Public boards have an important duty to manage their operations properly. They have an additional duty: to build public trust. The board for the Omaha Public Schools pension fund has unfortunately undermined that trust by approving $30,000 for travel for the board members and executive director.
The $30,000 sum is tiny compared with the OPS pension shortfall of $812 million, but the travel decision by the Omaha School Employees’ Retirement System has tremendous symbolic value for the public and for OPS staff members.
Mismanagement by OSERS following the 2008-10 recession triggered a staggering jump in the fund’s unfunded liabilities, which leaped from $198 million in 2008 to $812 million now.
The pension fund’s unfunded liabilities are forcing major budget cuts on OPS — nearly $30 million from its 2018-19 budget alone. The reductions included the elimination of roughly 180 positions (many of which were already vacant), cuts to central administration and pay freezes for most employees, excluding teachers.
The OSERS board doesn’t even handle the pension fund’s investment decisions anymore. The Legislature transferred that duty in 2016 to a state investment agency.
In addition, state senators voted this session for a feasibility study to be done of the possible transfer to the state of OSERS’ management duties, looking at the estimated annual costs.
OSERS, to its credit, has made some appropriate adjustments in its policies in recent years.
The trustees have reduced staff and made other budget reductions.
They have adopted a new travel policy, modeling it on that of the Nebraska Public Employees Retirement Systems. The policy sets limits on what can be submitted as expenses and sets out documentation requirements.
Still, the OSERS majority is harming public trust by continuing to budget for travel to conventions and workshops.
Anyone who doubts the symbolic importance should consider the awful example OSERS has previously set on that score, as during the 2015 convention at a seaside hotel in California.
For that event, OSERS plus a representative of the OPS teachers union gave the Omaha pension fund eight attendees, tied for most of any pension system nationally. The school pension system representing all teachers in California sent three representatives. The state of Nebraska and many other states sent one.
It’s not surprising that OPS superintendents — Cheryl Logan now, as well as her predecessor, Mark Evans — have voted during OSERS meetings against reimbursing the trustees’ travel.
Logan, like Evans before her, faces enormous pressure in working to balance the district’s budget, and travel excursions by OSERS members only make her efforts more complicated in reassuring the public that the district is managing its finances responsibly.
A minority of OSERS trustees made that point recently in their unsuccessful effort to remove the travel funding. Their warning should have been heeded.