Tuesday, October 14, 2014

Letter to Gibbsboro regarding professionals' enrollment in state pension

New Jersey Libertarian Party's
Open Government Advocacy Project
P.O. Box 5424
Somerset, NJ  08875
732-873-1251
paff@pobox.com

October 14, 2014

Hon. Edward G. Campbell, III, Mayor and Clerk Anne D. Levy
Borough of Gibbsboro
49 Kirkwood Rd
Gibbsboro, NJ  08026
(via e-mail only to mayor@gibbsborotownhall.com and gibbyclerk@comcast.net

Dear Mayor Campbell and Clerk Levy:

I write to you both on behalf of the New Jersey Libertarian Party's Open Government Advocacy Project because Clerk Levy serves as the "Certifying Officer" and Mayor Campbell serves as the "Certifying Officer's Supervisor."  This means that both of you, in accordance with N.J.S.A. 43:3C-5, periodically certify to the State which of Gibbsboro's employees are eligible for enrollment in New Jersey's Public Employees' Retirement System (PERS).  For your ready reference, I have placed your certification credentials here, which I recently received from Clerk Levy in response to a public records request.

Also in response to a recent records request, Clerk Levy provided me with a table that reflects which Gibbsboro employees you both deemed to be eligible for PERS enrollment for the third quarter 2014. That table is also on-line here for your ready reference.

The first thing that struck me was that Mayor Campbell himself is enrolled in PERS while none of the other members of the Borough Council are enrolled.  But, I subsequently researched the PERS Handbook (on-line here) and found that elected officials are eligible for enrollment if they were elected prior to July 1, 2007.  I believe that Mayor Campbell has been Mayor of Gibbsboro for at least that long, so I have no quibble with his enrollment.  (I include the fact of his enrollment in this letter, which I have made public, only so that those who review the table at the link above and question the mayor's enrollment will understand that it is permissible under PERS rules.)

Not so clear, however, is the PERS enrollment of Timothy Higgins and Charles Wiggington, who appear, respectively, to be Gibbsboro's municipal court prosecutor and public defender.  I note that the table shows that these two lawyers were enrolled in PERS but were "terminated" on August 30, 2014.

On-line here is the New Jersey's Office of the State Comptroller (OSC) July 17, 2012 report entitled "Improper Participation By Professional Service Providers In The State Pension System." According to this report, the PERS pension was intended for career employees who dedicate their careers to public service.  Despite this intention, various independent contractors, including appointed lawyers and engineers, have, over the years, enrolled in PERS even though they were ineligible.

To combat these improper enrollments, the Legislature enacted N.J.S.A. 43:15A-7.2 in 2007 which intended to get these freeloading professionals off the PERS rolls.  However, the report laments, the legislation has been largely unsuccessful because as of the report's writing in 2012
an overwhelming majority of surveyed local government entities failed to comply with the statutory  mandate to determine whether these professionals are independent contractors or employees. As  a result, they have failed to remove ineligible independent contractors from PERS. (Report, page 1).
The report gives examples of municipal court prosecutors and public defenders who the OSC found to be improperly enrolled in PERS.  Strikingly, the report, on page 11, mentions Gibbsboro's improper determination that its prosecutor and public defender were somehow "grand fathered" into the pension plan by virtue of their length of service:
Similarly, the Borough of Gibbsboro identified its municipal prosecutor and  public defender as professional service providers enrolled in PERS. The borough stated to us, in  relevant part, that these individuals have been in those positions since 2004 and 2006  respectively and “while they are appointed on a yearly basis, they are continuing employees.”  As discussed above, however, the law provides no such grand fathering exception. 
This raises a few questions regarding Higgins and Wiggington and Gibbsboro's treatment of their PERS enrollment:

1. Does the "terminated on August 30, 2014" entry on Gibbsboro's 3rd Quarter 2014 PERS table mean that Higgins and Wiggington were terminated from PERS enrollment effective August 30, 2014?

2. If so, why did Gibbsboro's Certifying Officer and Certifying Officer's Supervisor continue to keep them on the pension plan until 2014 when it appears that they should have been removed in 2008?

3. If I understand the matter correctly, Gibbsboro's delay in removing these enrollees is especially hard to understand since the OSC put the Borough on notice of this exact issue more than two years ago.

I do not profess to be an expert in PERS, or pensions in general so, for all I know, I may be suffering from a misunderstanding.  So, I invite either of you to call or write to correct my misunderstanding.  I have also submitted an additional Open Public Records Act request for more documentation.

Thank you for your attention to this matter.

Very truly yours,

John Paff, Chairman

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