The vote came after Pct. 2 Comm. Cole Hefner’s motion to reduce both employees’ contribution to their retirement and the county’s match died for lack of a second.
Pct. 3 Comm. Lloyd Crabtree and Pct. 1 Comm. James Crittenden voted to retain the 10.70 rate, while Hefner opposed and Pct. 4 Comm. Mike Spencer abstained.
County Judge Dean Fowler, who rarely votes other than to break ties, did not vote.
Hefner had proposed reducing employees’ contribution rate from the current seven percent of their paycheck to four percent. His motion also proposed that upon a worker’s retirement, the county would match the workers’ accumulated retirement savings dollar-for-dollar rather than continuing a 2-1 match.
He contended that would save the county hundreds of thousands of dollars. After the meeting, he said the court must guarantee workers a seven percent rate of return on their money, and that the county can only do so with tax dollars.
The actions came at a meeting where a representative of the Texas County and District Retirement System (TCDRS), Roxanne Bita, explained the system in detail. She said Upshur County chose in 1968 to participate in it, knowing the county couldn’t drop out of it, and that state legislation prevents the county from leaving it.
Before Ms. Bita spoke, a citizen, Don McElvogue, objected that the retirement program is a “seven percent guarantee fixed-benefit plan,” and that the county could be exposed for another $3 or $4 million if the stock market plunges, as some predict.
McElvogue expressed concern the county could face bankruptcy. He suggested it opt out of the TCDRS, eliminate the seven percent guarantee, and begin using 401(k) plans for workers and officials.
But Crabtree replied the county couldn’t just opt out because “everyone that’s vested and retired, you’ve got to pay them.”
Ms. Bita said the seven percent rate of return is set by the state legislature, but the county could reduce benefits by lowering its match. However, if the employee contribution was reduced from seven percent to four, employees might not be able to take home all of the additional three percent of their paycheck since they might have to pay taxes on it, she said.
Added County Treasurer Myra Harris, “The county would also have to pay taxes.”
Hefner said the county’s extra taxes would only come to $13,000, while lowering the contribution rate and match would save hundreds of thousands.
Resuming her presentation, Ms. Bita said TCDRS is in the top 20 percent of retirement systems in the nation, and that it provides a system for more than 225,000 Texans. The system encompasses a total of 620 counties and districts, including 252 of Texas’s 254 counties, she said.
About 119 Upshur retirees are in TCDRS, which receives no state funding and which has about $17.6 million in assets, she said. Only 25 to 30 percent of Upshur workers retire and qualify for the system, and they must work for the county at least eight years, Mrs. Bita said.
Of every $1 TCDRS pays in benefits, 77 cents comes from “investment earnings,” 13 cents from employers’ money, and 10 cents from employees’ deposits during their career, she said.
Although the seven percent guarantee is “great,” she said, “when the economy recovers” in a few years, employees “will want to pull their money out” of the system in order to make a better return than that.
“We’re very conservative. . . We don’t chase the market,” Ms. Bita said. She said TCDRS might not make the highest returns, but also won’t get the lowest “when the market dips.”
She said a professional manager could get about two percent more money than an employee investing in a 401(k) plan, and that her system’s costs are less than that of a 401(k).
Fowler said lowering the contribution rate to four percent, and the match from 2-1 to 1-1 would save the county about $364,000. But he told Hefner, “Our payroll is not what you think it is.”
At one point, when some in the audience spoke up during the discussion without permission, Fowler said “you’ll be removed” if they did so again. At that point, Delia Creighton rose and said, “I’ll remove my own damn self because y’all have a conflict of interest”—an apparent reference to the fact that court members qualify for pensions if they serve eight years.
Although she said she would leave on her own, Fowler told Sheriff’s Deputy Tim Morris to remove Ms. Creighton and he went out the courtroom double doors after she exited through them.
Hefner made his motion, which died for lack of a second.
Fowler said “the county employees are living in an atmosphere of fear, anger,” over controversy about the county budget, and that several employees of the Sheriff’s Office had recently left the county’s employ.
He expressed fear Upshur would become “a training ground for other counties.”
The divided court approved continuing putting 10.7 percent of all employees’ salaries combined in its own retirement fund.
Pct. 3 Comm.-elect Frank Berka responded to remarks made by Crabtree at the court’s last meeting, when Crabtree asked Berka if he hadn’t sent county employees a letter pledging not to change their retirement. When Berka denied it, one or more county workers in the audience said Berka had done it.
Berka, who defeated Crabtree in Crabtree’s bid for reelection last May, on Friday read aloud the letter he purportedly sent the employees. It said that if the employee contribution rate was cut from seven to four percent, that would add three percent to a worker’s paycheck.
“Mr. Crabtree and Ms. (Donna) Whitaker (a deputy Tax Assessor-Collector), your attempt to paint me as 2-faced has failed,” Berka said, adding he would appreciate a public apology from them. Both were present, but neither apologized.