Retirement Board Offers County $30-Million Loan : Government: Supervisors expected to make staffing concessions to the agency, settle interest-payment dispute to close the deal.
The Orange County Employees Retirement Board is prepared to make the bankrupt county a $30-million loan in exchange for resolution of a dispute over interest payments and some staffing concessions to make the board more independent, county officials said Monday.
The agreement is scheduled to be approved by the Board of Supervisors today.
The deal, which has been crafted to help to ease the county’s cash-flow problems, essentially excuses the county from making about $30 million in retirement contributions on behalf of its employees this fiscal year.
Instead, the county would be allowed cover its contributions to the retirement system by drawing down on a special account that was established to pay its “unfunded liability” over the next 13 years. The county will eventually have to repay the amount of money it uses from the unfunded liability account.
“This is a one-time deal so we can adjust ourselves out of bankruptcy,” said Sheriff Brad Gates.
In return for the loan, the county tentatively has agreed to make several staffing concessions that would allow the retirement board to be less dependent on the county. The county would restructure the office that runs the retirement system, allowing the board to administer its own administrative and operational affairs, such as payroll functions.
The county would also add another staff analyst position to the retirement board staff and pursue legislation that would allow the board to hire its own legal advisers, instead of having to rely on the county counsel.
Additionally, the county would settle a lawsuit that the retirement board filed earlier this year over interest payments that retirement officials claim were due them after the county’s Dec. 6 bankruptcy declaration. As part of the proposal that the Board of Supervisors considers today, the county would give the retirement board $358,922.62 for lost interest.
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