Is Mike Coffman Running for the Senate in 2016? David Balmer thinks so.

One of the questions that will undoubtedly be asked in 2015 is who will the Republicans nominate for the U.S. Senate nomination in 2016. Perhaps more precisely, who on the Republican bench has the knowledge, experience,fund raising ability and the "fire in their belly" to face office against U.S. Senator Michael Bennet? Many Republican names come to mind, including Congressman Mike Coffman who won an impressive victory in the 6th CD this past November but does the congressman intend to run for the Republican senate nomination? He hasn't said a word about it. No one knows, except perhaps St. Sen. David Balmer. Since the November election, Balmer has been contacting and meeting with business groups and individuals to raise money for his campaign that he hopes will finally launch his congressional career that stalled many years ago when he lost a Republican primary for the U.S. House in North Carolina. The other question is does Congressman Coffman know he is running for the U.S. Senate yet? 

Why Has AARP Colorado Opted Against Defending Colorado PERA Retirees?

WHY HAS AARP COLORADO OPTED AGAINST DEFENDING COLORADO PERA RETIREES?

A few years ago, when the Rhode Island Legislature broke the public pension COLA (inflation protection) contracts of Rhode Island retirees, the AARP provided legal representation to fight the breach of pension contracts. As I understand it, AARP continues the legal battle in Rhode Island on behalf of these retirees. Yet, in 2010, when the Colorado Legislature took COLA benefits from Colorado PERA retirees AARP Colorado simply "monitored" the taking.

How was the AARP decision made to defend public pensioner rights in one state, but not in another? I can't believe that this was a question of available resources. It doesn't consume a significant amount of organizational resources to have an AARP representative show up to testify at a bill hearing. Is the defense of retiree interests not a central purpose of the AARP?

An AARP representative informed us that the decision of AARP Colorado to simply "monitor" the Colorado PERA COLA taking in 2010 was made with input from AARP Colorado's "volunteer leadership." Who were these persons, serving as AARP Colorado volunteer leaders, whose "input" eliminated the possibility of an AARP Colorado defense of Colorado PERA retiree rights?

Were these individuals (the AARP Colorado volunteer leadership) involved with the Colorado PERA political campaign to take Colorado PERA retiree COLA benefits?

What is the value of the legal resources that the AARP has brought to bear in defending the contractual rights of Rhode Island pensioners? Tens, or hundreds, of thousands of dollars? Why is it that a local AARP chapter, such as AARP Colorado, cannot spend a few hundred dollars fighting for pensioner rights in their home state?

The AARP has worked with the Pension Rights Center to defend public pension contractual rights in the US. Recently, a Pension Rights Center representative (on Facebook) explained that the Center has limited resources, and cannot defend against every attack on public pension rights in the nation, and accordingly has been unable to assist in the defense of Colorado PERA pensioners' rights. But, this begs the question, how is the decision made to defend the rights of some retirees in the United States, but not the rights of others? What amount of Pension Rights Center organizational resources would have been consumed in simply sending a letter or an email to Colorado state legislators objecting to a violation of retiree pension rights?

http://coloradopols.com/diary/66348/why-has-aarp-colorado-opted-against-defending-colorado-pera-retirees

http://www.providencejournal.com/business/pensions/content/20111025-opponents-supporters-prepared-for-battle.ece

AARP Fights Rhode Island Pension Contract Breach, "Monitors" Colorado Pension Contract Breach.

"AARP Foundation Legal Advocacy – Advocacy Issue Teams.

AARP Foundation Litigation (AFL) is an advocate in courts nationwide for the rights of people 50 and older, addressing diverse legal issues that affect their daily lives and assuring that they have a voice in the judicial system."

http://www.aarp.org/aarp-foundation/our-work/legal-advocacy/afl-teams.html

Jay E. Sushelsky, Attorney, AARP Foundation Litigation – (Fighting for Rhode Island Public Pension Contractual Rights.)

"ATTORNEYS OF RECORD

Rhode Island Public Employees’ Retiree Coalition, et al. Carly Beauvais Iafrate, Esq., (401) 421-0065, ciafrate@verizon.net

Jay E. Sushelsky, Esq., (202) 434-2151, jsushelsky@aarp.org

Jay E. Sushelsky, Mo. Bar # 30934, AARP Foundation Litigation

jsushelsky@aarp.org"

http://www.courts.ri.gov/Courts/SuperiorCourt/DecisionsOrders/decisions/12-3166.pdf

http://www.ricouncil94.org/Portals/0/Uploads/Documents/PC-2010-2859_R%20I%20_Council_94_v%20_Carcieri_.pdf

"Jay Sushelsky is a Senior Attorney at AARP Foundation Litigation (AFL), where he practices in the areas of Employee Benefits and Investor Protection. He graduated from Tufts University and Washington University School of Law. Mr. Sushelsky was in private practice in St. Louis for twenty-five years prior to joining AFL in 2005."

http://www.americanbar.org/content/dam/aba/events/labor_law/2014/02/employee-benefits-committee-midwinter-meeting/bio/sushelsky.authcheckdam.pdf

"AARP is represented by Jay Sushelsky of AARP Foundation Litigation and Michael Shuster of AARP, both in Washington. The New York City pension funds are represented by Michael A. Cardozo of the City of New York. 

The Colorado Public Employees' Retirement Association of the City of New York is represented by Gregory W. Smith of the Colorado Public Employees' Retirement Association in Denver."

http://www.lexisnexis.com/legalnewsroom/securities/b/securities/archive/2012/11/06/high-court-asked-to-decide-whether-securities-suit-may-proceed-as-a-class-action.aspx

"MOTION OF PENSION RIGHTS CENTER AND AARP FOR LEAVE TO FILE AMICI CURIAE BRIEF IN SUPPORT OF PANEL REHEARING AND/OR REHEARING EN BANC

Mary Ellen Signorille

Jay E. Sushelsky

AARP Foundation Litigation

Melvin Radowitz

AARP

601 E Street, NW

Washington, DC 20049

Counsel for AARP"

"The local chapter of the (Rhode Island) AARP has been lobbying its 135,000 Rhode Island members to oppose the existing (pension COLA-taking) bill and is also asking its members to attend Wednesday's hearing, which begins at 11 a.m."

"In a recent mailer to 20,000 members who are retired, the AARP said the suspension of the COLAs – which could be frozen for up to 19 years – was 'unthinkable' and could make it 'impossible for many retirees to afford life-saving drugs and basics, such as food and heat. We have to tell lawmakers this is unacceptable.'"

"AARP spokesman John Martin said Tuesday that the position the local AARP has taken with the pension proposal 'is consistent with AARP's advocacy for the retirement security for older Americans, I should say, for half a century. It's consistent with our advocacy for protecting Social Security and Medicare benefits.'"

http://www.providencejournal.com/business/pensions/content/20111025-opponents-supporters-prepared-for-battle1.ece

Here is the AARP Colorado statement (on Facebook) regarding their decision to simply "monitor" the Colorado General Assembly’s 2010 pension reform legislation (public pension COLA taking) rather than defending Colorado public pension contracts:

“The AARP state office, with input from our volunteer leadership, reached the decision to monitor SB10-001.”

AARP: Cutting COLAs is Wrong, (Well, unless it's the Colorado Legislature Breaking Contracts.)

"AARP strongly objects to any cuts to the pension benefits of current retirees, many of whom live on $20,000 per year or less. AARP will continue to fight for solutions that keep the retirement promises made to older Americans."

"What You Can Do

If you agree that it is wrong to cut benefits for those who are already retired, whether it's Social Security or earned pensions, then sign up today to be an e-activist. We will let you know the best time to communicate with your elected representatives.

A. Barry Rand is the CEO of AARP."

http://www.aarp.org/politics-society/advocacy/info-01-2014/tell-congress-protect-retirees-pensions.html

The Interconnected World of Public Pensions: AARP, NIRS, Colorado PERA and the NCTR.

Jay E. Sushelsky, Attorney, AARP Foundation Litigation, Defending Rhode Island Public Pension Contracts.

("NRTA: AARP’s Educator Community has joined the National Institute on Retirement Security, a research and education not-for-profit organization in Washington, DC.)

A few members of the Board of Directors of the National Institute on Retirement Security:

Gregory Smith, NIRS Chair and Executive Director, Colorado Public Employees' Retirement Association;

Meredith Williams, (former Executive Director, Colorado PERA,) NIRS Vice Chair and Executive Director, National Council on Teacher Retirement;

Hank H. Kim, Esq., NIRS Secretary/Treasurer and Executive Director and Counsel, National Conference on Public Employee Retirement Systems;

Bill Finelli, Board Member and Trustee, Employees' Retirement System of Rhode Island;

http://www.nirsonline.org/index.php?option=com_content&task=view&id=13&Itemid=42

"NRTA: AARP’s Educator Community has joined the National Institute on Retirement Security (NIRS), a research and education not-for-profit organization in Washington, DC. NIRS was established to fill a gap in understanding on the value that defined benefit pensions play in ensuring retirement security for workers, as well as their value to employers, and the economy.

Through the collaboration with NRTA, active and retired educators can now access NIRS products and services — at no cost. NIRS programs and information serve as valuable tools to help educate local officials and stakeholders about teacher retirement issues. NIRS member services include: Research, Education Materials, Counsel, Commentary, Events/Speakers, and Technical Assistance.

NRTA and NIRS will continue to work together to help ensure that public pensions remain the cornerstone of retirement security for America’s teachers.

About National Institute on Retirement Security

Founded in 2007 by the National Council on Teacher Retirement, the Council of Institutional Investors, and National Association of State Retirement Administrators, NIRS has a diverse membership of organizations including employee benefit plans, state or local agencies that manage retirement plans, trade associations, financial services firms, and other retirement service providers."

http://www.aarp.org/about-aarp/nrta/info-04-2010/nrta_nirs.html

The taking of earned, contracted deferred compensation from Colorado PERA retirees in SB10-001 was patently immoral. Apart from the question of the constitutionality of SB10-001, recognition of its immorality should have given pause to AARP officials and volunteers in 2010.

Support public pension contractual rights at saveperacola.com.

Tilting the Keystone

(Promoted by Colorado Pols)

Webster defines keystone as "the central principle or part of a policy, system, etc., on which all else depends." Being an ardent opponent of the KeystoneXL in rural Colorado isn't a popular position. The vision for this 21st-century pipeline has been sold as a necessary component of our energy challenges and a massive job creator. Unfortunately, the pipeline is neither and would be better characterized, through the lens of American rural landscapes, as an assault as opposed to an asset.

