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:
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“…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.
Frerichs Response:
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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)
(Source: http://www.co.champaign.il.us/countybd/PPA/060906minutes.pdf
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”.
Yikes, Call this one on account of boredom.
Comment by A guy... Thursday, Aug 14, 14 @ 10:55 am
Cross is still using that $3 million talking point even though it was debunked by the republican-appointed, nonpartisan, county administrator?
=== However, Champaign County Administrator Deb Busey said the retirement program was not Frerichs’ idea, and that it lost the county $350,000, not $3 million.===
Strike three and you’re out.
Comment by Big Debbie Thursday, Aug 14, 14 @ 10:56 am
LOL, seriously, historic Dow Jones returns? Who is supposed to process all this stuff?
There’s not enough oxygen in the room for this “race.” Cross will likely win on name recognition alone.
Comment by wordslinger Thursday, Aug 14, 14 @ 11:13 am
The best defense Frerichs can come up with is that the cost-saving ERI he proposed only ended up losing $350,000 instead of $3,000,000? … and that’s strike three against Cross? Wow, I guess math really IS hard…probably why “The Guy” got bored reading the article.
Comment by Unknown Analyst Thursday, Aug 14, 14 @ 11:15 am
wordslinger - the only reason the historical returns are relevant is Frerichs’ continued claims that market losses made his ERI go bad, when, in reality, the market declines had already occurred when he made his proposal. It shows Mike didn’t understand pension accounting at the time, and still apparently doesn’t understand it.
Comment by numberslinger Thursday, Aug 14, 14 @ 11:18 am
I think the County Administrator is using fuzzy math! The bond that was used was for $1 Mil in 2005….the last payment for the retired bond was made in Jan. 2014 for $405K. Let’s talk about all of the “Pink Slips” employees were handed after the failed ERI for IMRF. How about the hiring freeze due to the failed ERI plan? Let’s just suppose that Frerichs really understood the market, if so, would really have gambled with the taxpayers money? Frerichs took a two day course and became a Certified Public Finance Officer and I slept at a Holiday Inn, does that qualify me to invest other peoples money on a hunch, gamble, maybe or potential budgetary save?
Comment by ShampooBanana Thursday, Aug 14, 14 @ 11:21 am
Blah Blah Blah
Talk about insider banter.
Any votes moved yet, over this?
Comment by walker Thursday, Aug 14, 14 @ 11:24 am
Numbers, my point is that I doubt there are 100 voters in the state who will tune into this back-and-forth between Cross and Frerichs.
Comment by wordslinger Thursday, Aug 14, 14 @ 11:25 am
=== wordslinger - Thursday, Aug 14, 14 @ 11:25 am:
Numbers, my point is that I doubt there are 100 voters in the state who will tune into this back-and-forth between Cross and Frerichs.====
You’re being uncharacteristically very generous offering up 100 here. Rahm could count ‘em on either hand. Wouldn’t need both.
Comment by A guy... Thursday, Aug 14, 14 @ 11:38 am
I’m just doing the math, you know, regular math and not common core math.
Comment by ShampooBanana Thursday, Aug 14, 14 @ 11:43 am
Mind numbingly boring arguments in a race nobody is paying attention to. This should end well.
Comment by Anonymoiis Thursday, Aug 14, 14 @ 12:44 pm
I vote that we no longer pay any attention to this race.
Comment by VanillaMan Thursday, Aug 14, 14 @ 12:53 pm
The race is incredibly boring. I do not dispute that. We should have boring people and not politicians as Treasurer. But moving on, in Frerichs defense (cringe) its not like any county auditor does the actuarial math on an ERI program, an actuary does. And the actuary was either hired by the county (maybe Frerichs), by IMRF, or both a county actuary and an IMRF actuary ran numbers.
I have nothing site appropriate to say if I am wrong and we have county auditors costing ERI programs. Yikes
Comment by Lil Squeezy Thursday, Aug 14, 14 @ 2:04 pm
Frerichs playing Defense, Cross playing offense… Cross is going to win this by 6 points easy…
Comment by Lance Thursday, Aug 14, 14 @ 6:48 pm
Mike should be checking the House transcripts for Cross’ statements during debate of 1995 Edgar plan and 2003 Blago plans to start.
Will they? I don’t know. All I know is that I got a fundraising email from his campaign manager - or finance director, forgot which one - and it all made sense to me at that point.
Comment by low level Thursday, Aug 14, 14 @ 7:16 pm