The 2011 Union County audit is finally out and Note 15 on OPEBs is garbage*. I could go into detail on that item but instead, let’s examine the stakeholders that maintain this dysfunctional system of reporting liabilities: accountants, actuaries, rating agencies, municipal bond buyers, politicians, taxpayers, regulators, public employees. None have an interest in revealing the truth.
Accountants: Imbue a simple subject with jargon to make work for your profession leaving only ‘experts’ able to understand what the numbers really mean and everyone else to pretend to know.
Actuaries: Brown & Brown got $20,000 in 2009 for a rehash of the county plan and one spreadsheet that the county has been using ever since recasting projections as reality.
Rating Agencies: When Union County went into the bond market a rating agency reviewer asked about OPEB costs and got a one paragraph email with junk numbers. AAA+ rating came a few weeks later and two checks for $20,000 went to the rating agency shortly thereafter.
Municipal Bond Buyers: Assuming that taxpayers will always pay the tab, however high.
Politicians in Office: Who didn’t get where they are by asking questions of campaign donors.
Taxpayers: Seeing their jobs as done after casting their ignorant votes and expecting the puppets they anoint to watch out for them.
Local Finance Board: Rubber-stampers facilitating thefts through providing the appearance of regulation.
Public employees: If honest costs were reported to taxpayers would they really be getting those benefits?
Unfortunately that covers pretty much everybody. We’re all in on it.
* GASB rules forced Union County to do an OPEB valuation beginning in 2007 so they hired Brown & Brown for $20,000 for which they got a spreadsheet of projections that they have been using ever since reporting, for example, that they have $17,546,000 in assets as of 12/31/11 because that was what Brown & Brown projected there would be back in 2009 based on 2007 data. On that same page there is another line that asserts that the “the County has made provision from budget appropriations and has reserved on its balance sheet the amount of $6,518,450.49 for future OPERB obligations.” No explanation as to where that number came from. However, the one number that the county accountants didn’t pull off from the Brown & Brown spreadsheet was the Net OPEB Obligation (NOO) which was projected to be $140,895,000 as of 12/31/11 (of course not including the 2011 OPEB giveaway) but in the audit the NOO is defined as the one-year difference between what was projected to be the ARC and what was projected to be the OPEB cost for the year . Basically they could have picked up the page numbers from the Brown & Brown report and nobody would be the wiser.