Civics Lesson

I don’t think they teach civics anymore but if they did and were honest about it this example should be lesson one:

A major campaign donor wants to move along a project that will generate massive fees for them.  The project also has the advantages of already hooking suckers in Morris and Somerset counties and the justification is sufficiently obtuse to dissuade the board from formulating any skepticism in those who might be so inclined.  This video from three years ago is an object lesson for anyone looking to get money out of the county:

  • think up a politically correct scheme
  • sell it to people you have bribed to listen and decide in your favor
  • ignore anyone who sees a naked emperor (last 3 minutes)


Today this story came out:

In 2011, the county authority bonded $15.1 million, or about 70 percent of the cost to buy and install the solar panels, with Tioga paying the rest.

Williams said the solar systems generated low-cost power for the public buildings, resulting in a savings on energy costs.

School boards and municipalities paid Tioga for the electricity, and the company also received revenue from the sale of SRECs. Those funds were use to cover the county’s debt costs.

When Union County first contracted with Tioga to put solar panels on more than 25 buildings in 2011, SRECs were selling for $600 per certificate, according to an authority resolution passed earlier this month.

By spring 2013, the value had dropped to $120 per certificate, according to the authority. In May 2013, Tioga stopped making the full payments for the authority’s bonds and the authority declared Tioga in default, according to the authority’s resolution adopted earlier this month.

The authority filed for a $4 million guarantee that Tioga was required to pay under its contract with the county agency, the resolution states, but Tioga estimated it has about $1 million to pay the $25.7 million in claims from creditors, including the improvement authority.

Authority commissioners, in their resolution, told Executive Director Daniel Sullivan to seek at least $150,000 from Tioga, but Williams said Sullivan will seek more.

Of course they will seek more – to pay DeCotiis.  The cost of this project, as taken from Union County Improvement Authority bills paid, just topped $2 million:

  • DeCotiis, Fitzpatrick & Cole, LLP: $1,207,551
  • Birdsall: $475,097
  • Union County Allicance: $11,700
  • NW Financial: $7,425
  • Law Office of Brian Irion: $4,590
  • Well Fargo Bank, N.A.: $330,000

And what about those original suckers? They are in court which is where some representative concerned with Union County taxpayers should also be and this mess might well wind up in some court if DeCotiis can see a way to turn a profit off of suing themselves.

6 responses to this post.

  1. Posted by skip3house on April 18, 2014 at 10:13 am

    We need a new option on Vote Day, ‘None of the above’. And even an impartial mechanical way to create voting districts to erase gerrymandering that guarantees re-election of one party, and forces a minority into ‘condensed districts’ where their votes must be concentrated to just one party, rather than possibly being enough weight to change several outcomes.
    Got to disorganize enough to make large political donations worthless


  2. Posted by Pat on April 18, 2014 at 8:08 pm

    Hey John, an interesting perspective in the wall street journal that states that once all the changes in the NJ pension laws take effect, almost of the cost will be borne by the employees, and that the current crisis is due to the state not paying in the past. Any thoughts? Im sure this will go against toughloves too often stated claims of public employee extravagance paid by the taxpayers.


    • Posted by Tough Love on April 18, 2014 at 9:04 pm

      Busy now, but I will read it and get back to you later. In the meantime, if that is indeed correct, then you guys (all public Sector workers) would be MCUH better off and should jump at the chance if we say offered to contribute say 5% of your pay annually GUARANTEED.

      Are you game ?

      Have we got a deal ?


    • Thanks for the link and I might go into more detail later but the idea that employees “pay most of the cost” of accruing benefi8ts is dangerously wrong.

      First off, it is factually wrong based on official numbers. The 6/30/13 valuations show $1.93 billion in employee contributions as compared to $2.98 billion in employer contributions.

      Those contributions are supposed to cover both the annual accrual and the 30-year amortization cost of paying off the massive underfunding which is the much higher number.

      Perhaps Ms. Munnell is looking at the annual normal cost (using those absurd actuarial assumptions) and seeing how it is reduced by expected employee contributions by about 70% on average and draws her conclusion from that, however disingenuously.


    • Posted by Tough Love on April 19, 2014 at 1:04 am

      Pat, Wow, My opinion of author Alicia H. Munnell has dropped considerably after reading your linked article, notwithstanding her impressive credentials.

