Michigan taxpayers sending 80 officials to Hawii

[The following article is from the Detroit Free Press on May 3, 2007. It is insane to note that our State has a terrible economy. TERRIBLE. The State Superintendent recently could not attend a conference of state superintendents in Washington, D.C., because of a spending freeze at the Department of Education. This is an INSANE way to spend taxpayer money. Sending DOUBLE the number of any other state. Come on, people, we are in a CRISIS in the State of Michigan. Things are not good. Things are not well. However you want to say, the economy is BAD. Pass this story around.]

Mich. taxpayers sending 80 officials off to Hawaii
State's pension seminar attendees say it's part of job

May 3, 2007

BY JENNIFER DIXON and VICTORIA TURK, FREE PRESS STAFF WRITERS

Nearly 80 officials across Michigan -- more than twice the number of any other state -- plan to fly off to Hawaii this month for a weeklong conference on public pension issues. And taxpayer-backed pension funds will pay the tab.

Leading the Michigan contingent are 13 officials from Detroit, making Detroit second to only Chicago, which planned to send 16 people, according to a list of registrants compiled by the event's sponsor and obtained by the Free Press.

Michigan communities investing in pension training at the Hilton Hawaiian Village Beach Resort and Spa include:

• Monroe County planned to send nine people; the City of Monroe, five.
• Grand Rapids and Pontiac planned to send seven each.
• Oakland County planned to send five.

Among Detroit officials listed as attending are Mayor Kwame Kilpatrick; Fire Commissioner Tyrone Scott; Marty Bandemer, president of the Detroit Police Officers Association; the Rev. Wendell Anthony, and City Council members Monica Conyers and Alberta Tinsley-Talabi. All have roles in overseeing the pension systems.

Matt Allen, a Kilpatrick spokesman, said the pension board will pay for the costs of the Detroiters, but Kilpatrick will cover his own airfare, meals and incidentals.

Police Chief Ella Bully-Cummings was also listed to attend. But, when contacted by the Free Press on Wednesday, James Tate, a police spokesman, said Bully-Cummings would not be going, adding that her about-face was "made some time ago" as other priorities arose.

Allen said Kilpatrick will use the conference to better understand issues facing the city's public pensions. "This isn't a vacation, this is a working conference, and the fact that it's in Honolulu, it's a bonus," he said.

Or a week at the beach?

Leon Drolet, executive director of the Michigan Taxpayers Alliance, said he doesn't understand why so many officials in the state are traveling for a week in Hawaii when Michigan is mired in a fiscal crisis and many communities and school districts are facing budget shortfalls, employee buyouts and layoffs.

"The leaders of Detroit and Lansing keep telling the public they've cut spending to the bone, yet they can say that with a straight face while getting ready to fly to Hawaii on the taxpayers' dime. It's obscene," Drolet said.

"When you're sending a delegation of that size, that includes politicians, this is clearly a vacation on the beach while their constituents are struggling to find and keep jobs."

The National Conference on Public Employee Retirement Systems, a nonprofit, public-pension advocacy group in Washington, D.C., is sponsoring the conference. Organizers say they expect more than 600 officials nationally to attend, with the group expanding to 900 when spouses and other companions are accounted for.

Conference room rates begin at $219 at the Hilton Hawaiian Village, which covers 22 acres on Waikiki and has 22 restaurants and lounges. The events begin May 18-19 with a program for pension board trustees costing $295 a person. The main conference runs May 20-24 and costs $595 for pension fund members.

It's unclear how much officials flying out of Detroit are paying for airfare. A search Wednesday of expedia.com showed Detroit-Honolulu round-trip rates from May 18 to 24 beginning at $751.

Also planning to send large delegations from local, county and police and fire pension boards in Michigan are Trenton, with seven, and Washtenaw County, five. A Trenton official said three are spouses planning to pay their own way.

Last year, 88 people from Michigan attended the same conference in Ft. Lauderdale, Fla., including nine from Detroit.