Giving credit where credit is due, KeystoneXL is someone's vision; when political will combined with that vision the opportunity moved from 'paper to pipeline'. This grand scheme dictates the destruction of  the boreal forest, extracting hydrocarbons formed millions of years ago, forced in a pipeline and moved thousands of miles to Gulf refineries where the final product will be shipped to foreign lands.  It promises thousands of temporary construction jobs and a handful of permanent jobs; it holds the possibility of polluting the nation's largest underground fresh water supply, the Ogallala, and most economists predict the pipeline will increase the cost of gasoline in the Rocky Mountain region 10 to 20 cents per gallon.

From a Colorado perspective there seems to be little upside, and the proposed pipeline project only magnifies our own lack of commitment to a vision of a robust and resilient 21st-century American economy.  In the absence of our own vision, the void is being filled by someone else's.  

But lets for a moment revision the foundation of the Canadian project:  the 1,379 miles of pipe laid horizontal and pointing towards Texas.  Let's  turn it 90 degrees vertical and apply an American idea to the proposal.  Slicing the pipeline into 212 foot segments (the average height of a wind turbine tower, and turning the pipe upwards gives us 34,337 opportunities for wind development across our midwestern landscape.  Using a Colorado-made Vestas product, those sticks transform themselves into 72 gigawatts of wind energy potential, nearly enough generation capacity to displace the 329 coal plants in the United States that face retirement from age or inability to meet new air standards.  Instead of creating a carbon bomb, we've created the infrastructure to displace hundreds of millions of tons of carbon dioxide annually.  

From a fresh water perspective, something important to each and every one of us in the West, displacing 72 megawatts of US coal generation could save over 1,000,000 acre feet of fresh water annually.  Through the lens of job creation,  converting Keystone to kilowatts is the real job creator.  Using industry statistics of an average, 250-megawatt wind farm, simply turning the horizontal pipe upwards would create 150,336 construction jobs, 124,416 positions in manufacturing, 23,040 jobs for planning and development and 7,776 permanent jobs in operations.  From an rural economic perspective, having this scale of infrastructure investment from North Dakota to Texas would give us the platform to create a real, lasting rural renaissance across the Great Plains.

As a part-time creature of Washington, DC mired in rural policy issues, I have little faith that grand visions are possible in today's poisoned political well. My example of slicing the pipeline into wind towers was merely illustrtive but to prove a point on how my personal perspective judges the Keystone plan quite differently from my neighbors. The structural challenges in todays money-soaked, two-party system are daunting.  January will bring us a new majority in Congress that conventional wisdom instructs us will be antagonistic towards alternative forms of energy.  For now I'll hold that criticism until it is earned: Teddy Roosevelt gave us the National Park System; Richard Nixon the EPA, George H.W. Bush gave us the nation's first cap-and-trade program (acid rain) and George W. Bush gave us our nation's Renewable Fuel Standard after putting in place, as Texas Governor, one of the most aggressive wind energy portfolios in the nation.  Unconventional wisdom might better instruct us that new opportunities are just around the corner.

I will remain the optimist.

 

Colorado PERA Considers Entering Hedge Fund Investments.

At a recent meeting of Colorado PERA officials with members of the Colorado Legislative Audit Committee, a Colorado PERA official stated that approximately eight percent of the Colorado PERA portfolio (trust funds) is currently invested in "alternative investments," including private equity investments. What investment fees have been paid on this portion of the Colorado PERA portfolio that is invested in alternative investments in the last fifteen years? What percentage of total Colorado PERA portfolio investment fees have been paid each year on alternative investments? What percentage of total portfolio growth can be attributed to PERA's alternative investments in the last fifteen years? Colorado PERA officials noted, at the Legislative Audit Committee meeting (recording available on-line) that the PERA Board is currently "researching" potential Colorado PERA portfolio investments in hedge funds (recently banned in California by the public pension fund CALPERS.) If the nation's largest pension fund has recently banned investments in hedge funds, why are Colorado PERA officials currently "researching" potential investments in hedge funds?

"CALPERS Dumps Hedge Funds Citing Cost, To Pull $4 Billion Stake."

"The California Public Employees' Retirement System, the largest U.S. pension fund, said on Monday that it will pull all $4 billion it has invested in hedge funds because it finds them too costly and complicated."

"The $300 billion fund, known as Calpers, invests with firms including Och-Ziff Capital Management, Deepak Narula's Metacapital Management and Bain Capital's Brookside Capital and plans to pull the money out over the next year. The fund will also exit from fund-of-funds Pacific Alternative Asset Management Co and Rock Creek Group."

"(Former CALPERS Chief Investment Officer Joe) Dear, who joined Calpers in 2009, embraced riskier assets including hedge funds and private equity funds, to help recover losses suffered during the financial crisis when its investments lost 23.6 percent during the fiscal year that ended on June 30, 2009."

"But in the last years, most hedge funds have not delivered the out-sized returns the industry became famous for, prompting many pension funds and other large institutional investors to question hedge funds' fees which often include a 2 percent management fee and 20 percent of the gains achieved. Hedge funds returned 4.10 percent this year through August, according to Hedge Fund Research, lagging the Standard & Poor's 500 9.87 percent gain."

"The fund's alternative asset program has had its ups and downs in recent years. Former Calpers Chief Executive Officer Fred Buenrostro pleaded guilty earlier this year to bribery and fraud in a federal conspiracy case."

http://www.businessinsider.com/r-calpers-dumps-hedge-funds-citing-cost-to-pull-4-billion-stake-2014-9

Is the Colorado PERA Board "researching" potential investments in hedge funds as a means of increasing the funded ratio of the Colorado PERA pension system from the low 60's? If the PERA Board believes that the funded ratio of the PERA pension system is too low, then why did PERA General Manager Greg Smith recently testify to the Joint Budget Committee that the pension system does not need additional contributions? How can a public pension system with this level of taxpayer liabilities not need additional contributions? Since the pension system's actuarially required contributions (ARC) have not been paid for twelve consecutive years, investment returns on the missing (ARC) funds are lost, and compound each year. Why would the PERA Board not simply endorse a prospective reduction of the 2.5 percent PERA "multiplier" as a means of addressing system unfunded liabilities? (A public pension system's "multiplier" is the percentage of employee salary that accrues for each year worked as the ultimate retirement benefit.) How does the Colorado PERA 2.5% "multiplier" compare with "multipliers" of other major US public pension systems?

"No Vested Right in Pension Multiplier, Supreme Court Majority Says."

http://www.wisbar.org/NewsPublications/Pages/General-Article.aspx?ArticleID=23775

Matt Taibii:

"This is done in the name of saving taxpayer money, even though these 'alternative investments' involve fees paid to billionaire money managers that are often nearly as high as the cuts to public worker benefits."

"In more than a dozen states, legislators have enacted exemptions for hedge funds and other alternative investments to laws such as the Freedom of Information Act."

http://www.afscme.org/blog/its-time-to-hold-wall-street-accountable

From a recent Colorado PERA CAFR:

"The Total Fund underperformed the policy benchmark return by approximately 53 basis points (0.53 percentage points) for the year ended December 31, 2012."

"Alternative Investments was the primary contributor to the underperformance . . ."

What has been the performance of PERA's investment staff historically?  In what years have they missed their peer benchmarks? What has been the cost to the PERA trust funds of these missed benchmarks?

Colorado PERA Executive Director Meredith Williams, February 23, 2012, on the Colorado PERA Board’s historical investing mistakes, and the impact of these mistakes on the Colorado PERA Trust Funds:

“Ten years ago we were pretty aggressive in real estate, very aggressive might be a better characterization. We were very aggressive in what I’ll call private equity or alternatives. At the board’s direction we’ve pulled in our horns substantially, about seven and a half of the portfolio in each of those two, used to be fifteen in each. I think that the portfolio as we headed into the dotcom bust was far riskier than it is today. We paid the price for that.”

(My comment: Meredith Williams tells us here that PERA “paid the price” for its past investing mistakes. Here he admits that the Colorado PERA Board of Trustees has historically made mistakes in setting the asset allocation of the Colorado PERA trust funds. Colorado taxpayers bear the burden of these investment mistakes.)

Support the Rule of Law in Colorado at saveperacola.com.

Campaign-finance lawsuit turns up Koch connection to Woods/Sias race

(Surprise surprise – Promoted by Colorado Pols)

Laura Waters Woods.

Laura “Waters” Woods.

Yesterday, I wrote about a couple of campaign-finance lawsuits, filed by conservative Matt Arnold's Campaign Integrity Watchdog, which  could possibly expose whether top Republicans in Colorado knew about GOP-funded attacks on gubernatorial candidate Tom Tancredo.

Arnold has filed numerous other campaign-finance complaints this year on a variety of topics. See them by clicking on “Complaint Search” here and typing “Campaign Integrity Watchdog” in the “organization” line.

One complaint, in particular, illustrates Arnold’s persistence and shows the public benefits of disclosures required by campaign finance laws. Its story starts during this year's GOP primary after Arnold noticed a website and Facebook ads attacking Republican State Senate candidate Laura Woods. This was clearly direct campaign activity, said Arnold, but the website didn’t disclose who paid for it, as required by Colorado law.

But the website's host was listed, and after Arnold’s Integrity Campaign Watchdog filed a lawsuit, a judge issued a subpoena requiring the company to disclose who paid for the site. Arnold said the hosting company disclosed that it was working for GOP operative Alan Philp, who’s now associated with Aegis Consulting in Virginia, a Koch funded outfit set up to elect “winnable” candidates. (Talk-radio host and former Republican congressional candidate form Colorado Springs, Jeff Crank, is a leader of Colorado’s arm of Aegis Consulting.)

The case dragged on all summer, Arnold said, but eventually Philp “fingered Protect and Defend Colorado as responsible for the Woods website.”

So Arnold pursued a case against Protect and Defend Colorado, a registered campaign committee that supported GOP state senatorial candidate Lang Sias and opposed state senatorial candidate Laura Woods.

A hearing is scheduled, and Arnold, who's not being paid for his work, says he now faces big bad lawyers from Brownstein, Hyatt, Farber, Schreck.

"It'a people playing dirty in primaries. I was a victim of it, when I ran for CU Regent," says Arnold. "So I'm sensitive. When your whole point is to hide behind a proxy server while you're smearing someone, I think that's despicable. If you want to criticize someone, man up and do so publicly, but don't hide behind a shield of anonymity."