      The follow are my thoughts on that article as well as addressing the issues you raised:

      (1) Since Ms. Munnell is quoting an unfunded liability of $56 Billion, she is clearly using NJ’s “official” Plan figures and assumptions because under more appropriate assumptions (such as those now used by Moody in it’s analysis of creditworthiness) NJ’s unfunded liability is 2-3 times that figure. Her use of NJ’s “official” #s, and particularly, the assumptions that underlie them, as problematic, will be apparent later

      (2) In her 4-th paragraph she describes the 2010 pension changes applicable to NEW employees and then says …

      “Once new hires replace current employees, the annual pension cost for general employees will be about 9% of payroll, with the employee contributing 7.5%. The cost for teachers will be about 10% with an employee contribution of 7.5%. For police and fire, the cost will be about 20% with an employee contribution of 10%. These provisions mean that, based on the system’s assumed investment return, most employees will pay for the bulk of their pension benefits.”

      In the last sentence above, she appears to be arriving at that conclusion based on the formulas applicable to these “NEW” employees ignoring the fact that the savings will not materialize for many many years and those employed before the 2010 pension changes (many of whom will be working for 20-30 MORE years) remain under the old (higher) pension formula and provisions. Neglecting to point that out is far more than a minor omission for an academic. I would expect such from the Public Sector Unions, but not from an unbiased academic … so might she be biased?

      Next….. in my initial reading of the quoted paragraph above, I thought the 9% and 7.5% for general employees were additive to get Total Level Annual Plan cost (as a % of pay). but based on the last sentence in that paragraph, particularly the words …”most employees will pay for the bulk of their pension benefits.”, I now believe she was saying that for General employees the TOTAL Level Annual Plan cost is 9% and the (NEW) employees will be paying 7.5% of that 9%. Similarly, for teachers and Police/Fire, she seems to be saying that for the NEW employees the TOTAL Level Annual Plan costs will be 10% and 20% respectively.

      To put it mildly (as someone who understands the math behind pension funding very well .. although I do not pension valuations for a living) there is not a snowball’s chance in hell that even for new workers (with the reduced formulas and provisions) that the promised benefits can be fully funded over their working careers with such low total contributions under ANY reasonable set of assumptions. Doubling the 9%, 10% and 20% figures MIGHT be reasonable and then only if the COLAs are not reinstated.

      (3) Ms. Munnell goes on to correctly identify the main reason for the significant unfunded liability (little funding), but interestingly never mentions the retroactive pension increases granted in 2001 (yr ?) ……again, might she be biased ?

      (4) In her next-to-last paragraph, she says …

      “The option remains to cut future benefits for current workers. Such cuts also face legal hurdles, although Ohio and Rhode Island have overcome such hurdles. The argument against such a change is that New Jersey benefits for current employees are now significantly below the national average and employees pay most of the costs.

      That last sentence incrementally supports a claim that she is indeed biased ….

      First, she argues against cutting future benefits for current workers, by AGAIN stating that “employees pay most of the costs”. but that earlier conclusion (which I assert is erroneous) arose from analysis of the reduced formulas and provisions of the NEW (post 2010 pension reduction legislation) workers, but here she is using the same argument to justify not reducing FUTURE service pension accruals for the OLDER (Per-2010 legislation) CURRENT workers. She presented no justification for applying that argument to the higher pensions of the pre-2010 employees

      Second ,,…. she argues against cutting future benefits for current workers by saying that “New Jersey benefits for current employees are now significantly below the national average “. While a few States (e.g.,CA, NV) clearly provide greater pensions than NJ, of the MANY studies I have seen, I can recall not one that shows NJ Plan generosity to be “significantly below the national average”. Near the average, yes. Below the exact average, I don’t know. Significantly below the average, definitely not.
      While to be fair, her article is a “blog” article, not one written for a scholarly journal, but it would have been wise to include linked sources when making such bold claims. Without such proof, I do not believe that statement to be accurate.

      In any event …. again considering possibility of her being biased …. is the proper group against which the generosity of NJ’s Public Sector pensions should be measured, ONLY the pensions of other PUBLIC Sector workers? With Private Sector Taxpayer’s being “responsible” (even if foolishly deferring a significant share of their contributions to later years) for certainly well more than half of total Plan costs (notwithstanding Ms. Munnell’s claim to the contrary) I believe that it is far more appropriate to measure the generosity of NJ’s Pension Plans against the generosity of the pension Plans typically granted NJ ‘s PRIVATE Sector workers by their employers. What does she not (even briefly) mention this ?

      EVERY such comparison (using reasonable and appropriate assumptions) would show that the value at retirement of NJ’s PUBLIC Sector pension Plans are ALWAYS multiples greater than those of similarly situated (in pay, service years, and age at retirement) Private Sector workers.


  3. Posted by george on April 26, 2014 at 3:03 am

    You are just a conspiracy theorist like Cliven Bundy.

    Facts that disprove conspiracy theory about Harry Reid, Cliven Bundy and solar power

    See they got facts


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