Is Legality of 401(a) Plan a "Grizzly Bear Trap?"

 

Yesterday's board discussion about the county's 401(a) retirement plan was inartful.  And I said so multiple times.  It was a discussion that did not need to happen.  It should have been worked out between the lawyers in the background and the facts brought to us for a decision.  But nope, we had to make sausage even though we didn't need to have this discussion in public.

But it happened, nonetheless.  (Starting at 1:08:25 of this video)

Full disclosure, I do not take the 401(a) plan, I never knew it existed until two months ago, and obviously the rate of return for elected officials (over 51% for next year) is obscenely high.  These are the facts upon which we can ALL agree.  Do I believe these rates are too high?  Yes, of course I do, and I said so at the meeting.

Furthermore, the additional facts of the matter are very clear:  The county has had this plan in place for nearly 25 years (since 1997) and many current and former employees and current elected members of the board have made irrevocable elections out of the standard FRS plan to join this local plan.  This plan and the administration and rates for reimbursement to the accounts of employees and elected officials are memorialized in a contract the board approved in 2016 before I was on this board.  At the meeting yesterday, I again asked our attorney if this plan was legal, to which she replied "Yes."

Now comes the strange, artless, choppy, sloppy, and unusual stuff.  The Clerk's office put an "information item" on their portion of the agenda, stating they would unilaterally be reinterpreting portions of the board's 2016 executed contract with ICMA because they felt the "rate of payment into these accounts was too high."  They did not say, in their agenda backup, however, that they felt it was "illegal" to make these contributions.  So I asked the clerk and the clerk's attorney both point blank:  Is this illegal?  After pressing them---after wading through a lot of gibberish and gobldegook--they both finally stated at the meeting in answer to my query that yesthey believe it is "illegal."  But our attorney, again, believes otherwise.

So here's where it gets interesting and the questions come in rapid fire fashion:  

If it is indeed illegal--why has the clerk's office signed off and sent in the checks to pay these astonishingly high rates of return for the last 8 years?  If it is illegal today, was it illegal then?  Does paying from the treasury an illegal charge carry any penalty under state statutes?  Is ignorance of the law a defense?  Robert Bender made a very subdued, modest statement that resonated with me when he disclosed to us all via a statement to the clerk that he indeed sought a clerk's opinion about the plan shortly after he took office, specifically about the high rate of return and if this was legal, to which he apparently received reassurance from the clerks office that it was legal.  I mean, this must have been their opinion--otherwise the payments to Bender's account should have stopped right then and there, in early 2019.  

But no, the clerk's office continued to approve these huge payments ever since.   Apparently these queries from Bender to the clerk's office were made in writing.  (Someone should look at these).

So here's the bear trap.  If it is/was legal to pay these plans--then the clerk has NO legal authority to take action to prevent or pause payment--this is up to the BOCC to fix or adjust, our issue.  A clerk unilaterally not paying or attempting to void or reinterpret an executed contract is imporper at least-and could be that office acting ultra vires at worst-- according to our attorney.  (Yes, I asked that question yesterday, too)

On the other hand--if the clerk is right and this is in fact illegal--then why the heck have these payments been made for all these years?  How the heck could the clerk's office say yes--it is legal to Robert Bender in 2018 and continue to pay if it was illegal?  And why in the heck would it take them 3 years to finally figure out it is illegal and not simply problematic?  And if they figured out this past week, that it is/was illegal---why not just indicate that within the backup?  Why make me pry it out of the clerk's attorney like a pearl diver opening a clam?  Why not say "YES WE THINK IT'S ILLEGAL!"  Why the doublespeak about it being "problematic."  What the hell does that even mean, anyway?

Too many questions--but meanwhile we, the BOCC, have requested formal legal opinions on all these questions from an outside counsel.  The answers will be interesting to read.  Either way though, this spectacle of a discussion yesterday turned into a grizzly bear trap about to be sprung........ 

And whatever happens there with that---the BOCC will fix this issue--because It's our issue to fix.