Hiring question sparks concerns on two front

The Salt Lake Tribune

What about effects of sequestration or the autonomy of elected county officials?

A hiring freeze has been in effect in Salt Lake County since the Great Recession hit bottom in 2009.

But it really hasn’t been a freeze that stopped all hiring. Instead, county departments and independent elected officials could hire people to fill vacancies as long as the County Council concurred. And the council has, signing off on most every request.

Now, with a steadily improving economy, Democratic Councilman Arlyn Bradshaw proposed replacing the hiring freeze with a “vacant position review.” It’s actually a change in name only, he said, since the council would still have final say on new hirings. But it would allow county human resource officials to get hiring-process paperwork going sooner, with the pledge that offers of employment will not be extended until the council grants approval.

Seems innocent enough.

But the proposal sparked two different concerns when discussed by the council on Tuesday.

The first involved sequestration. With the federal government facing sizable automatic cuts Friday if Congress does not resolve its budget impasse, Republican Councilman Michael Jensen does not want to change the restrictive approach currently in place.

“I want to see what happens,” he said. “In the next six weeks, we may have to implement a freeze because of the loss of pass-through dollars on the books. … Until we see how sequestration happens, let’s leave it in place.”

A separate concern was voiced by the county’s elected officials, who feel the council’s approach interferes with their autonomy.

County Assessor Lee Gardner said council members have their legitimate input in setting the annual budgets of the independently elected officials — auditor, assessor, clerk, district attorney, recorder, sheriff, surveyor and treasurer. But within that budgetary framework, he argued, those officials should be allowed to spend their money as they see fit, without micro-management by the council.

“Why do we have to go back and get approval for a position you’ve approved already?” Gardner asked.

District Attorney Sim Gill said now may be a good time to review the legality of the council maintaining such sway over elected officials, who contend tight council controls could inhibit their ability to do their jobs.

The hiring freeze, he said, “recognized there were difficult times managing difficult budgets. But now multiple interests and multiple legal responsibilities are converging. You’re all trying to do the right thing, but we should do the legal thing as well.”

Gill’s office will examine the issue in detail before next Tuesday’s meeting. By then, Jensen also should know if more county cutbacks may be needed to cope with the sequestration issue.

Utah prison relocation bill takes step forward

Salt Lake Tribune

The full Senate will now debate a proposal to set up an authority to seek bids to move the Utah State Prison after a committee gave the bill a green light Wednesday, though there was discomfort with its funding scenario and how much power the governor will have to shape its executive board.

Sen. Scott Jenkins, R-Plain City, presented the Senate Judiciary Committee with a second revision of SB72, which he said clarified the structure of the Prison Land Management Authority’s 11-member board — the “hottest point right now.”

The proposal allows Gov. Gary Herbert to appoint eight of the 11 members, who will be split into two subcommittees. The members will be drawn from the Department of Corrections, the Governor’s Office of Economic Development, two construction experts, two real estate experts, the Commission on Criminal and Juvenile Justice, and one at-large representative. The Senate president and speaker of the House will each appoint a member, as will Draper City.

Sen. Luz Robles, D-Salt Lake City, and Sen. Patricia Jones, D-Holladay, voted against the bill. Jones said she was particularly concerned about over-representation of real estate and construction interests. Several members gave the bill a favorable recommendation, but said they may change their votes on the floor.

Sen. Stephen H. Urquhart, R-St. George, said the bill gives “way too much decision-making authority [to] the governor’s office.”

Sen. Lyle Hillyard, R-Logan, said he believes the prison is due for upgrades and that it may be time to move it, but is concerned about funding the half billion project. Jenkins has said funding will come from up to $20 million in reduced labor and operational costs, land sales, tax increment sharing and borrowing.

Hillyard said in his 33 years on the Hill, he could not ever recall an instance when a project’s projected savings ever materialized as promised. “I don’t think that is going to happen,” he said.

Auditor raises flags about Utah retirement system

The Salt Lake Tribune

New Utah State Auditor John Dougall made a campaign promise to start “performance audits” of how well government programs perform. He released his first one Tuesday — and it attacked the Utah Retirement Systems for public employees.

It says URS is too optimistic in estimates about the rate of return on its investments — potentially putting pensions for its 190,000 members at risk and increasing the likelihood that taxpayers eventually might have to provide a bailout.

Dougall also said URS improperly claims it is exempt from state open records and open-meetings laws, so few policymakers and employees have understood the risks and assumptions being used by URS.

“More transparency is needed,” he said.

So in one of his first major acts, Dougall suggested amending the Government Records Access and Management Act (GRAMA) to force URS to be more open — which is notable because Dougall, as a legislator in 2011, sponsored the now infamous HB477 that critics say would have gutted GRAMA. Massive public protests led lawmakers to repeal it shortly after passage.

URS disagrees with the findings of the audit and complained that making it subject to GRAMA could force it to dump about a quarter of its current investments. It said that’s because those investments gave URS access to their inner workings, strategy and assumptions, and would not want such data disclosed publicly — so they would likely force the state to stop participating with them.

