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The upcoming election asks the voters to decide if the position of city treasurer should be elected by citizens or appointed by the City Council.
The job of city treasurer should be to protect taxpayers' interest and money; to inform the city council and ensure that the money is spent wisely; and to make these expenditures "transparent."
This fiduciary duty exists regardless of popularity or politics. This is my definition of what a treasurer should do since this office has been largely ceremonial and irrelevant in the past. When I was elected city treasurer two years ago these were the conditions in Nevada City:
• No city audits had taken place for three years. Neither the staff, nor the council seemed aware of this. We now have a new audit firm and audits are up to date.
• The grand jury headlined their Nevada City report "Asleep at the Wheel." Not a wonder.
• About $750,000 of city debt to PERS ( Public Employee Retirement System), our main pension plan, was hidden, denied as debt, and not included in previous audits. The side fund debt was not easy to see because PERS disguises the numbers through separate reports not seen by the City Council and complex formulations for payment.
With every pay raise to employees, the retirement value needs to be recalculated to include the retroactive cost to the pension plans. During a recent visit by a PERS representative, he said that the city's retirement plan, known as a "defined benefit plan" is among the "most generous" that he had seen.
PERS is aggressively invested in real estate and the stock market, so if PERS ever fails to contribute a strong investment return, which used to be unimaginable, then the city still must pay these obligations. The city has now recognized the side fund debt and refinanced it from the original 7.75 percent to 3 percent interest. Obviously, transparency has some benefits to taxpayers.
Pension costs are now approaching of $400,000 per year, which is one of the city's larger "built-in" expenses. Our payroll for retired employees could well exceed payroll for present employees in the future.
These "defined benefit plans" that public agencies, including Grass Valley, Nevada County and the State of California give are highly controversial, especially in today's financial world.
We are not seeing any private industry come out from under these types of benefits without much cost and/or bankruptcy. It is important, especially now with a contracting economy, for taxpayers to understand their cost.
Recently, the voters of Nevada City had to pass Measure S, a half-percent sales tax increase to correct the decades of deferred maintenance for the city streets. The citizens voted for this tax since the streets were obviously in bad shape.
Yet, in the previous decade: We built a multimillion-dollar City Hall, improved the Pine Street Bridge to historical standards, and increased pensions retroactively by almost $1 million. Where were the votes for these? They became "built-in" so anything else, such as streets become special options that require a tax increase. As these "built-ins" become a larger portion of the budget the amount left for basic services will disappear ... unless we vote for tax increases.
It is not the job of the treasurer to vote on employee compensation. I respect and admire the excellent work they willingly perform. However, the taxpayers, voters, and members of the City Council of Nevada City are entitled to facts on financial impacts.
Make your vote to keep the job of city treasurer elected, unpaid, and a mandate to the City Council to properly define the job for the benefit of the voters and the taxpayers in Nevada City.
George Foster is Nevada City treasurer.
The job of city treasurer should be to protect taxpayers' interest and money; to inform the city council and ensure that the money is spent wisely; and to make these expenditures "transparent."
This fiduciary duty exists regardless of popularity or politics. This is my definition of what a treasurer should do since this office has been largely ceremonial and irrelevant in the past. When I was elected city treasurer two years ago these were the conditions in Nevada City:
• No city audits had taken place for three years. Neither the staff, nor the council seemed aware of this. We now have a new audit firm and audits are up to date.
• The grand jury headlined their Nevada City report "Asleep at the Wheel." Not a wonder.
• About $750,000 of city debt to PERS ( Public Employee Retirement System), our main pension plan, was hidden, denied as debt, and not included in previous audits. The side fund debt was not easy to see because PERS disguises the numbers through separate reports not seen by the City Council and complex formulations for payment.
With every pay raise to employees, the retirement value needs to be recalculated to include the retroactive cost to the pension plans. During a recent visit by a PERS representative, he said that the city's retirement plan, known as a "defined benefit plan" is among the "most generous" that he had seen.
PERS is aggressively invested in real estate and the stock market, so if PERS ever fails to contribute a strong investment return, which used to be unimaginable, then the city still must pay these obligations. The city has now recognized the side fund debt and refinanced it from the original 7.75 percent to 3 percent interest. Obviously, transparency has some benefits to taxpayers.
Pension costs are now approaching of $400,000 per year, which is one of the city's larger "built-in" expenses. Our payroll for retired employees could well exceed payroll for present employees in the future.
These "defined benefit plans" that public agencies, including Grass Valley, Nevada County and the State of California give are highly controversial, especially in today's financial world.
We are not seeing any private industry come out from under these types of benefits without much cost and/or bankruptcy. It is important, especially now with a contracting economy, for taxpayers to understand their cost.
Recently, the voters of Nevada City had to pass Measure S, a half-percent sales tax increase to correct the decades of deferred maintenance for the city streets. The citizens voted for this tax since the streets were obviously in bad shape.
Yet, in the previous decade: We built a multimillion-dollar City Hall, improved the Pine Street Bridge to historical standards, and increased pensions retroactively by almost $1 million. Where were the votes for these? They became "built-in" so anything else, such as streets become special options that require a tax increase. As these "built-ins" become a larger portion of the budget the amount left for basic services will disappear ... unless we vote for tax increases.
It is not the job of the treasurer to vote on employee compensation. I respect and admire the excellent work they willingly perform. However, the taxpayers, voters, and members of the City Council of Nevada City are entitled to facts on financial impacts.
Make your vote to keep the job of city treasurer elected, unpaid, and a mandate to the City Council to properly define the job for the benefit of the voters and the taxpayers in Nevada City.
George Foster is Nevada City treasurer.