Colorado PERA Officials Corrupt State Budget Process. Joint Budget Committee Analyst Silenced.

Colorado state agencies will be surprised to learn that answering questions posed by the Joint Budget Committee's staff and members in the state budget oversight process is optional.

Colorado PERA administrators have manipulated the Colorado state budgetary process to avoid answering budget process questions posed by the members and/or staff of the Colorado Joint Budget Committee (JBC.) This recent Colorado PERA action continues an historical pattern of manipulation of Colorado state legislators by Colorado PERA officials.

The non-partisan JBC staff analyst, who posed the inconvenient budget questions, relating to Colorado PERA pension oversight, is a staffer named Alfredo Kemm. An investigation is warranted of what is clearly political interference with the duties and professional obligations of a non-partisan Joint Budget Committee analyst.

On December 11, 2014, the Colorado Joint Budget Committee set aside 30 minutes for their annual review of this state agency, Colorado PERA. The state's historical mismanagement of the Colorado PERA pension system has racked up nearly $30 billion in state debt. (Yet, 30 minutes were set aside for this review.)

But, even this 30 minutes of Colorado legislative scrutiny of the state agency, Colorado PERA was too much for Colorado PERA administrators to bear. Accordingly, it was arranged that the most difficult budgetary questions posed by the members and/or staff of the Joint Budget Committee would be quashed.

The JBC prepared five sets of questions for Colorado PERA's response at the December 11, 2014 hearing. Colorado PERA officials agreed to answer only the four questions that posed no threat to their political agenda. The fifth set of questions, of the greatest consequence for the State of Colorado, were suppressed. Apparently, state agency administrators have the power to ignore JBC budget questions that they might find politically inconvenient to answer. That is, some state agency administrators (such as Colorado PERA's administrators) view questions posed by the members of the Colorado Joint Budget Committee as optional.

The five question sets posed by the JBC staff and/or members are listed at the end of the PERA response document (at the link below, beginning on page 24.) Note that, at the beginning of this PERA response document Colorado PERA administrators choose to respond to only four of the question sets (beginning on page 1 of the document.)

http://www.tornado.state.co.us/gov_dir/leg_dir/jbc/2014-15/perahrg.pdf

Here is the comprehensive set of questions from the Joint Budget Committee that Colorado PERA ignores in their response to this legislative committee:

"22. Do current normal yearly contributions – member and state contributions – fully fund the retirement liabilities generated over the year for state employee PERA members? If not, what is the projected percentage of current year liabilities that are being funded by the normal yearly contribution and how much should the normal yearly contribution rate increase to fully fund the liability?

IF NOT, WHY HASN'T PERA REQUESTED AN INCREASE IN THE NORMAL CONTRIBUTION RATES FOR MEMBER AND STATE CONTRIBUTIONS IN ORDER TO FULLY FUND CURRENT YEAR LIABILITIES?

OR WHY HASN'T PERA REQUESTED AN ADJUSTMENT TO FUTURE MEMBER BENEFITS THAT WOULD BE FULLY FUNDED BY NORMAL YEARLY CONTRIBUTIONS? (My emphasis.)

If not, what percentage of AED and SAED are for the purpose of fully funding liabilities generated due to the shortfall in normal yearly contributions and what percentage are for the purpose of back-filling or paying off the unfunded liabilities that were recognized at the point that AED and SAED were implemented? Are AED and SAED compensation provided to current state employees or are they payments made for underfunding PERA benefits for state employees in the past? If AED and SAED are intended to cover a shortfall in the normal yearly contribution for current state employees, why shouldn't that percentage be included directly in the normal yearly contribution rather than being lumped in with amortization payments intended to cover existing unfunded liabilities?"

The JBC staff asks why Colorado PERA officials have not sought increased contributions or pension benefit cuts to meet the annually accruing actuarial liabilities of the PERA pension fund. Colorado PERA officials quash and ignore their questions. The fact that questions of such moment for Colorado state finances have been ignored or suppressed by a Colorado state agency does not pass the smell test.

Colorado Revised Statutes: "2-3-203. Powers and duties of the joint budget committee.

(1) The committee has the following power and duties:
(a) To study the management, operations, programs, and fiscal needs of the agencies and institutions of Colorado state government."

"The JBC is statutorily charged with analyzing the management, operations, programs, and fiscal needs of the departments of state government."

http://www.tornado.state.co.us/gov_dir/leg_dir/jbc/jbcrole.pdf

"JBC hearings provide an opportunity for members to question department staff about programs, needs, new funding initiatives and other issues for the upcoming fiscal year."

http://cclponline.org/wp-content/uploads/2013/12/Colorado-Budget-Primer-2012_DOC-6.6.12.pdf

The Joint Budget Committee staff provides an annual written and verbal update to the members of the JBC regarding Colorado PERA. Here is a link to the 2014 JBC staff written PERA update:

http://www.tornado.state.co.us/gov_dir/leg_dir/jbc/2014-15/perbrf.pdf

In this document, the JBC staff reports Colorado PERA's claim that ARC underfunding is $1.4 billion (in the period 2009 to 2013.)

"An amortization contribution deficiency is generated when the actual contributions flowing into PERA are less than the annual required contribution that is calculated as a part of the actuarial liability analysis. PERA reports that the 30-year amortization contribution deficiency over the period from 2009 through 2013 totaled just under $1.4 billion."

The JBC staff document notes that the payment of Colorado PERA pension benefits is a payment of Colorado state and local government debt to creditors:

"Employees earn their pensions while working as a part of their compensation; pensions are not earned when they are received. The retirement pension payment is a payment of debt to the creditor – the retiree – who has already earned that payment. As a matter of fairness, the people who receive that employee's services should pay for those services at the time services are provided."

The JBC staff notes that additional payments must be made into the Colorado PERA pension system to address pension fund deficits:

"Therefore, normal yearly contributions should be fully funding those retirement liabilities. A normal yearly contribution that does not fully fund those retirement liabilities necessarily pushes the unpaid cost to future payers that did not receive those services. Underfunding the normal yearly contribution creates a debt that will have to be repaid by others. If a significant pension fund deficit develops due to underfunding or due to financial market declines, the government must make additional payments to eliminate that deficit with unfunded pension amortization payments."

The JBC staff criticizes the current AED/SAED pension funding mechanism as "back-loaded":

"However, the amortization of unfunded liabilities through the AED and SAED payments was structured as a percentage of payroll amortization rather than as a flat amount amortization over the 30-year projected period of amortization. Further, both AED and SAED payments were also structured to ramp-up the percentage of payroll over a period of time. This ramped-up percentage of payroll payment structure even further back-loaded the amortization period."

The Colorado PERA Board Has Reduced the PERA Portfolio Return Assumption. The Cost of the Reductions Was Paid by Colorado PERA Pensioners with the Taking of Their Statutory "Annual Benefit Increase" (COLA) in 2010.

"In 2013, PERA reduced its investment rate of return and discount rate assumptions to 7.5 percent from 8.0 percent. This followed PERA's reduction in 2009 from 8.5 to 8.0 percent. The rate reduction in 2009 generated a $4.8 billion loss or increase in liabilities in PERA's actuarial liability analysis. The 2013 reduction generated an additional $3.1 billion increase in liabilities.

These changes in rate are responsible for a total of $7.9 billion in actuarial unfunded liability.

These actuarial loss figures give an idea of the scale of change in fund status that is implied when assuming a more conservative rate of return or discount rate."

The 2014 JBC Staff Budget Briefing document for Colorado PERA is available at the following link:

http://www.tornado.state.co.us/gov_dir/leg_dir/jbc/2014-15/perahrg.pdf

For the record, Alfredo Kemm's presentation of his PERA briefing to the JBC begins at 2/06 on the recording of the December 3, 2014 JBC hearing.

To me, it really isn't surprising that Colorado PERA pension administrators have refused to answer the questions of the Colorado Joint Budget Committee relating to the underfunding of the pension system. Colorado PERA administrators recently refused to answer this identical question when posed by Colorado PERA retirees. Colorado PERA retirees requested that lawyers at the Office of the State Legislative Counsel (or the Office of the State Economist) examine the payment of the PERA pension system ARC historically, and provide a comparison of "ARC funding discipline" among major US public pension systems.

Instead of the requested ARC statistics, the Office of the Legislative Counsel acted as a conduit for a Colorado PERA political response, sending the following off-topic political commentary:

“I learned that the State of Colorado has always paid PERA the amount that has been owed by statute.” (My comment: This is an answer to a question that PERA retirees did not ask.)

“According to PERA staff, PERA has never been shorted on receiving these contributions.”

(My comment: Again, PERA retirees inquired about the failure to pay the pension ARC, not statutory contribution rates. There is no issue regarding the payment of statutory contribution rates by PERA employers or employees. The current statutory contribution rates are insufficient to cover the pension ARC.)

“PERA staff also explained that the ARC is just an actuarial calculation and measurement, and it roughly amounts to $3.3 billion for the whole system since 2001.”

(My comment: This $3.3 billion figure does not consider lost investment opportunities for funds not contributed, and is accordingly false. The provision of this figure is intended to minimize the significance of the Colorado PERA pension system ARC underfunding, and mislead the state legislators who followed up on the retirees' request for information. Expecting Colorado PERA officials to casually dismiss the historic lack of Colorado PERA ARC funding discipline, PERA retirees sought out an independent agency to provide the information, the Legislative Counsel. The PERA retirees were disappointed by the political response they received from the Legislative Counsel, but are encouraged by the forthright examination of state pension debt by the Joint Budget Committee staff.)

The December 11, 2014, Colorado Joint Budget Committee annual review of the state agency, Colorado PERA, was recorded. Listen to the JBC agency hearing for Colorado PERA at this link (arrow down to December 11, 2014):

http://www.leg.state.co.us/clics/clics2014A/cslFrontPages.nsf/Audio?OpenPage

Below I provide a few of the most pertinent comments made during the December 11 PERA hearing and my reactions. At 1 hour/49 minutes into the recording of the JBC's December 11, 2014 agency hearing schedule, Greg Smith begins the Colorado PERA testimony to the JBC:

" . . . appreciate the opportunity to be here and meet with you all and answer any questions including the predetermined questions."