“We believe the assumed rate of return is optimistic,” Dougall told the Retirement and Independent Entities Appropriations Committee as he presented the audit. It says URS currently assumes it will receive a long-term 7.5 percent rate of return on its investments. State auditors, however, figure there is only a 43 percent probability returns will be that high.

The audit said URS estimates were based on an average of what six different groups had figured for the URS investment portfolio. However, one of those six groups had estimates that were far above the other five. When that outlier is excluded, auditors said a 6.8 percent return is more likely.

Dougall says that makes a big difference in how much the state, as an employer, needs to contribute to pension funds to keep them solvent long term.

The audit says, for example, that if a 6.75 percent rate is assumed instead of the current 7.5 percent, the state would need to kick in $168 million more a year to keep funds solvent. Even if just a 7.25 percent return rate is assumed, it would need to contribute $54 million more a year.

“Our recommendation is that the URS Board lower its assumed rate,” Dougall said, “because we think it’s riskier than the policymakers anticipate.”

URS disagrees. Its executive director, Robert Newman, testified that it relies on professional actuaries to make its projections, which are reviewed annually, and it feels comfortable with them.

Sen. John Valentine, R-Orem, a member of the committee, said that based on medium and long-term forecasts, a 7.5 percent rate of return is “on the conservative side,” and lawmakers weren’t in a hurry to spend the tens of millions of dollars it would take to adopt a more conservative figure.

“It’s hard for us to second-guess the actuaries, but it probably appears we’re still within the realm of reason with the 7.5 percent,” Valentine said.

The audit also noted that public retirement system boards in all other Western states have open board meetings, and their actuarial reports and assumptions are all open to the public. Neither is the case in Utah. Dougall said that should change.

“When you look at how many employees are relying on the pension, and that the taxpayers have to backstop that pension, I think it’s critical that policymakers understand the risks of the pension,” Dougall said. He added that URS is probably already subject to open-records and meetings laws, but the Legislature should clarify that because URS disagrees.

Sen. Curt Bramble, R-Provo, said he has asked URS for five years to provide suggestions on how to make itself more open and still protect some critical information from disclosure — but it never has. Bramble had considered an amendment making URS subject to Utah’s open-records law, but decided not to add it to a bill that passed the Senate Tuesday.

URS officials pledged to work with him to see if a compromise approach could be made to allow some public access — but not to information that could jeopardize its investing.

Sen. Todd Weiler, R-Woods Cross, chairman of the retirement appropriations committee, said he would oppose Bramble’s move, or seek a delay in it. He said if making URS subject to GRAMA indeed does lead it to drop a quarter of current investments, that could hurt its assumed rate of return even more.

The committee voted to study the condition of the retirement system — and any unresolved GRAMA and open-records issues — during interim meetings throughout the year.

House Speaker Becky Lockhart, R-Provo, said she doubts the Legislature needs to take immediate action based on audit results. “I’m not sure we need to make adjustments this session. We will begin to evaluate that, given this information.”

Committee delays vote on prison relocation bill again

Deseret News

SALT LAKE CITY — The makeup of a board that would oversee possible relocation of the Utah State Prison and redevelopment of the land where it now sits remains a sticking point for state lawmakers.

“As we’ve gotten into this, everybody feels like they need representation on the board,” said Sen. Scott Jenkins, R-Plain City, sponsor of SB72.

The bill now calls for an 11-member Land Management Authority Board with two subcommittees — one with seven members to oversee relocating and building a new prison, and the other with nine members to manage development of the current 690-acre prison property.

Draper, which has the 62-year-old prison in its boundaries, would have to two members on the board. But City Councilman Troy Walker wants a third, saying the city should have “significant” say in the decision making.

Members of the Senate Judiciary, Law Enforcement and Criminal Justice Committee raised concerns about possible conflicts of interest on the board and the public perception that the relocation project is on a fast track. The committee did not vote on the bill Monday.

The cost for moving and building a new prison is estimated at $550 million to $600 million. Jenkins said at least two-thirds of the cost would be covered in the savings from a modernized prison and the sale of the current property.

Building a new facility would save an estimated $20 million annually in operating costs, while the land would bring at least $140 million, he said.

Proponents of the project see the current prison site being developed as a technology center. The relocation committee estimated it would bring $25 billion in economic development to the state along with 30,000 to 40,000 jobs.

Opponents say it would allow land developers to get rich and leave taxpayers holding the bag when the economic returns don’t materialize.

Public Employees benefits – Not so Rich

Friday I had the opportunity to listen to the Retirement and Independent Entities Appropriations Subcommittee.  Over all it was informational and we heard about 211 services, The Leonardo, and reports from PEHP, URS and DHRM

Friday I had the opportunity to listen to the Retirement and Independent Entities Appropriations Subcommittee.  Over all it was informational, we heard about 211 services, The Leonardo, and reports from PEHP, URS and DHRM.

Like I said it was mainly information with no real surprises; however DHRM did report they prepared an independent study and it did show that state workers TOTAL compensation was lower than their counterparts in the private sector.  That dispels the myths running through the media and anti-union organizations that Public employees RICH benefits are bankrupting our state.

Being that almost every jurisdiction UAGE represents, it’s fair to say that most public employees in Utah are compensated less than their counterparts in the private sector.

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