This issue has a lot of angles to it — it is hard to figure out where to start.
According to The El Paso Times article the El Paso Firemen and Policemen’s Pension Fund is considering buying a building. They currently lease space in a downtown high-rise. They have seven employees and serve about 3,200 members. Their current rent is about $85,000 per year. The new building would cost them somewhere around $600,000. It would be about 6,800 square feet and have a large parking lot.
The Times says that the purchase “comes at a strange time” with the pension fund having a shortfall of $270 million.
Ok, let’s start:
- $85,000 dollars a year for office space and meeting areas for an organization that has seven employees is a lot of money
- The chief financial officer of the city, who is a member of the pension board, was quoted as saying “It should pay for itself in about seven or eight years…”.
- Why would the Times think that saving money today and over the long run is a “strange time”?
Then look at the cost of the current space:
- $85,000 dollars a year for seven employees and the few members that they can serve at a time is a lot of money
- Private businesses make do with a lot less space and cost per employee
- If they need to have large meeting facilities they should rent them as they need them, not pay for them every month
- What kind of board of directors wastes membership money like this?
Is the board considering leasing out part of the new building to some other agency and thus generating money for their members?
The city staff comes across as they normally do:
- A city council member suggested that the board should have explored other options with the city
- According to the article the city manager said “said such a deal would have been possible and tried to reach out to the fund.”
- The board member who is also the chief financial officer of the city endorsed buying the building and was quoted as saying “I think it’s a good deal for the fund based on what was presented to the board…”.
- Did the city manager reach out to the chief financial officer? How far would the reach have to be? These people see each other daily. Do the city manager and chief financial officer disagree, or is someone not telling the truth?
Why does this organization even exist?
- Texas has statewide pension organizations for other types of employees. Teachers, municipal employees, state employees all benefit from having organizations that function statewide.
- We don’t see a separate pension fund for teachers in El Paso and separate ones for each city in Texas.
- We do see separate police and/or firefighter pension organizations in several Texas cities. Why? Would centralization save administrative costs and thus allow more money to go to the members? Does our El Paso organization do a better job of investing money than the organizations in other cities? Why do we have a $270 million shortfall? Wouldn’t a statewide organization have a better chance of paying for talent to get the best investment results?
Once again, why was the Times concerned about the timing of this deal? Were they just carrying the water for the city?
We deserve better
Brutus
elpasospeak 