(My comment: Greg Smith appreciates the opportunity to answer any of the JBC's "predetermined questions," with the exception of the JBC's question set #22, or any other question that is contrary to the Colorado PERA political agenda.)

"We've provided each of you a packet that consists of a brief slide show that I'll go through . . . also HAS THE WRITTEN RESPONSES TO YOUR QUESTIONS . . ." (my emphasis.)

(My comment: Given the fact that JBC Question #22 to Colorado PERA was ignored or suppressed, this appears to be a false statement by a state agency head. What are the standards that must be met by state agencies in our state budgeting process? Are agency heads granted the power to ignore or suppress budgetary questions at their pleasure? If this is indeed the environment in which Colorado budgeting occurs, I am not surprised that the Colorado PERA ARC under-funding has been successfully ignored for 12 years.)

At 1/56/51 on the recording Greg Smith states: "We don't need additional contributions."

(My comment: Colorado PERA's Greg Smith may very well be alone in the nation in that he, as a fiduciary who heads a major public pension system that is grossly and historically underfunded, testifies to elected officials overseeing the pension system "we don't need additional contributions." This is a truly bizarre position. Colorado PERA is a public pension with a funded ratio in the 60s, headed up by a General Manger who claims that the pension system does not need any additional funding.

I ask: Were Colorado PERA officials speaking the truth to Colorado legislators on February 23, 2012 when [then] Colorado PERA General Manager Meredith Williams, testified to the Colorado House Finance Committee, in regard to the Legislature’s failure to pay the Colorado PERA ARC? Meredith Williams: “We’ve had a significant problem over the years, in that . . . contributions, payments by (PERA) employers into PERA have been kind of the last thing in the budget building process, and we have not made the required payments. Unfortunately, in our line of work, where we’re involved in compounding shortfalls grow, particularly when the shortfalls continue year after year after year.”

Or, were Colorado PERA officials speaking the truth to Colorado legislators on December 11, 2014 when JBC members heard from Colorado PERA that "we don't need additional contributions"?

Logically, only one of these Colorado PERA statements to Colorado state legislators can be true.

Greg Smith's position on public pension underfunding is at odds with the position of the National Governors Association, the National Conference of State Legislatures, the Council of State Govern­ments, the National Association of Counties, the National League of Cities, the U.S. Conference of Mayors, the International City/County Management Association, the Govern­ment Finance Officers Association, the National Association of State Auditors, the Comptrollers and Treasurers Association; the National Association of State Retirement Administrators (NASRA); the National Council on Teacher Retirement, and the financial firms Standard and Poor's, and Morningstar.

NASRA:

"Employer Contributions: A variety of state and local laws and policies guide governmental pension funding practices. Most require employers to contribute what is known as the Annual Required Contribution (ARC), which is the amount needed to finance benefits being accrued each year, plus the cost to amortize unfunded liabilities from past years, minus required employee contributions."

http://www.nasra.org/files/Issue%20Briefs/NASRACostsBrief.pdf

NASRA:

"PENSION FUNDING: A Guide for Elected Officials, Report from the Pension Funding Task Force 2013."

"The 'Big 7' (National Governors Association, National Conference of State Legislatures, Council of State Govern­ments, National Association of Counties, National League of Cities, U.S. Conference of Mayors, and the International City/County Management Association) and the Govern­ment Finance Officers Association established a pension funding task force in 2012. The National Association of State Auditors, Comptrollers and Treasurers; the National Association of State Retirement Administrators; and the National Council on Teacher Retirement also serve on it. The Center for State and Local Government Excellence is the convening organization for the Task Force."

"The Task Force recommends pension funding policies be based on the following . . . have a pension funding policy that is based on an actuarially determined contribution."

"The Task Force recommends that state and local governments . . . stay within the ARC calculation parameters established in GASB 27 . . ."

"The most important step for local and state govern­ments to take is to base their pension funding policy on an actuarially determined contribution (ADC). The ADC should be obtained on an annual or biannual basis."

http://www.nasra.org/files/JointPublications/PensionFundingGuide.pdf

Colorado PERA General Manager Greg Smith at 2/31/40 on the recording:

"I'm not a huge fan of the credit rating agencies and the job that they do."

Standard and Poor's:

"We believe that not fully funding the ARC is a short-term solution that will likely result in a larger unfunded actuarial accrued liability down the line."

"We've observed that persistent underfunding of ARC correlates highly with pension funding contributions that are statutorily or contractually determined."

http://www.nasra.org/Files/Topical%20Reports/Credit%20Effects/A_Bumpy_Road_Lies_Ahead_for_US_Public_Pension_Funded_Levels.pdf\

S&P emphasizes the importance of pension ARC funding discipline. Yet, Colorado PERA staff casually dismiss ARC funding discipline, and ignore the fact that (as S&P's analysts have noted) fixed statutory contribution levels, like those set for Colorado PERA, result in pension systems "with the weakest funded ratios."

Morningstar Analyst Rachel Barkley:

"Although Colorado is still absorbing losses from 2009, the main reason its funding gap is yawning is the state's failure to make the contributions recommended each year by its own budget experts, Barkley said."

"Even if public pensions realize their projected investment returns on average over coming years, the failure by many plans 'to pay less than the full ARC . . . will produce less than full funding over the next 30 years,' according to a recent report by the Center for Retirement Research (CRR)."

http://www.reuters.com/article/2014/03/10/us-usa-pensions-rally-analysis-idUSBREA2907320140310

A recent study by the Tennessee Treasurer's Office reveals that the cost of delaying public pension plan actuarially required contributions [with an assumed 7.5 percent return assumption] for a 12-year period [the Colorado Legislature began underfunding the PERA pension system 12 years ago] is a premium of 138.2 percent of the skipped pension contribution.

Link to the Tennessee Treasurer's report:

http://s3.amazonaws.com/s3.documentcloud.org/documents/1012837/pension-report.pdf

From the Tennessee Treasurer's report:

"It costs an additional $435,000 to delay a one million dollar pension payment for five years assuming an earnings rate of 7.5%. This is a 43.6% increase in the amount to be paid. The pension cost more than doubles by delaying a payment by 10 years. A $1 million pension cost becomes $2.06 million if delayed 10 years. See Attachment 2 that illustrates the cost of delaying employer pension contributions."

"GASB noted in its release accompanying Statement No. 68 that pension contribution issues are public policy matters. Indeed, leading finance professional organizations, including the Government Finance Officers Association have adopted positions calling for governments to adopt a funding policy based on an actuarially determined annual funding amount."

"Failure to pay annually when due the full actuarially required contribution is in effect underfunding the pension plan. The amount that is not funded increases the unfunded accrued liabilities of the plan. Further, the pension plan will not have the under-funded amount available to invest, thereby resulting in lost earnings opportunity."

"The funding for a pension plan assumes that 100% of the ARC will be paid annually, and further assumes that those contributions will be invested to earn at least the assumed rate of return for the pension plan. Thus, the failure to pay 100% of the ARC can quickly lead to a serious underfunding of the pension plan. Chronic underfunding of the ARC will eventually make the pension plan financially unstable. Nationwide, multiple severely underfunded pension plans that are now financially unstable are examples of the failure to pay annual funding requirements."

Greg Smith states (at 2/03/29 on the recording of the December 11 JBC PERA hearing) that the Colorado Supreme Court Decision regarding SB10-001 "was exactly what we had advocated for."

This statement is not entirely accurate. The Colorado Supreme Court Decision in the case, Justus v. State, found that Colorado PERA retirees had no contractual right to the statutory pension COLA benefit (that it can legally be reduced by the Legislature after it has been supported by employee labor and contributions.)

Colorado PERA officials, in 2009, admitted the existence of the PERA COLA contract to the members of the Joint Budget Committee (audio recording and in writing.) Accordingly, in the case Justus v. State, Colorado PERA's lawyers did not initially deny the existence of the contractual right to the PERA COLA, as is implied by Greg Smith's statement at 2/03/29 on the recording. In the case, Colorado PERA officials originally admitted that the contractual obligation to pay the PERA COLA existed, but they argued that a retroactive taking the COLA benefit was "actuarially necessary." As we know, the Colorado Supreme Court ignored this evidence in the case, Justus v. State.

December 16, 2009

Colorado PERA officials in written testimony to the Joint Budget Committee: “The General Assembly cannot decrease the COLA (absent actuarial necessity) because it is part of the contractual obligations that accrue under a pension plan protected under the Colorado Constitution Article II, Section 11 and the United States Constitution Article 1, Section 10 for vested contractual rights.”

http://www.kentlambert.com/Files/PERA_JBC_Hearing_Responses-12-16-2009_Final.pdf

Representative Jack Pommer, JBC Chairman in 2009, asked if the Legislature could legally alter the statutory parameters of the PERA pension to manufacture a “crisis” in order to justify its breach of pension contracts. At the December 17, 2009 meeting of the Joint Budget Committee, Representative Pommer asked: “Are we not just saying we’re going to pick 30 years (as a PERA investment time horizon) because if we’re not balanced within 30 years that creates actuarial necessity which then let’s us change retiree benefits?”

http://www.kentlambert.com/Files/PERA_JBC_Hearing_Responses-12-16-2009_Final.pdf

January 29, 2010

Rep. Lambert on SB 10-001:

 “I have heard from my constituents, as many of you have, that this proposal will breach retiree’s contracts.”

March 11, 2009

Colorado PERA officials place blame on the Colorado General Assembly for creating the latest PERA financial downturn: “Other notable factors (for the downturn in PERA’s fiscal position) include employers not contributing the actuarially determined contribution rates, the sale of purchased service credit at rates below actuarial costs, and the raising of benefits in the late 1990’s coupled with decreasing employer contributions.”

http://www.kentlambert.com/Files/PERA_Response_Pt_1.pdf

August 11, 2009

Colorado PERA’s General Counsel Greg Smith blames the Colorado General Assembly for PERA’s fiscal downturn: “We have not been paid what’s called the actuarially required contribution.” “We’ve not been receiving that full contribution in any of our divisions for many years . . . seven years to be specific.”

http://www.copera.org/pera/about/listeningtour.htm

Greg Smith comments at 2/06/26 regarding the PERA Board's authority, telling the legislative members of the JBC, "you determine what the benefits in the PERA system are exclusively."

I also find this statement by Greg Smith to be disingenuous given Colorado PERA's extensive lobbying activities. Later in this article I provide an example of the level of control of Colorado PERA's lobbyists and lawyers over the Colorado Legislature. A level of control that demonstrates the falsity of Greg Smith's comment "you determine what the benefits in the PERA system are exclusively."

