Orange County supervisors Tuesday unanimously approved the appointment of retired Newport Beach real estate developer David Ball to the Orange County Employees Retirement System.
The move was heavily criticized by labor officials and city elected officials such as Stanton Mayor Dave Shawver and Westminster Councilwoman Diana Carey, who both argued that cities who contract with the county or the Orange County Fire Authority for public safety services should have a seat on the retirement board.
“Not one of us has a voice on this board,” Shawver said. “This is not practical or fair.”
Despite serious differences about amortization schedules and investment assumptions between the all-Republican Board of Supervisors and local labor officials who supported Shawver, supervisors said state law prohibited them from appointing a city official.
“We have been advised through our counsel that there are restrictions, that individuals like Mr. Shawver are not eligible for this appointment,” said board Chairman Shawn Nelson.
Referring to a confidential county counsel opinion, Supervisor Todd Spitzer said the statute governing the retirement board mandated that supervisors’ appointees not have any connection to the county government.
Because some cities contract for public safety services with the county, elected city leaders are ineligible, Spitzer said.
Both Shawver and Tom Dominguez, president of the Association of Orange County Deputy Sheriffs, said they had a different legal opinion that allowed city representation.
Supervisors and labor leaders have been squaring off for the better part of the year over an attempt by supervisors’ appointees on the retirement board to accelerate amortization schedules and lower investment assumptions beyond the recommendation of staff.
The debate is playing out against the backdrop of a soaring unfunded liability, now beyond $5.7 billion.
Supervisors and their appointees have argued that despite higher payments for plan sponsors, tightening repayment schedules and lowering investment assumptions is the fiscally responsible path, both for current and future retirees.
Labor leaders, however, have asserted that supervisors are abusing their positions to artificially boost pension payments with the aim of cutting public services.
“Exploiting those issues have translated into a big political payday for some,” said Jennifer Muir, assistant general manager of the Orange County Employees Association.
Supervisor John Moorlach fired back at Muir, arguing that “I don’t think there’s anything political to discussing math equations.”
While Ball generally avoided talking about his position on the issue, he indicated his votes would be consistent with the intent of supervisors to seek the most conservative assumptions on the retirement system.
The catch for supervisors such as Pat Bates, whose 5th District includes many contract cities, is that those kinds of moves will inevitably increase public safety costs.