Arizona’s public-safety pension system faces financial peril because of poor investments and generous retirement benefits. (Wochit)
The Public Safety Personnel Retirement System, which has come under fire from lawmakers in recent months, has expanded its use of outside consultants by hiring a media relations and crisis communications contractor.
The trust fund for first responders, correctional officers and elected officials last week hired David Leibowitz to a $72,000-a-year consulting contract. He will work for PSPRS spokesman Christian Palmer, who is paid nearly $95,000 a year.
The additional media firepower comes as PSPRS has been under attack by a few lawmakers who want another overhaul of the fragile retirement system.
Rep. David Livingston, R-Peoria, said Monday that he’s working on a handful of bills that would affect PSPRS, but he declined to provide details. Other lawmakers have barnstormed the state questioning the trust’s viability because of court decisions rolling back reforms, poor investment performance in the past and lucrative benefits.
Livingston said he was surprised PSPRS was paying a new consultant $6,000 a month, but he said the agency may want additional help during the upcoming legislative session.
“I think they are a little worried,” Livingston said. “But, he’s very, very qualified. When there are important issues, you have to pay top dollar to get top results.”
Leibowitz already is closely tied to thousands of members of PSPRS, as he has represented the Arizona Fraternal Order of Police and the Professional Fire Fighters of Arizona.
He also represents other police and fire organizations across the state, as well as the Arizona Coyotes. And he served as a crisis manager for ex-Valley Metro Chief Executive Stephen Banta, who quit in late 2015 after an Arizona Republic investigation found Banta used public funds on expensive meals, alcohol and numerous flights.
Leibowitz also has worked with PSPRS Chairman Brian Tobin, a Phoenix Fire Department deputy chief, and PSPRS Vice Chairman William Buividas, an officer with the Phoenix Police Department. Tobin and Buividas have worked to protect pension benefits for Phoenix first responders.
Leibowitz said he was hired to a assist with the agency’s “tremendous workload.” He beat three other well-known, larger public relations firms: Rose Moser Allyn, First Strategic and HMA Public Relations.
“It’s a $9 billion fund, and if you look at agencies of comparable size that get media requests and is speaking to tens of thousands of constituents, it’s a lot of work,” he said. “It’s less expensive to go out and get someone from the private sector who you are not paying benefits to.”
Along with Leibowitz, PSPRS also pays $213,600 a year for the lobbying services of HighGround and Public Policy Partners.
The Arizona State Retirement System, which manages a $38.7 billion trust for state workers and teachers, does not hire outside lobbyists or media consultants.
“We don’t outsource stuff we can do in-house,” said David Cannella, who is paid $85,000 a year. “We have been in a downsizing mode the last few years. We are always looking to consolidate and find savings in our budget. We think that is important in a day and age where we are the guardians of the trust for our members.”
Cannella noted that ASRS Director Paul Matson, in order to save money, did not replace an assistant director who made more than $100,000 and also combined legislative affairs duties to the trust’s in-house rules writer.
The state Treasurer’s Office, which manages a $5.7 billion trust, also does not hire outside consultants.
Gov. Doug Ducey in June fired all contract lobbyists working for various state boards and commissions. Ducey’s executive order, however, did not apply to PSPRS, which is exempt from the state procurement code.
“While PSPRS operates as an independent board, it is our position that all government entities should do everything within their power to be responsible stewards of taxpayer dollars,” Ducey spokesman Patrick Ptak said.
Palmer, who signed the contract to hire Leibowitz, said PSPRS has 50,000 members and retirees, and serves more than 230 public agencies.
“This by far was the most cost-effective way for us to communicate effectively, and the need was made even greater by the pension reforms passed last year,” Palmer said.
Calls and emails to PSPRS Administrator Jared Smout were not returned.
Earlier this year, the Pew Charitable Trusts, a Philadelphia-based non-profit that has extensively researched public pensions, concluded PSPRS was the third-worst performing government trust fund as measured over a 10-year period that ended in 2015. Smout and other PSPRS officials have dismissed the report’s findings.
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Reach the reporter at [email protected] or 602-444-8478 or on Twitter at @charrisazrep.
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