Greg Smith neglected to mention to the JBC members that PERA administrators spend up to $400,000 each year lobbying the legislators to help them "determine what the benefits are."  What is the total Colorado PERA lobbying expenditure related to "determining the benefits" in SB10-001?

From the Denver Post:

"The system budgeted $400,000 for lobbying this year, although it receives help at the state Capitol from influential unions including the Colorado Education Association."

"The fund also has spent as much as $2.2 million per year on staff and contracted attorneys, who advise on benefit disputes with retirees and review investment contracts."

"The fund's $49.6 million administrative budget includes $28 million for salaries and benefits."

http://www.denverpost.com/ci_18404598

A 2009 article in the publication “State Bill Colorado,” addressed the initial recruitment of the Colorado PERA SB10-001 lobbying troop:

“PERA is ‘obviously gearing up for some heavy-duty lobbying, one observer noted. The agency has hired two lobbyists from the firm Colorado Communique, Collon Kennedy and Steve Adams, former president of the Colorado AFL-CIO. The pension system also has hired Mary Alice Mandarich, a well-connected Democratic lobbyist who formerly was chief of staff for Senate Democrats and who worked on campaigns for former Senate President Joan Fitz-Gerald, former Gov. Roy Romer and gubernatorial candidate Gail Schoettler. Coalition members have their own lobbyists, and the well-staffed higher education lobby is sure to be involved in this issue as well.” “All that lobbying power will be focused on 100 legislators . . .”

Link:

http://statebillnews.com/2009/10/pera-woes-loom-large-for-education/

At 2/08/09 on the recording of the JBC PERA oversight hearing Greg Smith comments on a recent e-mail from Colorado PERA retirees to state legislators addressing the failure of the Legislature to pay the PERA pension system ARC.

Greg Smith: "There's been a recent e-mail transmission to a number of legislators questioning whether or not PERA has been paid the contributions that were due to it."

The PERA retirees' "e-mail transmission" did not question whether PERA has been paid the statutory contributions that are due from PERA employers and employees. The e-mail drew attention to the fact that PERA ARC is not being paid. The e-mail states that setting a fixed contribution rate in statute IS NOT THE EQUIVALENT OF PAYING THE ARC."

Greg Smith states: "The concern is that we have not been receiving the ARC for the past many years, AND THAT IS AN ACCURATE STATEMENT, WE HAVE NOT BEEN RECEIVING THE ARC," (my emphasis.)

On the recording, Greg Smith goes on to rationalize the failure of the Legislature to ensure that the PERA pension ARC is paid, stating that since 2010 paying the ARC would have been difficult. He then presents false choices. He presents the false choice of immediately raising both employer and employee contribution rates by four percent in 2010, and ignores the option at the time of PROSPECTIVE benefit reductions, for pension benefits not yet earned, as a means of reducing PERA liabilities. In lieu, of prospective reductions of benefits not yet earned in the PERA pension system, the Legislature enacted a retrospective claw back of contracted pension ABI (COLA) benefits. Colorado's public sector unions wanted to protect active members at the time, and so went after the PERA retirees' contractual inflation protection.

Greg Smith fails to mention that the PERA Board could have proposed a simple reduction in the PERA pension system "multiplier" in 2010. That is, the rate at which PERA benefits accrue each year. A reduction in the PERA pension system multiplier was a policy option available to the General Assembly, as a means of reducing unfunded liabilities and facilitating payment of the pension ARC. The Colorado PERA "multiplier" is currently set at 2.5 percent per year. Rather than reducing the PERA pension "multiplier" the unions involved in the development of SB10-001 schemed to push almost the entire cost of the SB10-001 reform [90%] onto the backs of PERA retirees (who don't pay union dues.)

Some courts have recently sanctioned the prospective reduction of public pension "multipliers":

http://m.jsonline.com/news/milwaukee/supreme-court-oks-milwaukee-county-cuts-to-pension-benefits-b99411960z1-286363761.html

At 2/10/33 on the recording, Greg Smith plays the JBC members like a fiddle, misdirecting the members, and wasting the JBC's time with a red herring. Greg Smith states:

"The other part of that communication that's important is that there was a suggestion that some of the employers are not paying in or PERA is not working to collect those dollars. Every single employer without exception, every single employee without exception has paid all of the statutory contributions that the law of the State of Colorado requires them to pay."

Greg Smith goes on at length, piously assuring the JBC members that something is not happening, that no one has suggested happens. In their e-mail, PERA retirees did not suggest that PERA employers and employees are failing to pay their statutory pension contributions.

Here is the text of the e-mail sent by a number of Colorado PERA retirees to all Colorado state legislators:

"Request for Information Re: Colorado PERA.

Hello, my name is _______. I am a Colorado PERA retiree who is concerned about financial management of the Colorado PERA pension system.

Recently, a letter was published that pointed out the failure of the Colorado Legislature to make 'actuarially required contributions' (ARC) payments to our public pension system, that is, to pay the state’s annual public 'pension bill.'

The letter is available at this link:

http://www.boulderweekly.com/article-13611-letters-week-of-november-13.html

As a state legislator charged with management of our pension system, I ask that you request that your staff, or the Office of the State Economist, examine the level of the Colorado PERA pension system ARC that has been paid historically. I wonder what percent of the Colorado PERA pension system ARC has been paid in recent decades and how this percentage compares to other public pension systems across the nation. My understanding is that payment of a public pension system’s “ARC” is critical to the long-term sustainability of a public pension system.

A retiree organization has drawn attention to the following statements of current and former Colorado PERA leaders lamenting the underfunding (failure to pay the ARC) of the PERA pension system.

On August 11, 2009, at the Denver meeting of the Colorado PERA “Listening Tour” Colorado PERA’s (then) General Counsel Greg Smith commented on the decline of PERA’s actuarial funded ratio: “We have not been paid what’s called the actuarially required contribution.” “We’ve not been receiving that full contribution in any of our divisions for many years . . . seven years to be specific.”

Link: http://www.copera.org/pera/about/listeningtour.htm

On February 23, 2012 (then) Colorado PERA General Manager Meredith Williams, before the Colorado House Finance Committee, testified relating to the Legislature’s historical underfunding of its PERA pension obligations, i.e., the failure of the Legislature to ensure payment of the ARC through appropriate statutory contribution rates, or supplemental appropriations. Colorado PERA General Manager Meredith Williams: “We’ve had a significant problem over the years, in that . . . contributions, payments by (PERA) employers into PERA have been kind of the last thing in the budget building process, and we have not made the required payments. Unfortunately, in our line of work, where we’re involved in compounding shortfalls grow, particularly when the shortfalls continue year after year after year.”

Since most Colorado state and local government employees are ineligible to receive Social Security benefits in retirement, they rely on the appropriate financial management of the Colorado PERA pension system to avoid poverty after giving a lifetime of service to the public. I would very much appreciate your help in gathering information regarding the historical Colorado PERA ARC payments.

Sincerely,"

This letter is just seven paragraphs long. It is not difficult to read these seven paragraphs and see that Greg Smith has made a false statement in a JBC budget hearing. The letter makes no mention of PERA employers failing to pay statutory pension contributions. This letter simply points out that the Colorado Legislature is failing to pay the PERA pension system ARC. Greg Smith's red herring is a transparent manipulation of state legislators and the Colorado budgetary process by a state agency head.

As noted above, unfortunately, Colorado legislators forwarded this letter to the staff of the State Legislative Counsel which, rather than conducting the requested ARC statistical research for PERA retirees, acted as a conduit for a Colorado PERA political response.

As evidenced by the letter above, Colorado PERA retirees requested that the Legislative Counsel (or the Office of the State Economist) examine the payment of the PERA pension system ARC historically, and provide a comparison of "ARC funding discipline" among major US public pension systems. Colorado PERA administrators ignored the requested statistics and instead, sent legislators and retirees a political statement.

Below is a link to a PERA retiree response to PERA's refusal to provide the requested statistical information. This response was subsequently sent to all Colorado state legislators:

http://coloradopols.com/diary/65975/the-colorado-legislatures-chronic-underfunding-of-the-colorado-pera-pension-system

Greg Smith at 2/11/40 on the recording of the JBC agency hearing:

"We pride ourselves in our transparency." (My response: Indeed, Colorado PERA administrators "transparently" quashed the JBC's question set #22.)

Greg Smith at 2/21/23:

"We're interested in everybody understanding the facts about PERA."

Greg Smith at 2/21/04:

"GASB is eliminating that provision (the ARC calculation), as a part of the adoption and the effective dates of 67 and 68. The ARC will no longer be a component of GASB's requirements."

(My comment: Of course, the fact that GASB is changing its emphasis from ARC funding discipline to plain statements of pension liabilities on public sector employer balance sheets DOES NOT EXCUSE the failure to pay the PERA pension ARC for the previous twelve years.

This Greg Smith statement also ignores that fact that, as noted earlier, nearly all organizations representing public sector entities in the United States recommend a continuation of public pension calculation of an annual "actuarially determined contribution," with implementation of the new GASB rules.

National Association of State Retirement Administrators:

"Of note, our associations recommend that state and local governments continue to calculate an actuarially determined annual required contribution (ARC). For those who do, GASB’s new standards will require governments to provide supplementary information regarding their actuarially determined pension contribution, the history of their funding commitment in relation to this amount, and underlying assumptions regarding this calculation and other factors that materially affect the trends in financial reporting schedules."

http://www.nasra.org/Files/Letters/Joint%20Letter%20to%20Commissioner%20Gallagher%206-16-14%20%282%29.pdf

Note that, at its 2014 legislative session, the Tennessee Legislature enacted a bill requiring payment of their public pension system ARC each year. (Some states, recently Alaska, have supplemented statutory contribution rates to pay off their public pension liabilities.)

