Follow the Money

By Patrick Butler, professor of psychology  (1979-2009)

First, a quick review, for those new to the subject of the 47 million dollars in bonds sold by the SJECC District back in 2008. The DO managers pushed the unions to require all retired faculty and staff to qualify for Medicare after reaching the age of 65. Next, they dangled a 8% retroactive raise to the faculty union, then CTA, if they agreed to give up all retirement benefits to those hired after 1982. The dates for the three groups varied; the managers agreed first (surprise), the classified second and the faculty third. I held out as CTA president until September 7,1982 because we had won a suit bringing the ESL “classified” staff to certificated status and the start of the fall semester was after that date. It is interesting that the managers’ cut-off date was somehow moved to January 1,1983.

So the faculty hired after September 7,1982 had no medical benefits provided by the District when they retired and reached age 65. Remember, these medical benefits are only a supplement to the Medicare which all of those retired employees were required to obtain. From the time the staff agreed to their change, the costs of Medicare rose from $11 a month to a base of $165 now per month, Social Security is now taxed, and there are additional yearly payments of up to $6,500 per year for Medicare recipients with incomes over a base rate.

In 1998 the Board of Trustees formed an irrevocable trust that sold $47,000,000. in bonds just to pay the Medicare supplement for those retired staff who were hired before 1983. There was a Retirement Board of Authority (ROBA) who supposedly had control of the funds (I am a member appointed by the local AFT chapter) but we were forbidden from hiring or firing the three consultants who charged about $120,000. per year for servicing the fund. The estimated cost per year of the benefits paid are about $300,000. per year.

Back to the money trail, each month a representative from the three appointments by CFT, AFT and the three financial managers sign a warrant for the three consultants and, of the most important, a blank payment of about $225,000. per month. There is no break-down of what these monies are used for that is provided to the public or even to the RBOA members. The financial managers who are/were members of the RBOA as well as the interim chancellor have been asked repeatedly where the $2,750,000. are spent but there has been no answer. The consultants, who already take half of the amount paid out to the retired faculty, only say that they are not responsible for how the money is spent by the District Office managers.

Certainly, much of the remaining millions are used to pay off the $47 million in bonds issued in 2008. However, at that time, the amount we had to pay for bonds was at an all-time low so perhaps that cost is much less than the $2.75 million paid yearly to the District office. The DO managers have been asked repeatedly over several months by the AFT representatives as to how much of the monies were spent on bond interest vs “overhead”, but so far there has been no response. Why is there such a reluctance to answer these simple questions?

If our recent requests are also ignored, I will use the California Public Records Act to retrieve the information. Stay tuned.