With his reckless and turns on its head the Mayor’s Town Council’s hard and continuing work to reduce costs and save taxpayer dollars whenever reasonably possible. Ignoring the fact that the municipal budget today is less than it was four years ago, he sacrifices on the altar of political gain the reputations of professionals who served the Town of Westfield with distinction. Mr. Haas also indicts all but one of the Council members with which he has served over the years, each of whom he accuses not only of helping the Town’s professionals to “game the system” but also, incredibly, to “bankrupt the pension system for all of the legitimate care full-time employees.” Needless to say, the facts do not support Mr. Haas’ hyperbole. But facts never get in the way of a good story, or a better headline. For those that agree that facts do matter, I offer them here.
Mr. Haas is intentionally misleading, at worst, and simply wrong, at best, when he asserts that according to the July 17, 2012 report (Report) of the Office of the State Comptroller (OSC), “about 60% of the communities in NJ” were in compliance with the law “and had no part-time attorneys in the pension system after 2007.” The Report clearly states that it surveyed only 58 of 1,170 local units in the state, and that in the OSC’s view 57 of them were not compliant. The Report goes on to note – twice – that “OSC conservatively estimates that a review of the remaining 515 municipalities and 597 school districts not included in our survey could yield hundreds of additional professionals inappropriately enrolled” in the public pension system. Thus, Mr. Haas’ statement that Westfield was “in the 40% minority of municipalities which got the wrong legal answer on this issue” is pure fiction.
Councilman Haas’ fuzzy math notwithstanding, the OSC concluded in its July 17, 2012 report (Report) that more than 98% of the local units – municipalities and school districts – that it surveyed were not complying with the State’s current interpretation of the pension reform law passed in 2007 and effective on January 1, 2008. In other words, nearly every town and school board surveyed, of all socio-economic and political stripes, including Westfield, interpreted the 2007 law the same way. Until last month, there had been no indication whatsoever that that interpretation was incorrect. Indeed, even now, not a single Town of Westfield professional has been found to have received pension benefits improperly; but why wait for a formal and final determination of the facts when there are political points to score.
As Councilman Haas is aware, it is the State of New Jersey, not the Town of Westfield, that mandates who must enroll in the State pension system and in what plan. Prior to the enactment of the 2007 law, the State required all non-seasonal, non-police and fire employees earning over $1,500 per year and not collecting another government pension to enroll in the State’s Public Employees Retirement System (PERS) as a condition of employment. Any governmental entity that did not comply was penalized. The 2007 reforms established new enrollment thresholds for PERS and also created a new pension plan, the Defined Contribution Retirement Program (DCRP), for local appointees and new employees who do not meet the new PERS thresholds. Since the law went into effect, Westfield uniformly has applied the new enrollment criteria and all new hires and appointees are properly enrolled in the pension plan prescribed by the State. Mr. Haas does not and cannot allege otherwise.
As to the Town’s professionals that were enrolled in PERS before January 1, 2008, the Town of Westfield carefully considered the new law and followed in good faith the instructions included in a notice about it issued by the State in December, 2007. That notice specifically provided that “[a]n individual who was a member of PERS prior to July 1, 2007 may continue their PERS membership when appointed to a DCRP position, if the person has ‘continuously’ been a member since that time.” Accordingly, five part-time employees who were then providing professional services to the Town, and who had been receiving the PERS pension benefit all along as part of their compensation, continued to do so. When the OSC’s Report was issued last month, only one of those employees was still serving the Town. The Report was the first time that the State has ever taken a position contrary to the guidance it had given since 2007.
The Report does not name any individuals and only “recommends” that the Division of Pensions and Benefits review the pension credits accrued by the type of professionals referenced therein. Notwithstanding, the sole remaining part-time Town employee enrolled in PERS has now resigned that position. He did so not “because of the publicity” surrounding the OSC Report, as Councilman Haas maliciously presumes, but because it is now apparent that the State believes he is not eligible to be enrolled in that program. Contrary to Mr. Haas’ baseless accusations, Westfield’s professionals, like its elected officials, endeavor to follow the rules. To suggest otherwise is fallacious and petty.
In its simplest terms, the pension issue rests upon who is an “employee” of the Town eligible for PERS benefits and who is an ineligible “independent contractor.” That determination is made using criteria promulgated by the IRS. As Mr. Haas belatedly acknowledges in his press release – after he bothered to inquire about it – “[w]e did the appropriate analysis ... it was done as required…. We sent our analysis to the Division of Pension Benefits [sic] recently for them to review in their investigation of the people from Westfield that might be affected. So we have responded appropriately to the [R]eport – even before my comments reached the public.” In other words, Councilman Haas should look before he leaps, and certainly before he defames good and honest people.
Reasonable minds may differ about who is an employee under IRS guidelines and who is not, and also who among those employed on January 1, 2008 was eligible for PERS pension benefits and who was not. Indeed, the clarification from the State in the Report appears long overdue, given the complexity of the issues and that 57 of 58 entities similarly interpreted the law. But it is grossly unfair for Councilman Haas to suggest that the Town’s dedicated professionals and its elected officials were complicit in an effort to defraud taxpayers. The Mayor and Town Council consistently strive to ensure that taxpayer money is not “wasted.” That is why we recently refinanced outstanding bonds at a substantially lower interest rate, saving taxpayers more than $180,000 over the next five years; that is why we have made the difficult decisions that enabled us to lower the municipal budget for three years in a row; and that is why we have reduced the number of Town employees by 20% since 2006 and overall salaries and wages to below 2005 levels. In contrast, Councilman Haas would have the Town replace a long-awaited, highly effective, and fully functioning pedestrian traffic signal on Central Avenue -- truly a senseless waste of taxpayer money. Those are the facts.
The professionals and elected officials who honorably serve and have served Westfield deserve better than to have their motives questioned and their good faith actions described as “wrong and illegal” by a colleague looking to score political points. As on this page, the Report concludes with recommendations, not indictments. Westfield did not “miss the boat” on the change in the 2007 pension law; its officials thoroughly reviewed the 46-page statute and related guidance from the State, and reached the same conclusion as nearly every other municipality that did the same. Notwithstanding Councilman Haas’ skepticism, the Mayor and Town Council will continue to make decisions in good conscience, based upon the best information available, and will continue to be good stewards of taxpayer funds.
Sam Della Fera, Jr.
Chair of the Town Council’s Finance Policy Committee