See the articles:

http://coloradopols.com/diary/58527/tennessee-legislature-models-responsible-public-pension-management-for-colorado-pera-and-the-colorado-legislature

http://coloradopols.com/diary/65975/the-colorado-legislatures-chronic-underfunding-of-the-colorado-pera-pension-system

"When government entities fail to pay annual required contributions, not only do they jeopardize the actuarial soundness of the funds, but they also put pension plan trustees in a precarious position. Have plan trustees breached their fiduciary duty when they do not take action to try to collect a contribution underpayment? In other words, does fiduciary duty obligate the plan trustee to take action to try to compel a government entity to pay its required contribution? If the answer to this question is 'yes,' what actions are required? Are they required to bring legal action against the government sponsors to collect the required contributions, or is simply sending a demand letter sufficient to satisfy the obligation? The ultimate answer may be largely determined by state law and whether the obligation to pay the ARC derives from the state constitution, statute or a matter of contract law between the government sponsor and the pension fund. To date, this issue has not been addressed by a court, but it may only be a matter of time."

http://www.bgdlegal.com/news/2011/04/29/articles/are-public-pension-plan-trustees-at-risk-for-fiduciary-liability-when-public-plans-are-underfunded/

"Does Your Pension Board Need Help Meeting Its Fiduciary Liability? – Create a Funding Policy."

http://www.publicpensioninstitute.org/public/10292print.cfm

THE POWER OF COLORADO PERA'S LOBBYISTS.

Historically, Colorado PERA has purchased a substantial lobbying presence at the Colorado Legislature with PERA Trust Fund assets. See the article: "Colorado State Senators Jump for Angry Colorado PERA Attorneys." at this link:

http://coloradopols.com/diary/36778/colorado-state-senators-jump-for-angry-colorado-pera-attorneys

The influence of Colorado PERA's internal and external lobbying force was revealed during Senate floor debate on SB10-001 in 2010. This is the bill that struck Colorado PERA pensioner contractual rights to the statutory "annual benefit increase" (COLA.)

During floor debate of SB10-001, Senator Scott Renfroe: "IF YOU WANT IT TO GO OUT OF HERE (THE SENATE) WITH THE PERA APPROVED DOCUMENT."

The Colorado Senate took up SB10-001 on two occasions; “Second Reading” on January 29, 2010, and “Third Reading” on February 1, 2010.

On “Second Reading,” a member of the Senate, Senator King, tried to amend the bill to provide that Colorado law would permit the breach of its public pension contracts if a financial condition called “actuarial necessity” could be established. The King amendment also stated that the Colorado Legislature could not break the contracts of Colorado PERA members who had already fulfilled all of the conditions of their pension contract and retired. This amendment proposed by Senator King was voted down.

Next up, Senator Renfroe proposed an amendment to SB10-001 on “Second Reading,” stating that if the Legislature intends to break its public pension contracts it must provide notice of the breach to the parties to the contract, i.e., PERA members. The Renfroe amendment also precluded the Colorado Legislature from breaking the contracts of Colorado PERA members who had already fulfilled all of the conditions of their PERA pension contracts and retired. This Renfroe amendment was passed by the full Senate on “Second Reading” and became part of SB10-001.

A few days went by before Colorado PERA officials realized that Senator Renfroe’s “Second Reading” amendment to SB10-001 would prevent their taking of PERA retiree’s contracted pension COLA benefits (which represented 90 percent of the cost-shift in the bill, according to the bill’s prime sponsors, Senator Penry and Senator Shaffer, as well as Colorado PERA.)  Apparently, the fact that some Colorado Senators had failed to march in lock-step with Colorado PERA's orders resulted in raised tempers . . . and a decision to fix the Renfroe “Second Reading” amendment on the Senate floor on February 1, 2010 when the bill was to be heard by the Senate on “Third Reading.”

This effort to “fix” Senator Renfroe’s amendment makes for some of the most interesting action from the Colorado General Assembly’s debate of SB10-001. You can watch the Senate’s “Third Reading” debate on SB10-001 on the Colorado Channel here:

http://www.coloradochannel.net/colorado-senate-2010-legislative-day-20

(Click on “SB10-001” on the right of the screen.)

On “Third Reading,” the members of the Colorado Senate disagreed about whether or not Colorado PERA members should be told of their contractual rights to their pension benefits.  Colorado PERA’s attorneys in the lobby grew angry. The members realized that the presence of the Renfroe amendment in SB10-001was a tacit admission by the Legislature that it could not impair fully-vested, accrued, contracted PERA pension COLA benefits.

Listening to the floor debate of SB10-001 it’s clear to me, that PERA’s attorneys were running the show.

Here are transcribed highlights from the February 1, 2010 Senate “Third Reading” floor debate on Senator Renfroe’s amendment (that was placed in the bill two days earlier on “Second Reading”):

Senator John Morse stated:

“I ask permission for a Third Reading amendment.”

“Members, we put an amendment on the tail end of Second Reading and it turns out that that amendment had the effect of undoing the bill.”

Senator Renfroe stated:

“I think it’s an amendment we still need to keep in there, but modify the language to make the attorneys happy as opposed to just deleting it out.”

“I’m standing before you to tell you that I did not have ulterior motives, with this as has been suggested and that angers me to no end that I would receive phone calls from members and from the press about that.”

“Now, if the attorneys outside don’t like what we did, well then let’s fix it and let’s include it and go down the road.”

“I have another Third Reading amendment that would put my language back in without striking out the language that made the attorney or attorneys, or whoever it is, angry with what it was.”

Senator Harvey stated:

“The only thing we did compromise was on this amendment . . . that we would say that we would notify the (PERA) members of what their rights are.”

“Now we’re coming back two days later and saying ‘no’ we can’t even offer that amendment to tell the (PERA) members what their rights are.”

“If we can’t fix that technical issue and compromise in telling the (PERA) members just what their rights are, then we’ve got a more serious problem in this body than simple technical amendments on Third Reading.”

Senator Mitchell, (admits that Senator Renfroe’s language in the bill precludes the General Assembly from modifying fully-vested PERA retiree pension benefits):

“My understanding then is that Senator Renfroe offered an amendment that provided for notice to all PERA-covered employees of their rights under the changing programs, and that amendment was adopted by this body.” 

“A unanimous vote by this body to give notice to PERA members of their rights . . . that sounds like a worthwhile and good government policy.”

“Now, we learn this morning that there were some unintended consequences, and mistaken overreach in the amendment that would have the effect of gutting the bill. Well, some of us might think that is a good thing.”

Senator Renfroe, (makes it clear that Senator Morse’s amendment to replace the Renfroe language currently in the bill is actually being offered by PERA’s attorneys in the lobby):

“Or, if you want it to go out of here with the PERA-approved document and nothing else then let’s just approve this one and vote mine down.”

Senator Penry, co-prime sponsor of SB10-001, (makes it clear that the Renfroe amendment currently in SB10-001 would preclude the General Assembly’s retroactive taking of PERA COLA benefits):

“And to be clear what we’re talking about it’s the COLA, the COLA reduction which represents $15 billion of the $30 billion shortfall in this proposal is what was stripped out as part of that (Renfroe) amendment.”

The Senate then broke for a “Senatorial Five” in order that continued discussion of the contractual rights of Colorado PERA members not become part of the official Senate record.

After the powwow, Senator Morse has abruptly changed his mind. He now supports the Renfroe amendment.

Senator Morse withdraws his own (PERA-sponsored) amendment and asks for the Senate’s support for the Renfroe amendment that puts into Colorado law the language about “actuarial necessity” that is in the final version of SB10-001, (Floor Amendment #41).

Senator Renfroe’s amendment was adopted.

This Senate “Third Reading” debate on SB10-001 makes it clear that the members of the Senate knew that they were breaking fully-vested Colorado public pension ABI contracts. The “Third Reading” debate on SB10-001 also makes it clear that the members of the Senate have abdicated their public policy-making authority regarding Colorado public pensions to Colorado PERA attorneys in the lobby.

The Senate’s “Second Reading” debate on SB10-001 on January 29, 2010 is also quite interesting. During this SB10-001 “Second Reading” debate we hear members of the Colorado Senate declare that the Colorado General Assembly’s proposed taking of the PERA COLA contracted benefit is unconstitutional.  Now, for some reason, the Senate’s “Second Reading” debate on SB10-001 has disappeared from the Colorado Channel archives.  (If you click on “SB10-001” for Legislative Day 17 [January 29, 2010] in the Colorado Channel archives you get this error message: “Video not found.”)  Does someone not want public access to the SB10-001 “Second Reading” debate on SB 10-001?

Fortunately, I have preserved pertinent comments from the January 29, 2010, Senate “Second Reading” debate on SB10-001. Here are a few:

Senator Harvey, “We have made a commitment. We have a contract with current retirees. That is already in place.” “Reforms should be made for new hires.” “We do not have that commitment to new hires.”

Senator Spence, “The bill places an unfair burden on retirees.”

Senator Scheffel, “We are breaching our promises to existing retirees.”

Senator Lundberg, “This bill is a deal that was cut before this body met.”

It is ironic that, during floor debate of SB10-001, the Colorado Senate debated the concept of "actuarial necessity" which Colorado PERA and the sponsors of SB10-001 believed was necessary for the state to escape the PERA COLA contractual obligation to PERA pensioners. The irony is found in the fact that, later in the litigation of the case Justus v. State, Colorado PERA switched its legal strategy, from arguing that "actuarial necessity" was necessary to break the PERA COLA contract, to arguing that the PERA COLA contract did not exist. [Of course, as noted above, PERA's lawyers had already testified to the JBC in 2009 that the PERA COLA contract did indeed exist.])

During the debate on SB10-001 there was universal guarded speech on the floor of the Senate and much tiptoeing around the subject of Colorado PERA retiree vested pension rights. The Senators were concerned about accidently providing too much evidence for Colorado courts that they were aware of the contractual nature of the PERA COLA benefit. But, it turns out that the Senators' fears were unfounded. The Colorado Supreme Court had no intention of examining evidence in the case, Justus v. State, and did not examine the evidence. Such an examination of  evidence in the case would have interfered with the desired political resolution of the case.

Longstanding Colorado case law has deemed fully-vested public pension contracts inviolate. (An earlier Colorado Supreme Court concluded in McPhail: “ . . .we believe that in a case, such as that before us, involving a contributory system it is the only reasonable conclusion that can be reached (the contract principle.)”  “It would be unjust and contrary to our basic notions concerning the validity of contracts to hold that this provision could be changed by the lawmakers.”  Colorado courts have historically adhered to the "California Rule" of public pension contractual rights.

The final language of the Renfroe “Third Reading” amendment to SB10-001 (that is now part of Colorado law) requires that written notice be provided to Colorado PERA members and inactive members that in the event of "actuarial necessity," the Colorado General Assembly is free to break its public pension contracts.

