On May 27, 2010, the Baltimore County Council voted on legislation that would reduce pension benefits for thousands of government workers. The bill, part of a plan by then-County Executive James T. Smith Jr. to shore up the finances of the pension system, limited cost-of-living increases for county retirees and raised the amount of their paychecks county workers were required to contribute. But a last-minute amendment added to the bill would turn out to be worth tens of thousands of dollars to three of the councilmen who voted it into law.
County Executive Kevin Kamenetz and former councilmen Stephen G. Samuel Moxley and Vincent J. Gardina, both of whom have been hired into top positions in the Kamenetz administration, are taking advantage of a new provision of the law that allows them to earn their county salaries, accrue new retirement benefits and bank their council pensions for a lump-sum payout when they retire for good. At a minimum, the three will benefit by $160,000 each, and possibly much more. Although none of the three could have known for sure that they would be in a position to take advantage of it, they and their four council colleagues unanimously approved the amendment.
As a rule, the county prohibits employees — including elected officials — from retiring from one job, collecting a pension and taking another government job, a practice known as "double dipping." That restriction is key to maintaining the health of the pension system. But Baltimore County, like many other governments, has carved out exceptions in an effort to keep some workers on the job longer. The county's deferred retirement plans for police and firefighters were in the news recently for the eye-popping payouts some commanders will receive under the program; in several cases, they will get checks in excess of a half-million dollars when they retire.
But in general, the exceptions to the "double dipping" rule are targeted to specific jobs that are difficult to fill and for which early retirement is a problem. Those programs have strictly defined eligibility criteria, based on a worker's age and years of experience. Not so the provision that Messrs. Kamenetz, Moxley and Gardina are taking advantage of. The only requirement for participation is that an employee be hired before 2007 and get the approval of the county administrative officer. That presents the potential for cronyism and conflicts of interest, and particularly in the case of the county executive, there is no policy justification for it whatsoever.
So far, only four people have taken advantage of this provision — Arnold Jablon, the deputy administrative officer, is the fourth. Mr. Jablon's case is somewhat different from the other three. He had been collecting his $111,181-a-year pension from previous service as a county attorney and permits chief during a several-year stint as a development attorney, and although this law allowed him to return to county service and bank his pension, he is not accruing new benefits, according to county spokesman Don Mohler.
About 15 more people are about to take advantage of the law — police officers who will be transitioning into civilian service but taking jobs currently filled by sworn officers. Those officers will go back into the field, their old jobs will be filled at lower cost, and the county will be able to delay a recruiting class. That example may well be an instance of good judgment and fiscal stewardship if it is helping the county to find qualified people for hard-to-fill jobs. But previously, such determinations about what circumstances warranted a violation of the ban on double-dipping were made through deliberation by the County Council. Now that policy authority lies solely in the hands of the administrative officer, and as the cases of Messrs. Kamenetz, Moxley, Gardina and Jablon show, that can be problematic.
All four of them have been part of the county's inner circle for years and have long working relationships with Administrative Officer Fred Homan. Moreover, both Messrs. Moxley and Gardina were supporters of Mr. Kamenetz in his election bid; Mr. Gardina, in particular, transferred about $200,000 in campaign cash to a slate that helped the executive get elected. Mr. Jablon gave $500 to Mr. Kamenetz, but his former law firm, Venable, was also a significant source of the executive's campaign funding.
For Mr. Kamenetz, the situation presents an obvious conflict of interest. He was the one who appointed Mr. Homan to his job, and he can fire him. Mr. Homan could not realistically have been expected to do anything but approve his boss for the lucrative benefit.
Mr. Mohler said the law is useful in cases like those of the 15 police officers because it enabled the county to fill jobs at a lower cost than it could have otherwise. But that does not apply to Messrs. Kamenetz, Gardina, Moxley and Jablon. Mr. Moxley, the assistant county attorney for government affairs, makes $98,500. Mr. Gardina, who is director of the Department of Environmental Protection and Resource Management, is paid $147,900. Mr. Kamenetz makes $150,000 a year, and Mr. Jablon makes $180,000.
County officials contend that this law is budget neutral in this sense: Had Mr. Kamenetz hired other people for the jobs Messrs. Moxley, Gardina and Jablon fill, the county would have paid the salaries and eventual pension benefits of those officials while also paying the existing pensions for Messrs. Moxley, Gardina and Jablon. But looked at another way, it is clearly not budget-neutral. Mr. Kamenetz wanted to hire these three individuals, and if this provision did not exist, or if the administrative officer had decided not to grant participation in this program to them, the county would have saved hundreds of thousands of dollars.
As for Mr. Kamenetz, there is no question that this law affords him a benefit previous county executives did not enjoy. Even though former County Executive C.A. Dutch Ruppersberger's pension was so good that popular pressure forced a change in elected officials' benefits in the county, Mr. Kamenetz may walk out of office with an even better deal. Mr. Ruppersberger was able to combine his years as a county councilman with those as county executive and, effectively, get credit for 16 years of service at his highest salary. That amounted to an $89,250-a-year payment for life. After that windfall became public, the council (on which Mr. Kamenetz was then a member) changed the rules so that a person who serves as both a councilman and an executive would have his pensions calculated separately.
As a result, Mr. Smith was unable to collect or bank his pension as a councilman (or his state pension from his years as a judge) while serving as executive, and his executive pension is calculated separately from the others.
But because of the new law and Mr. Kamenetz's 16 years on the council, he could leave office after one term with a $41,000 council pension and a $30,000 executive pension. If he wins a second term, his total annual pension would jump to $101,000 a year. But because of this new law, the county will also be on the hook for a lump-sum payout of as much as $328,000. To call that benefit for Mr. Kamenetz cost-neutral is absurd.
This provision of law, which received no discussion or debate before it was enacted, leaves too much room for discretion, serves little policy purpose that could not be achieved through other means and presents obvious conflicts of interest. It should be repealed.