Hank Kim, executive director of the National Conference on Public Employee Retirement Systems, made no apologies for hosting in Honolulu.

"The cost of going to Hawaii is very comparable to other major convention cities," he said, citing Orlando and Las Vegas.

Kim said Michigan has more public retirement systems than many other states, 140 out of 2,656 nationwide, according to his organization's count.

Pennsylvania has 925 public retirement systems. But only two people from those public pensions are going to Honolulu. Florida, which plans to send the second-largest delegation -- 38 people -- has 158 public pension funds.

Kim said he was pleased to see so many from Michigan are going, saying it "shows our trustees from Michigan take their fiduciary responsibilities very seriously."

Kilpatrick went to one meeting

But some of the Detroit officials signed up for Hawaiian Village have rarely been seen at city pension meetings.

For example, since Jan. 1, 2006, the board of Detroit's General Retirement System has met 53 times. Minutes from those meetings show Kilpatrick, an ex-officio member, attended just one session, on April 19, 2006 -- and only briefly. The meeting began at 9 a.m., and minutes indicate he entered the room at 11:25 a.m. and left before any other business was conducted.

Bully-Cummings and Scott are ex-officio members of the board of the Police and Fire Retirement System. Since January 2006, the board has met 56 times. Minutes do not show that Bully-Cummings attended any meetings. Scott was present at four, minutes show.

Detroit, which is wrestling with a financial crisis, could use an investment boost. The mayor says Detroit faces an $88-million gap in the fiscal year that begins July 1, though the City Council's fiscal analyst predicts the city's deficit will exceed $100 million.

As a result of its budget problems, the city has fallen behind on payments into its general retiree pension funds for the last two fiscal years, according to an Auditor General's Office report in April.

The report said the city owes the general retiree system $24.5 million for the 2005-06 fiscal year, which the city's finance department said it will pay by June 30. The city is negotiating with the general and police and fire pension boards to pay the $186 million it owes for the current fiscal year over the next two years.

In 2005, the city issued $1.2 billion in bonds to pay for its total pension obligation but has since fallen behind on the payments.

Why conference can be valuable

Ryan Francis, a spokesman for the National Conference, said participants are typically pension plan directors and those involved directly in running the pension systems, along with actuaries, money managers and investment bankers.

"We have speakers throughout the morning and then into the afternoon we have more than 20 concurrent sessions on everything from ... health care, investment and ethics issues," Francis said.

Jan Lazar, president of Benefit, Evaluation and Retirement Services Inc., a consulting practice based in Lansing, said the networking at the conference and the individual sessions can be extremely valuable for people who run public pensions across Michigan.

Lazar said pension boards typically pick up the costs of such conferences -- and pension funds are typically funded by tax dollars, investment income and, in some cases, employee contributions. Some pension systems require their trustees to get yearly training.

"Each board has the same fiduciary responsibility to have their trustees be knowledgeable about how to operate their system. It doesn't matter if it's a $1-million or a $100-million system," Lazar said.

Jeff Hornauer, a Trenton firefighter-medic and a member of the Trenton Fire and Police Pension Board, said the board is paying the travel costs for those officials attending this year's meeting in Hawaii.

Hornauer, who is not going to the conference, said that as a taxpayer he doesn't mind helping to underwrite the costs of the trip if it helps the system.

"We do have a fiduciary duty to the pension system, and one of those duties is to keep up with current trends, including investments and styles of investing," he said.

Oakland County Commissioner Mike Rogers, who joined the county's employee retirement commission this year, was looking forward to a two-day training session in Hawaii. But he said he decided not to go because of a schedule conflict.

"This was the first opportunity for me to get training, and I better know something when we're dealing with more than $1 billion in investments," he said. "But I hate it when these conferences are in Hawaii, because questions like this always come up."

Contact JENNIFER DIXON at 313-223-4410 or jbdixon@freepress.com. Staff writers Kathleen Gray and Marisol Bello contributed to this report.