Home OP-ED The $824,000 Malsin Plan

The $824,000 Malsin Plan

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The Scott Malsin story has the two main elements of a Greek tragedy (21st century version): Hubris and massively overpaid government officials.

How overpaid is Mr. Malsin? Try $824,000. (See below.)

Mr. Malsin retired from his City Council position before the end of 2011 so he would receive a highly valuable retiree medical benefit. After that date, the required service time to earn this benefit jumped substantially, to longer than a Council member can realistically serve with term limits. Amazingly, he can now be re-elected to the Council without losing the medical benefit. This differs from what a staff employee can do.

The rules say if a person is hired for more than part-time government work after retiring, he is effectively “un-retiring” and loses any benefits that no longer are in effect when he re-retires later.

But the key word here is “hired.” Since Mr. Malsin would be elected, the rule doesn't apply (in his opinion.) Mr. Malsin is weaving an intricate course through the rules, one that would make a slalom skier dizzy, to keep his benefits, an opportunity available to no other city employee. He is gambling that, even as other city employees are at best losing important benefits, are paying much more out of pocket for others, and are at worst being laid off, voters will not mind him looking out for his self interest in a big way that no one else can.

And a big way it truly is. The current cost of the retiree medical benefit (PPO version) for a family of three, like Mr. Malsin's, is $15,776 per year, of which the city pays 95 percent. Over the last six years this cost has risen by an average of 5.7 percent per year. If we project this over Mr. Malsin's roughly 30-year average remaining lifespan (switching him over to Medicare Supplement Insurance when he's 65), the city's cost will rise to $43,632 by the 30th year. The total value of the medical benefit received over 30 years will be about $824,000, for his five and a half years of part-time work.

This dwarfs the $8,500 annual cash stipend of a Council member. Being on the Council is a part-time job. The average member, I am guessing, puts in 15 hours a week at it, since many have another fulltime job. This means Mr. Malsin put in about 4,300 hours to earn his $824,000, which comes to about $192 per hour. And it's not even taxable, so it's really worth more like $300 per hour.

Nice work if you can get it.

It's not as though Mr. Malsin is living near poverty so that he can nobly serve the community. No, the public document which George N. Laase included in his March 16 essay (“Real Need or Just Greed?”) shows that Mr. Malsin has a very large stock portfolio (Mr. Laase estimates it at over $2 million, but the actual number could be half or double that.) This is fine, of course, but it changes the ethical burden on him.

It's particularly dubious when Mr. Malsin himself contributed so much to the city's current financial difficulties through his unwavering support of former City Manager Jerry Fulwood, who many now agree was an ethically reprehensible man who lavished taxpayer money on himself and his personal interests. See my Nov. 23, 2011, op-ed (“‘Malsin’s Ethical Failure Is Coming Back to Bite Him’”) for more on that. It is the primary reason I can't support Mr. Malsin.

There is nothing illegal about Mr. Malsin's slalom run through the rules to grab himself a huge chunk of future taxpayer money. But that doesn't make it ethical in these financially difficult times. Fortunately, it's up to the voters to decide whether it should earn him another Council term. There are four other fine candidates for the Council: Andy Weissman, Meghan Sahli-Wells, Jim Clarke and Mehaul O'Leary. I plan to support them.

Mr. Alexander may be contacted at soon2bparted@yahoo.com