By law, retired Baltimore County employees can’t get a COLA (cost of living adjustment) during their first five years of retirement.

Councilman Wade Kach, a 76-year-old, three-term Republican, wants to change that so he and his colleagues won’t have to wait to feather their retirement nest eggs.

The current council cannot approve their own salaries during their term, but they can set council salaries for the next term.

Under Kach’s legislation, the pensions for retired council members would no longer include the small and infrequent COLAs given to other county retirees.

Instead, when salary increases are awarded to council members, the salary increase would be applied to the retired member’s pension allowance.

“This is the way most of the retirement systems of legislatures are done,” Wade said earlier this week.

Submitted on May 3, his bill (40-24) has moved swiftly forward, staying under the media radar – this is the first story about its existence – and will come up for a council vote this Monday, June 3.

No Fiscal Analysis

Strangely, there is no analysis of the bill’s fiscal impact.

The Office of the County Auditor is responsible for presenting financial data for all bills coming before the council. In this case, the office notes that the actuarial impact of Bill 40-24 is “yet to be determined.” County Auditor Lauren Smelkinson works directly for the council

While the overall impact to the budget would likely be small given the small number of council members, the measure would benefit five councilmen if they decide to retire.

In addition to Kach, they are Julian E. Jones Jr. (D, 2nd), currently 61 years old, and Todd K. Crandell (R, 7th), who will turn 55 this November. If any one of them retires when their current term ends in 2026, they would receive an extra $27,450 above the $207,000 pension they are guaranteed during their first five years of retirement.

Kach’s bill would also boost the pensions of David S. Marks, a four-term Republican, and Chairman Israel “Izzy” Patoka, a two-term Democrat, when they retire.

If three members join Kach at Monday’s vote, the bill will pass the council.

Tied to Another Salary Bill

The pension calculations are based on another piece of legislation that was unanimously passed by the council last year.

Bill 8-23 established the future compensation for council members at a minimum of $78,000 a year and a maximum of $115,500 a year.

At present, council members get a $69,000 salary for what is considered a part-time job.

If Kach’s bill is approved on Monday and if the council later votes to increase next-term salaries to $78,000, his pension would be recalculated from a base of $69,000 to $78,000 upon retirement.

With 12 years of service, Kach would be entitled to 60% of the $78,000 figure, which would give him an annual pension of $46,800 – a 13.3% raise from the $41,400 pension he would get if based only on his current salary.

“This bill gaslights the public and county retirees”  – Retired County Administrator Fred Homan.

Crandell and Jones would get the same boost if they decide to retire from the Council (or run for another office) when their current term ends.

“This bill gaslights the public and county retirees by offering to give up COLAs for an arrangement that’s much more financially remunerative,” says Fred Homan, who retired as Baltimore County administrator in 2018 and is known for his detailed knowledge of the county pension system.

“Kach wants people to think that there’s some kind of equivalence to giving up a COLA that is limited at best to 3% by the county code, while he’s going to vote himself a 13% raise,” Homan said.

Three COLAs in 14 Years

The Kach bill differs significantly from the pension rules that govern county employees generally.

For them, there will be no COLA increase in the fiscal 2025 budget submitted by County Executive Johnny Olszewski.

Since 2011, retirees have gotten only three COLAs – a 1% increase, a 1.25% increase and a 3% increase.

County law limits COLAs to no more than 3%, which are based on the pension system earning more than a 7% yearly return, which has not happened much since the Great Recession of 2008.

What’s more, county employees are not eligible for COLAs until they have been retired for five years.

Kach is the sole sponsor of Bill 40-24, whose purpose is described as “clarifying the circumstance under which a former council member who is receiving a service retirement allowance is entitled to a recalculation of their service retirement benefit.”

At Tuesday’s work session, Kach said his bill follows the practice of the Maryland General Assembly, where he served in the House of Delegates for 40 years and currently gets a pension.

(Kach also gets a pension from Baltimore County Schools, where he worked as a math teacher and auditor for over 25 years.)

“This is the way most of the retirement systems of legislatures are done. The [Maryland] legislature is that way and works pretty well,” he said.

“Is there any questions for Councilman Kach?” Council Chair Patoka asked at the end of the 80-second  presentation.

Seeing none from his colleagues and asking none himself, Patoka moved on to the next agenda item.

• To reach a reporter: reuttermark@yahoo.com