Pension plan for water board director questioned

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wwltv.com

Posted on April 17, 2013 at 10:40 PM

Updated Wednesday, Apr 17 at 10:41 PM

Monica Hernandez / Eyewitness News
Email: mhernandez@wwltv.com | Twitter: @mhernandezwwl

NEW ORLEANS - With decaying infrastructure, a major rate hike and proposed reform, the Orleans Parish Sewerage & Water Board has stayed in the news.

Now, the head of the utility has announced she is retiring.

After nine years as the head of the water board, Marcia St. Martin plans to leave her post at the end of the year, citing a double knee replacement surgery.

“I had scheduled retirement for February of 2015. And I've just accelerated it by about 13 months,” St. Martin said. “Personally I was retirement eligible in 2002. Following Katrina, I made the decision that service to my city was more important.”

St. Martin has had a more than 40-year career in the public sector, making history as the first African American woman to head the water board.

“The most important contribution I've made to government service in New Orleans has been the ethical and principal centered servant leadership that I've been able to bring to this community,” said St. Martin.

With S&WB rates set to double by 2020, St. Martin's announcement is prompting discussion about her retirement benefits.

She will reportedly receive more than $700,000 in her first year of retirement, then roughly $175,000 each year after, partly funded by ratepayers.

That’s because, in 2010, Marci St. Martin entered the Deferred Retirement Option Plan, or DROP. The program allows an employee to receive a pension while they are still working, for up to five years.

The pension is deposited into an account, and the money is released in a lump sum upon retirement.

St. Martin reportedly gets a deposit of over $14,500 each month in her DROP account. By the end of 2013, that would mean a lump sum of more than $520,000.

St. Martin, however, denied the amount reportedly deposited each month. She said she did not immediately have the number at hand. A spokesman said those numbers would not be available by the time of publication.

Government watchdogs say the water board's pension plan needs reform.

“The pension plan at the Sewerage & Water Board actually lets employees at times get more income in retirement than they did when they were working as a combo of pension benefits and social security. Now, obviously that's something as anyone in the private sector can tell you is out of whack,” said Janet Howard, president and CEO of the Bureau of Governmental Research.

St. Martin first denied that DROP is funded, in part, by rate payers.

“The DROP plan does not cost the ratepayers,” said St. Martin.

She later admitted otherwise, citing the large portion funded by the Sewerage and Water Board.

“I would say that, yeah, it's from, it's the Sewerage and Water Boards income,” she said.

Political experts said any reforms to pension plans must look forward.

“If it’s something that was put in place and approved, it's something she's vested in and has a right to that,” said Eyewitness News Political Analyst Clancy DuBos. “I think most of the reforms are going to have to look forward because you cannot take away vested retirement benefits.”

Government watchdogs say with a controversial rate hike, aging infrastructure, and talk of reform, the next executive director will have a lot of work to do.

“I think the next executive director has to be able to look at some of the problems in a creative way, instead of taking the attitude, well this is the way we've always done things,” said Howard.

“The board has not been functioning the way it should, it is not a policy setting body it is too much into micromanagement, it really needs to be revamped.”

Howard notes that the major rate increase would help pay for infrastructure repair but is also set to improve operations. Howard said there is still no plan on how that will be done.

In 2007, BGR awarded St. Martin with an Excellence in Governance award for her leadership in the wake of Katrina.

St. Martin said, after retirement, she plans to volunteer her time with the Sisters of the Holy Family, which operates St. Mary’s Academy.

The water board plans to begin a nationwide search for St. Martin’s replacement.

 

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