Colorado PERA's gamesmanship during the 2014 Joint Budget Committee PERA hearings are simply a continuation of its historical manipulation of Colorado state legislators to conceal the underfunding of the PERA pension, and a premeditated breach of Colorado PERA pension ABI statutory contracts. This is all very ugly, and a sad statement about the reality of our Colorado state government.

Colorado, the tenth wealthiest state in the nation, is allegedly forced to break its contracts with public pensioners.

"Gov. John Hickenlooper's economists predict, however, that the state needs to refund $196.8 million (TABOR refund to taxpayers) next year because of revenue increases in the current budget year. Lawmakers weren't expecting refunds until the 2016 tax year, and Hickenlooper's budget request sets aside nearly $137 million for those."

http://www.bnd.com/2014/12/22/3575777_lawmakers-getting-briefing-on.html?sp=/99/102/&rh=1

The fact is that many Colorado state legislators have desired to use state funds (that should be directed to meeting state contractual obligations) for other purposes. These legislators are willing to go to great lengths to achieve that goal. Our Colorado Legislature has lacked statesmen who will speak the truth and inform Colorado voters that the Legislature cannot break its existing contracts to accommodate TABOR. We lack elected officials who will honestly inform Colorado voters that either TABOR must be modified, or state services must be further diminished. We lack leaders who will inform Colorado voters that our Legislature will no longer continue the charade of borrowing from the PERA pension system, and from future generations, to maintain state services in the present.

Support the Rule of Law in Colorado at saveperacola.com.

Top 10 Stories of 2014: Colorado’s Two-Headed Electorate (#10)

How many fingers am I holding up?

Today we kick off our annual list of the "Top 10 Stories of the Year" in Colorado politics. We start, appropriately, with #10: Colorado's Two-Headed Electorate.

—-

The 2014 Election was unlike the 2012 Election in Colorado.

You don’t need to be a rocket surgeon to have come to that conclusion, but the 2014 Election did indeed confirm a suspicion that arose following the results of 2012: There are two distinct electorates in Colorado.

In 2010 and 2014, Colorado experienced similar results to states around the country as part of a Republican “wave” election (though you can argue that 2014 wasn’t really a wave year, but that’s another subject for another time). In fact, Colorado post-election 2014 looks incredibly similar if not for the collapse of Republican Ken Buck’s Senate campaign in the closing weeks of 2010. This might be understandable as a trend if we ignored Presidential election years, but there’s no question that Democrats were stronger at the polls in 2008 and 2012.

It is not a groundbreaking theory to suggest that Colorado has two different electorates that vary from Presidential to mid-term election years, but in 2014 we saw the extension of a very distinct pattern in Colorado that dates back to President Barack Obama’s election in 2008. Perhaps this pattern will break in 2016 with a different group of Presidential candidates, or perhaps this is a new modern reality in American politics. Everything we’ve seen suggests the latter. Here's why:

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Lawsuits could illuminate if top Republicans knew of GOP-funded anti-Tancredo campaign

(Promoted by Colorado Pols)

tancgov

During this year’s GOP primary, top Colorado Republicans, including Colorado GOP Chair Ryan Call and Attorney General John Suthers, claimed to have no knowledge of a GOP-funded campaign attacking Republican candidates Tom Tancredo.

Matt Arnold, who runs Campaign Integrity Watchdog, has a hard time believing this, and he thinks two campaign-finance lawsuits he’s filed have a chance, even if it's a bit of a long shot, of  clarifying things. See them by clicking on “Complaint Search” here and typing “Campaign Integrity Watchdog” in the “organization” line.

Arnold’s legal action follows up on revelations in July that the Republican Governors Association (RGA) funneled money through the Republican Attorneys General Association (RAGA) to attack GOP gubernatorial candidate Tom Tancredo.

One of Arnold’s complaints alleges that Colorado Campaign for Jobs and Opportunity, a state campaign committee, violated campaign finance laws by listing contributions from Campaign for Jobs and Opportunity, a federal superpac that received money from RAGA, as in-kind expenditures.  And the federal Campaign for Jobs and Opportunity also failed to make any disclosure when it contributed to Colorado Campaign for Jobs and Opportunity, as required by state law, according to Arnold.

Another complaint alleges that the Colorado Republican Party Independent Expenditure Committee (CORE) did not report its website’s attack ads against Democrats during the final 60 days of the last election.

Arnold also alleges in this complaint that CORE illegally “coordinated fundraising activities (contributions), expenditures, and electioneering communications with one or more candidate committees”—opening up a legal process that could illuminate who knew about the anti-Tancredo campaign.

“Through ignorance or not caring, Ryan Call set up his donors to take a fall,” said Arnold, who is not known to defend Democrats very often and normally espouses conservative causes, like Clear the Bench.

"To me, it’s not about partisan politics,” said Arnold. “It’s about integrity. The political class is more interested in making themselves look good than in doing the right thing.”

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Discuss: Cyberwar, North Korea, Sony’s “Interview” Fiasco

(Hackers suck – promoted by Colorado Pols)

"The Interview" was not a great movie. It appears to have been a fantasy ammosexual buddy movie, aimed at those panting, sweaty hordes who know what real he-man American foreign policy should be if that wuss Obama were not in charge.  By Golly, North Korea would be sorry they went in the wrong mom's basement, futhermucker.

That said, the swift withdrawal of the movie from scheduled Christmas theatre showings, in the total and complete capitulation of Sony pictures to the hacking of its servers, sets a chilling precedent for free speech.

Why did Sony make the movie in the first place? How would we react if a rival nuclear power attempted a holiday film about assassinating our President?  Domestic white hate groups fantasize about this constantly, but usually not on widely distributed video. I have to think that a foreign, say, Bollywood, blockbuster on this topic would not be kindly received.

What were they thinking? Did Sony get what they deserved? Should we mourn that we will not see "The Interview" while Kim Jong Un is in charge? Did they do the right thing in cancelling all showings?

Here's a link to Ari Melber and Lawrence O'Donnell's discussion on MSNBC if you need background.

Most of youtube is also chilled – Hardly a trailer to be seen. ..all are now "private". Over-reaction much? I haven't seen mass freakout like this since 9/11.

Discuss.

 

 

Associated Press Expands State Government Reporting

Good news here in Colorado and around the country: The Associated Press is beefing up its state government reporting. From "The Definitive Source," the AP news blog:

Building on The Associated Press’ unmatched presence in all 50 U.S. statehouses, we are adding to our competitive advantage by creating a team of state government specialists.

As announced today to the AP staff, the specialists will collaborate with statehouse reporters, as well as on their own projects and stories focused on government accountability and strong explanatory reporting. Their over-arching goal will be “to show how state government is impacting the lives of people across the country,” said Brian Carovillano, managing editor for U.S. news.

Here's how Carovillano explains what this means in terms of how state government is covered by the AP:

Let’s say there’s a trend emerging from several statehouses that our folks on the ground identify. The state government team will work with reporters in those states — and with the data team, if necessary — to bring depth and a national perspective to that issue and show how it’s playing out across the country.

They’ll be a resource to our statehouse reporters looking for help broadening the scope of their reporting, and a projects team that will partner with folks in the states to pursue bigger and more ambitious enterprise on the business of state government. And the focus really needs to be on how that impacts peoples’ lives. We don’t cover state government for the state government; we cover it for all the people of the state. The message here is that state government coverage is essential to AP and its members, and we are doubling down on that commitment, which should benefit the entire cooperative. [Pols emphasis]

This is good news all around, but particularly in states such as Colorado where the number of reporters covering the state legislature alone has dwindled to just a handful of people in the last 5 years. As we've seen in the aftermath of the demise of the Rocky Mountain News, there are fewer and fewer reporters able to focus on state government stories that really do affect a majority of Coloradans — whether they realize it or not. Robust reporting is crucial to maintaining good government and keeping a watchful eye on our elected and appointed officials.

Expert Analysis: What Happened in Colorado in 2014?

The good folks at Hilltop Public Solutions, one of the leading Democratic-aligned political consultant firms in Colorado with offices across the nation, have put together a fascinating presentation analyzing the results of the 2014 elections in Colorado. We had the opportunity to view their presentation this week, and obtained permission to use their slides and data in a post. We doubt we can explain in a blog post as well as Craig Hughes and team can tell the story, but we'll try to give readers a sense of their conclusions. This is largely a data-driven explanation, but to be clear, it does come primarily from the perspective of Democrats.

Hilltop-Public-Solutions-2014-Election-Results-Analysis-2

This slide dispels one of the major misconceptions about the 2014 elections. The fact is, Democrats turned out the votes they believed were necessary to win in Colorado, and did so in greater numbers than they had in the last midterm election in 2010. What Democrats didn't count on was a national political climate that Colorado has slowly caught up with in the years since President Barack Obama's election. In 2010, Democrat Michael Bennet won substantially more right-leaning independents and even Republican votes than Mark Udall did in 2014. Combine that with the sudden erosion of support for Democrats in formerly reliable blue areas of the state–Pueblo and Adams County–and you can account for much of the difference between Bennet's narrow win and Udall's narrow defeat.

Hilltop-Public-Solutions-2014-Election-Results-Analysis-3 Hilltop-Public-Solutions-2014-Election-Results-Analysis-4 Hilltop-Public-Solutions-2014-Election-Results-Analysis-5 Hilltop-Public-Solutions-2014-Election-Results-Analysis-7

What you can see in these slides is analysis of the "surge" vote in 2014 midterms–voters who did not vote in the last 2010 midterms elections but did this year. As you can see, Democrats performed well among these lower-propensity voters, and it wasn't really what you'd call a "Republican wave" at all. But it wasn't enough to overcome the large Republican base in Colorado, which was much more unified behind Cory Gardner than the GOP was united behind Ken Buck in 2010.

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For 2015 Colorado Must Resolve to Protect the Sage Grouse

(Promoted by Colorado Pols)

The State Department of Natural Resources, people that care about the Greater sage grouse, and those that care about whether the bird is listed under the Endangered Species Act (including those that prefer it isn’t) need to all get together quickly.  Delay is not our friend.  Colorado needs to resolve to act now to protect the Greater sage grouse.

Some claim that a listing by the federal Fish and Wildlife Service would be heavy-handed yet cheer that Congress pulled a ham-handed move of its own, telling the US Fish and Wildlife Service scientists they cannot spend  money to consider the plight of this magnificent species.  Not only is the sage grouse caught between–but so are those that want to see meaningful action to protect the bird.  And action is what is needed.

