Many contend we cannot find common ground on key issues, but the recent discussion over Champaign’s failed ERI program reveals a lot of common ground between the Cross and Frerichs camps. For instance:
1. We all agree on Frerichs’ role in providing the data and analysis the county board used to make the decision on the failed ERI program.
From Frerichs’ response posted on Capitol Fax:
“…Frerichs provided us with an analysis that showed both costs and potential savings…” (Michael Graham, former Champaign County Board member and CPA)
“…the administrator asked Mike to review its advantages and disadvantages. Mike did so and presented his findings to the Board, who then adopted it in a bipartisan fashion…” (Steve Beckett, former Democratic Champaign Board and architect of the legislation to take over the Lincoln Library)
2. We all agree the program was a costly failure. At no point in Frerichs’ response does he or his fellow county officials dispute the program was a massive failure that ended up costing Champaign County taxpayers in excess of $3 million. Even though at the time Frerichs said the plan would “be a good tool to deal with budgetary problems for the county board.” (CNG, 7/3/03)
Now, there are a few points of disagreement.
1. Again, instead of taking responsibility for bad analysis and recommendations, Frerichs’ attempts to shift the blame to the market. But, just like the ERI debacle, Frerichs relies on bad math.
On the Champaign County early retirement initiative, many financial experts missed the continued recession that occurred after those decisions were made, not by Mike Frerichs but by other county leaders. The Champaign News-Gazette correctly pointed this out in its 2004 endorsement of Frerichs for County Auditor.
This is just wrong. The market rebounded after ERI was passed, but Frerichs did not account for the market losses in 2001 and 2002 in his analysis for ERI, and that’s why the 2003 ERI program was such a failure. As a result of the ERI and negative investment returns that were already known at the time ERI was proposed and passed, the county faced $2.5 million in new unfunded liability which prompted them to issue bonds in 2005 costing taxpayers over $3 million. (Source: IMRF Champaign County Historical Funding)
Take a look at the Dow Jones Returns. The market performed well after ERI. Frerichs never factored in the losses in 2001 and 2002. Dow Jones Averages
2. Frerichs’ Performance was definitely an issue in his removal as the County’s IMRF Agent
The County Board debate on this issue clearly outlines frustration with mistakes made by the County Auditor along with an office overly focused on politics. As noted also, Frerichs opposed his removal as IMRF Agent.
Before the vote to remove Frerichs from the position, Champaign County Board member Scott Tapley said “This is a move that is long, long overdue, I am not going to beat a dead horse but mistakes have been made in the past. This is a financial decision that should be made every year, politics should be removed and we should have these decisions made by administration.” (County Board Meeting – 9/21/06, Resolution No. 5643 – Audio)
3. On the patronage issue, that’s a debate between Frerichs and the Champaign News Gazette. But, the Gazette never made the claim Frerichs hired people, their extensive research and reporting argued that Frerichs used his significant clout to have those employees appointed to their positions. Once in the positions, their performances were described by the Champaign News-Gazette with words like “disaster” and “fiasco”.