proven right and the plan is only three years old. Messrs. Smith, Hearn, and Horgan have been quoted several times in The Citizen, and at campaign debates in 2010 and again in 2012, that the plan was working as intended and is saving the taxpayers millions of dollars.

All three of them are currently campaigning for re-election and touting their leadership roles in switching to a DB plan. Well, my analysis proves they were wrong in 2009 and they are still wrong in 2012.

The California cities of Stockton, San Bernardino and Mammoth Lake voted to file bankruptcy in the last two weeks. Each of them cited unsustainable pension benefits and medical insurance coverage to retirees as the reason for filing bankruptcy. Current wisdom says this is only the beginning.

A recent Pew Report and numerous newspaper articles have commented about the trillions (yes trillions) of dollars of unfunded and unrecognized liabilities that public agencies have to deal with amid plummeting revenues and soaring pension and healthcare costs.

One article said, “You can expect many more bankruptcies, and we the lowly taxpayers, will be required to pick up the tab for this nationwide problem.”

In a CNN article on 7/12/12 entitled “California bankruptcies are only the beginning and that’s not to say that the residents and workers in the bankrupt towns won’t feel the pain. They will likely suffer from reduced services and their employees will likely find they have to pay more into their pension and health funds, if they are lucky enough to keep their jobs.”

DB Plans always look attractive at the beginning but they become a train wreck as employees age and retire. Again, Smith, Hearn and Horgan were warned about this but I don’t think they cared what other people had to say anyway.

The DB plan has already proven to be more expensive and the costs will continue to grow. The commissioners’ decision to switch plans was wrong on so many fundamental levels.

Every knowledgeable financial professional I know, with the exception of the former Chairman Jack Smith, CPA, is in full agreement with me that a DB Plan can be toxic. Just look at what happened in just two short weeks in California.

Cal Beverly, editor of The Citizen Newspapers, in an article published the day after the 2010 election wrote an outstanding article that was entitled, “Lessons to be learned from the July 20 vote.” It stated, among other things, “to both the commissioners-elect, remember whose servant you are. I’ll be explicit: You are not put there to serve the government employees. You are put there to serve the taxpayers of this county. Sometimes — unfortunately and I hope rarely — you will find the interests of the employees will be at odds with the interests of the taxpayers. Don’t forget who is paying the salaries of all of you. You work for us; we don’t work for you.” Read the full article www.thecitizen.com/blogs/cal-beverly/07-21-2010/lessons-be-learned-july-...

Smith, Horgan and Hearn were apparently trying to serve the wrong masters and let their blind allegiance to other interests cloud their judgment.

Please do not re-elect Smith, Hearn or Horgan. They have done enough damage already! My slogan: ABBTT (anybody but these three).

Click on the following link to read an article I wrote for The Citizen Newspaper on 6/10/12 entitled “How did we let this spending happen?” (www.thecitizen.com/articles/06-19-2012/how-did-we-let-spending-happen).

Hall County, Georgia had a defined benefit plan, which was frozen to new participants effective July 1998. They discovered that the defined benefit plan was not sustainable and they switched to a defined contribution plan for all new employees. As of January 2011, the defined benefit plan’s unfunded liability (the excess of liabilities over assets) was a whopping $27 million dollars. The commissioners of Hall County did a thorough investigation and came up with the right answer. Goggle Hall County, Ga., CAFR 2011 and go to page 38, Note 10 of the audited financial statements.

Did Smith, Hearn, and Horgan do a proper due diligence investigation before putting the taxpayers of Fayette County on the hook for this ill-advised DB plan? The argument they use is that employees were being lost to other employers because the county’s DC plan was not competitive. Has the employee turnover rate improved enough to justify potentially bankrupting the county in the future?

It would be interesting to know who came up with the idea of prepaying over $1.249 million to the pension plan administrator at the beginning of 2012 and over $800 thousand at the beginning of 2011.

I will have more to say about the early retirement plan in an article next week.

The spreadsheet analysis and supporting data I prepared are too big to fit into a newspaper article. Go to http://fayettecountyissuesteaparty.org/.

Jim Richter, CPA (Ret.)

Peachtree City, Ga.

americanpatriots
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Dean Howard and Mike Hofrichter could be in deep trouble

I checked online with the Georgia Government Transparency and Campaign Finance Commission and there is no record of Dean Howard and Mike Hofrichter having filed
an RO form (a registration form for a committee other than a candidate).

If anyone else besides those two individuals contributed money or anything of value for the full page ad attacking the Take Back Fayette County Tea Party, Harold Bost, Bob Ross or any of the candidates, Barlow, Ognio or Oddo, they are in deep trouble!

Anyone can go online and check to see if what I said is true.

My “Concerned Citizens of Fayette County” is a properly registered PAC and the registration number is NC2012000064.

Jim Richter

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americanpatriots could be a drama queen!!!

Posting the same exact post in 8 different places is simply abusive and makes the forum cluttered with crap. Everyone can get the point without you spamming and spewing in every discussion topic the same exact copy-and-paste job which I guess you think is so revolutionary that it has to be repeated everywhere.

I guess those bozo's ad really had a tremendous impact on your life. Grow up.

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Dean Howard and Mike Hofrichter could be in deep trouble

I checked online with the Georgia Government Transparency and Campaign Finance Commission and there is no record of Dean Howard and Mike Hofrichter having filed
an RO form (a registration form for a committee other than a candidate).