Because the clock is ticking, not only quite literally for the sage grouse—which has seen its population plummet as its habitat has disappeared over the last few decades—but  also on the federal government’s decision to list the bird or not under the ESA. That’s because the agency that enforces that law is under a court order to make a decision by September 2015, which is just about the time the Continuing Resolution  and  spending bill (the so-called CRomnibus) expires and with it Congress’ defunding gimmick.  As Senator Bennet (D-CO) noted in a release:

“Colorado communities continue to make a strong, science-based case that local conservation efforts are working, can continue to get better and these birds don’t need protection under the Endangered Species Act. However, thanks to this rider, Colorado communities will now be plagued with uncertainty through at least next September. Despite this ill-advised Congressional involvement, Colorado communities and the agencies will continue to work on their collaborative and locally-based conservation approaches to protect the birds and avoid future listings. They should ignore the confusing signals being sent by politicians in Washington and continue to focus on their impressive work on the ground to come together to work for a long term solution,”

In fact the Secretary of the Interior and the Director of the US Fish and Wildlife Service within that department both say a listing can still be avoided.  The catch is the eleven states where the Greater sage grouse occurs, including Colorado, have to get plans in place that provide real protection for this species.  But time is wasting. So rather than passing midnight partisan riders or filing a lawsuit after the fact, a better move might be to avoid the situation in the first place, in this case by putting a strong and protective habitat management plan in place for the Greater sage grouse.  As Sally Jewell, the U.S. Secretary of Interior, put it (from PoliticoPro, a subscription service):

“It’s disappointing that some members of Congress are more interested in political posturing than finding solutions to conserve the sagebrush landscape and the Western way of life,” Jewell added. “Rather than helping the communities they profess to benefit, these members will only create uncertainty, encourage conflict and undermine the unprecedented progress that is happening throughout the West.”

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Owen Hill Has a Different Story for You (and Cory Gardner)

Rewriting History with Owen Hill

In 2014, Owen Hill won the U.S. Senate race but then decided to let Cory Gardner have it instead.

We were recently forwarded an email that State Sen. Owen Hill sent to supporters this week, and we must admit to being impressed; when it comes to self-promotional nonsense messaging that ignores history, Hill is a true talent.

Hill spends most of his email discussing Republican victories in the 2014 election, though he adds unnecessarily, "The election results were not what I set out to achieve personally…" You may recall that Hill was a candidate for the U.S. Senate before Republican Rep. Cory Gardner kicked his ball over the fence and told him to go home. Here's how Hill prefers that you remember the events of March 2014:

When I stepped out of the Senate race in March, I was vocal about the importance of working together as a Republican team. Representative Cory Gardner was the right person for the Senate race this year, and Colorado is better for it.

Hill was most definitely not excited to see Gardner enter the race for Senate last spring, telling reporters that he was "pressured" to drop out of the race. As the Colorado Springs Gazette reported in March:

Hill said Gardner came to him weeks ago and pressured him to drop out of the race. '

'It's party leadership trying to decide who gets to run," Hill said…

"This is the exact same corruption and back-room deals that have caused the Republican party to lose elections year after year," Hill said. [Pols emphasis]

Even after Gardner had entered the race for Senate, the national Tea Party Express made it clear that they were still backing Hill. While Gardner probably would have had little trouble dispatching Hill in a Republican Primary, a contested GOP Primary would have significantly complicated Gardner's backtracking on issues such as Personhood. Gardner's surprise flip-flop on support for Personhood occurred just a few weeks after he announced his bid for the Senate…but more tellingly, just a few days after Hill finally backed out of the race.

If Gardner had to face a June Primary against Hill (or anyone else, for that matter), he probably could never have dropped his support for Personhood; it may not have cost Gardner the GOP nomination for Senate, but it certainly would have made it considerably more difficult to maintain the backing of that portion of the Republican base that keeps abortion issues first and foremost in their minds. Even a small erosion of support from that base could have been enough for Democratic Sen. Mark Udall to hold his seat.

Now that Gardner has been elected to the U.S. Senate, Hill has to be careful to un-burn any bridges while still promoting himself as a potential rising star in the Republican Party. Hence this paragraph:

While I am excited for Senator-elect Gardner's political future, I am also encouraged to continue to play a key role in Colorado politics as the Chairman of the Senate Education Committee. I am excited to be working in a realm that has such tangible effects on our children's futures. Here is one article published about me that was encouraging.

We left the link in place in the paragraph above because it is a perfect example of everything that Hill is trying to accomplish in his own re-branding. Check out the date on the link — it's from a CBS4 story on March 20, 2014.

Gessler’s Anti-Mail Ballot Talking Points Grow Awfully Thin

Scott Gessler.

Scott Gessler.

Reid Wilson writes at the Washington Post today about the differing experiences of states that have switched to mail ballots. Two states, Washington state and Colorado, both have Republican Secretaries of State. In Washington, Secretary of State Kim Wyman says the switch to mail balloting has been highly successful. After the state allowed mail ballots in the 1990s, it emerged as by far the most popular–and cost effective–option.

But here in Colorado, outgoing Republican Secretary of State Scott Gessler is duty bound to disparage mail ballots as he has since the legislation broadening their use passed in 2013–and no positive experience can shake him.

To Gessler, whose state only began conducting elections entirely by mail this year, the system creates the potential for what he calls a “single point of failure” — the U.S. Postal Service.

“The Postal Service is cutting back service for cost-cutting measures,” Gessler said. “You’re seeing some disenfranchisement of voters where the post office is just so slow.”

“I think more people are disenfranchised through all-mail ballots because of the post office than anything else in the country,” he said.

Richard Coolidge, a spokesman for Gessler’s office, said the secretary of state worked overtime to collect mail from the central processing facility in Denver to meet the Election Day deadline. They found 366 ballots that would have otherwise been thrown out for arriving too late.

We have no doubt that some number of voters disregarded the deadline to mail in ballots that was clearly indicated on every ballot as well as other election-related correspondence. Even factoring that inevitable issue, it's just silly to claim that the Postal Service is a "single point of failure" in Colorado elections. For one thing, a large percentage of "mail ballots" aren't mailed back to clerks at all, but dropped off at ballot collection boxes. Counties are apparently not required to track the percentage of ballots returned by postal mail as opposed to being dropped off directly but we've heard in Denver the percentage may be 70% or more deposited in drop boxes. Beyond that, there are other options available, like early voting and vote centers, that make this "single point of failure" business just plain silly.

But the best evidence that Gessler is off base with his ongoing complaints about mail ballots are the results of this year's elections. Neither mail balloting, nor other new election provisions Gessler complains about like same-day voter registration, prevented Republicans from having a pretty good election in Colorado in 2014. There is no evidence that Colorado's updated election laws resulted in anything other than better turnout in a midterm election that nationwide saw the worst turnout since the 1940s. Republicans won the U.S. Senate race, dominated the downticket statewide races except Bob Beauprez's gubernatorial defeat, and made Democrats work for legislative races all over the state. What about this experience speaks badly of Colorado's new election laws, which happen to have been passed by Democrats?

Democrats are bruised from this year's election results, but one thing we can all say for sure today is that Gessler's wild predictions of fraud and chaos as a result of House Bill 13-1303 were totally unfounded. Next year, when new Secretary of State Wayne Williams tries to claim otherwise, hopefully someone reminds him that he won his election in 2014 comfortably too.

Auctioning Access: You Think This Was a Bad Idea? Maybe?

AG-elect Cynthia Coffman.

AG-elect Cynthia Coffman.

Associated Press reports–oops!

A Colorado business group on Tuesday said it would back out of a lunch with the state's new attorney general after questions were raised about it winning the meal at an auction.

The Colorado Automobile Dealers Association won the lunch with Cynthia Coffman after bidding $500 at an auction at the Colorado Lincoln Club's holiday gathering, which it hosted at its Denver offices last week. On Tuesday, however, association president Tim Jackson said he would give the lunch away to another organization or person. He said the group bid on the meal solely to help out the Lincoln Club and did not need special access to Coffman, a Republican…

The auctioning of access to Attorney General-elect Cynthia Coffman by the GOP-aligned Lincoln Club of Colorado's annual holiday party was originally reported last week by the Colorado Statesman's Ernest Luning. And Luning reports that Cynthia Coffman was not the only Republican politician selling off personal access at this party:

The top bids went for lunch with State Treasurer Walker Stapleton after two competing consortiums, led by former Secretary of State Mary Estill Buchanan and Lincoln Club board member Barb Piper ramped bidding up to $725 for the honor, at which point Wiens and Stapleton decided he’d have lunch with each group for that sum…

The club also auctioned off lunches with state Sen.-elect Tim Neville, R-Littleton, and state Rep.-elect Kit Roupe, R-Colorado Springs, who was joined by neighboring state Rep.-elect Gordon Klingenschmitt, R-Colorado Springs, to sweeten the deal. State Rep.-elect Jon Keyser, R-Evergreen, was called away on duty with the Air Force Reserves so was unable to take part in a planned live auction, though lunch with the new lawmaker was sold in the silent auction.

As for Tim Jackson and the Colorado Automobile Dealers Association, according to Luning he did have an agenda for his lunch with AG-elect Coffman, before the whole idea of it became…well, you know, scandalous:

Jackson told The Colorado Statesman that he plans to take the opportunity to discuss the importance of automobile dealerships with Coffman, part of a continuous outreach effort with policy-makers and elected leaders. A full 20 percent of the state’s sales tax revenue is generated from the sale of new and used cars, Jackson noted…

Well now! That would have been rather productive lunch after all. Of course, no one is alleging that the Republicans who auctioned access to themselves to the highest bidder did so for personal financial gain. But just so everybody's clear about what the Lincoln Club is, from their own "About Us" page:

The Lincoln Club of Colorado is Colorado's oldest Republican Organization.  Based on the humanitarian principles of President Abraham Lincoln and founded in 1918, the club's mission has always been to promote the educational and social programs of the Republican party and to support the election of Republican candidates.

Bottom line: it may not be illegal, or even unprecedented, but the optics of lobbyists bidding for access to GOP politicians to fund a GOP campaign organization are about as bad as it gets–and CADA was wise to immediately cancel once word got out about it. If the other GOP politicians named in this story have any sense, they'll follow suit quickly.

Luis Toro, executive director of Colorado Ethics Watch, said he did not know if the meals were legal, but he said it was inherently questionable. "It is literally paying for access," he said. [Pols emphasis]

Next time, just hold an old-fashioned fundraiser.