Members of the Public Employees Retirement Association of New Mexico are finally standing up to the agency's executive director, Wayne Propst.
On Tuesday morning the board rejected a proposal to give Propst and 18 other exempt employees a 4 percent pay raise. The proposed raises were included in PERA's annual budget, but during an extraordinary two-hour-long meeting in which several board members repeatedly blasted Propst, board member Maggie Toulouse Oliver made a motion to pass the approximately $35 million budget without the raises for the exempt employees. The budget was approved without the raises for Propst and the other exempt employees.
During the meeting one board member read a letter from state Auditor Brian Colon which said that Propst had "acted reasonably and within his authority in meeting with an obtaining board approval for [past] raises" that Propst gave to PERA employees last year and in previous years.
Read the auditor's letter here.
But that didn't stop Propst's opponents on the board from ripping him. Member Loretta Naranjo-Lopez said several times that she had no confidence in the staff's ability to run the agency, which administers a $16 billion fund for 40,000 retired public employees and for 50,000 current public workers who are paying into it.
Board member Claudia Armijo said that last summer when she started questioning more than $600,000 in raises that Propst had given to PERA employees, and past raises he had orchestrated for himself, she was told by the staff "to go pound sand."
Armijo stated the meeting with an attack on Propst by noting that in early February the board voted to strip Propost of his power to give raises while he is under investigation by the New Mexico Attorney General's office. After noting that, Armijo asked who on the agency's staff had prepared the budget with its proposed raises, suggesting that perhaps Propst had violated the board's February order.
Board members Patty French and state Treasurer Tim Eichenberg also criticized Propst and Eichenberg said the executive director never should have taken $24,000 in raises over the years that were not approved by the full board.
Colon's letter also criticized the board PERA's board and staff for not being able to figure out who has authority to do what at the agency.
"The board has the authority to appoint an executive director and set salary" Colon's letter said. "As such, the Board, acting as a whole can determine what salary it deems appropriate for those positions.
"The OSA further notes that due to inconsistencies within the structure of applicable statutes, administrative code rules, and Board policies and procedures, the Board should take immediate action to provide clear alignment between Board policies and procedures and applicable legal authority. The board has the authority to rescind pay raises it deems inappropriate or no longer supports. Further, there should be a process applied, which provides a vehicle to approve pay increases under its purview."
When Propst offered to help board members clarify its policies, Armijo, who is an attorney, shot back that the board didn't need his help.
There was another extraordinary during the meeting. It turns out that PERA's FY 2019 budget was sent to the state Legislature and state officials without full board approval as required by law. The board's budget committee approved the budget, which contained a $3 million spending increase, but the full board didn't--at least not until recently.
Propst admitted that the mistake was his, but it must have given his supporters on the board pause. The executive director of an agency that oversees a $16 billion retirement fund didn't get full board approval for the budget, and then didn't immediately tell the board about the mistake?
The PERA saga will continue and we'll keep you updated.