If anyone else besides those two individuals contributed money or anything of value for the full page ad attacking the Take Back Fayette County Tea Party, Harold Bost, Bob Ross or any of the candidates, Barlow, Ognio or Oddo, they are in deep trouble!

Anyone can go online and check to see if what I said is true.

My “Concerned Citizens of Fayette County” is a properly registered PAC and the registration number is NC2012000064.

Jim Richter

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Mr. Richter, Do You Have The Answer?

Who did sell Fayette County the Defined Benefit Plan?

It is quite obvious that Mr. Richter has spent an enormous amount of time researching his facts. He said, "I will have more to say about the early retirement plan in an article next week."

I can't wait to hear the "Rest" of this story!

I see that Mr. Richter is a Retired CPA. I greatly appreciate the fact that he has used his professional background to benefit the people of Fayette County.

For a couple of years, now, two of our current commissioners have been urging Chairman Frady and Commissioners Horgan and Hearn to tap into the counties wealth of retired professionals to fill seats on different Boards. Mr. Richter's dedication to provide the people of Fayette County with the above information is a clear example of what Commissioner Steve Brown has been telling the other commission members about appointing a wide range of Fayette citizens to different Board positions that need to be filled.

It has been the practice of Frady, Horgan, and Hearn to appoint relatives and friends to these positions.

Most people in Fayette County aren't even aware that their talents could be put to very good use within our county government.

Mr. Frady, Mr. Horgan, and Mr. Hearn, PLEASE advertise those Board positions instead of appointing your friends and relatives. There is a wealth of talent in Fayette County. Give other folks an opportunity to use their talents. We would all be better off for it.

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Who Sold Fayette County this "bill of goods?"

When making public comments, the time limit is five minutes. When Mr. Richter was out of town, his comment on defined benefits was read at the last commissioners meeting. Before the comment was read, Mr. Frady was asked to grant two or three extra minutes so the 1 1/2 page comment could be read in its entirety. Mr. Frady, while empowered to do so, refused to grant the extra time, and stopped the reading of the comment on the second page.

This defined benefits plan your commissioners approved is a gravely serious mistake, and if it is not replaced, will cause Fayette County to go bankrupt. The facts Mr. Richter has presented here are true and accurate. Before voting, every citizen needs to read his letter in its entirety.

I encourage the "usual dissenters" to read it as well. Maybe their comments will encourage others to at least take a good look at what Mr. Richter has to say. I say that he has provided a very valuable service to the voters by drawing our attention to the precarious position placed upon us by our previously elected officials who are now ready to lead us down the road to ruin.

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typical tax and spend

Fayette County seems to be on a path to disaster. Stop the wasteful spending you irresponsible politicians!

ginga1414
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Who Was Jack Smith Working For?

Mr. Richter's account of Jack Smith's Defined Benefit Plan is absolutely shocking, to say the least.

Who was Jack Smith working for? It certainly wasn't the people of Fayette County.

Who was Jack Smith working for? After approving substantial tax breaks for China's Sany Corp, he accepted an expensive lavish week-long excursion in China from the company. His trip included top-rated lodging, meals, entertainment and tours of the Chinese countryside such as Zhangjiajie National Forest Park, a tour of the Olympic Stadiums, the Great Wall, the Forbidden City and the Shanghai Pearl Tower.

Was that trip a clear violation of the state Code of Ethics?

Who was Jack Smith working for when he insisted on building the W. Bypass completely with Fayette taxpayer money? According to Atlanta Regional Commission records, the West Fayetteville Bypass "Did not score high enough/was too expensive" for state funds. Fayette taxpayers paid for 100% of the road, yet it runs through six different development properties; one of them is owned by Jack Smith supporter Ed Wyatt. The Bypass will provide Mr. Wyatt's 333 acres with close to 3/4 mile of TAXPAYER-funded road frontage.

Who was Jack Smith working for during his tenure on the BOC when he accepted a seat and currently serves, on the Board of Directors of the Bank of Georgia. The Bank of Georgia was created by real estate developers for real estate developers. The FDIC issued a Cease and Desist Order 09-133b, charging the bank with unsafe practices and violations of law/regulations. As of July 9, 2012, the FDIC shows no termination date for the order.

And, now we are dealing with Jack Smith's Defined Benefit Plan!!!

Once again, we have to ask ourselves, who was/is Jack Smith working for? It certainly isn't FAYETTE COUNTY TAXPAYERS!!!

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Defined benefits for Fayette County should give you shivers

Here we have good journalism with documented facts that show how Fayette County is in a financial disaster mode. It also shows how Commissioners Hearn and Horgan always side with the Commission Chairman on major issues, even when he is dead wrong! While I often disagree with Mr. Frady, I'll have to give him credit here for seeing through this ruinous plan that is so much less than the taxpayers deserve. It was unfortunate that he was not the Commission Chairman at the time it was approved. Had that been the case, the measure would have failed by 3 votes to 1.

I hope enough folks will read this expose' to see first hand how vital it is that those commissioners running for reelection be ousted. Neither can provide any evidence that they stood up successfully to Messrs. Smith or Frady on major issues such as this.

Go to the documentation provided in the article. You'll become a believer!

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Arrogant Jack Smith

After the GOP commissioners candidate forum this week, Jack Smith was overhead telling two people that after he is elected he will make sure Steve Brown never serves as chairman of the board of commissioners.

I have met my share of presumptive arrogrant jerks in my lifetime, but Jack Smith is in a class all by himself.

Jim Richter

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