Pension funds put activism before investment returns

The divestment of various “undesirable” companies and industries held by government investment portfolios has been all the rage in recent years, but politicizing investment decisions is bad news for taxpayers.

The California State Teachers’ Retirement System voted this month to get rid of all of its stocks in U.S. coal companies, and the University of California system acceded in December to students’ demands to sell off about $30 million of its investments in companies that operate prisons.

Despite the latest divestment fads, such investment activism is hardly new. The California Public Employees’ Retirement System has prohibited investments in gun manufacturers, tobacco companies and any company that might compete with state or local employees for contracts. After CalPERS lost 9.7 percent on its environmentally-sensitive “green” energy and “clean” technology portfolio from 2007-13, its chief investment officer quipped that it was “a noble way to lose money.” After all, it wasn’t his money.

CalSTRS also has a history of politically-motivated divestments, and the results have not been good for taxpayers, who have to make up the difference when pension funds underperform in order to cover employees’ retirement benefits. The pension fund lost between $600 million and $750 million after a 1987 law required divestment of companies doing business with apartheid South Africa, and it lost another $1 billion after divesting from tobacco companies in 2000.

“I’ve been involved in five divestments for our fund,” CalSTRS chief investment officer Chris Ailman told the CalSTRS board last year as the board was considering the divestment of its coal company holdings. “[On] all five of them we’ve lost money, and all five of them have not brought about social change.”

Once the Pandora’s box of politicizing state public investments has been opened, where does it stop? “If you start going down the list of Fortune 500 companies, I’m sure we can come up with reasons we should divest from each one,” Ivo Welch, a finance professor at UCLA’s Anderson School of Management, told the Los Angeles Times when asked about the UC private prison divestment. “I’m almost left speechless by how we pamper student whims.”

The same could be said of other environmental and social justice warriors who want to play politics with government workers’ retirement funds. Of course, this could all be avoided by switching public employees to 401(k)-style defined-contribution retirement systems. Activists would be able to put their money where their mouths are by investing their own retirement funds in “green” energy, or avoiding gun manufacturers and private prison companies, and others would be free to try to maximize their nest eggs.

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Pension funds put activism before investment returns

Make a pre-trip vehicle check before you head out

Summer is right around the corner. This means sunshine, deck parties, and — best of all — vacation.

A lot of folks will pack their cars to the brim and head to the lake, or to the forest for some camping, or even plan a long road trip to see the wonders of the world. The last thing you want is unexpected car trouble leaving you stranded at the side of the road or stuck in car rental place, ruining your plans.

A pre-trip vehicle check should be on your list of things to do before leaving the house. Along with making sure all the lights are off and underwear is packed, also make sure your car is ready to get you to your destination.

Kevin Roth, owner of Kevin’s Auto Repair Service in Forty Fort, Pa., said most repair shops will do a routine checkup for free to make sure there is nothing out of the ordinary with your car. “We will look over everything to make sure it is OK, but if you keep on top of your basic maintenance, you should be fine.”

According to Roth, some of the basic things to check are: 

Filters and fluids: This includes engine oil, and power steering, brake and transmission fluid. Also, don’t forget about windshield washer solvent and antifreeze/coolant. “Newer cars have caps and air filters,” Roth said. “If you turn on your air conditioning and it has a musty smell, those would need to be changed.”

Air conditioning: No one will have fun on a road trip if the car is a sauna. “If the vents are blowing out hot air, then obviously something is wrong,” Roth said.

Windshield wipers: According to Roth, keep an eye on the condition of the rubber on your wipers. If it is ripped or you hear or see scratching when the wipers are on, it is time to get new ones.

Brakes: If you hear any grinding or squeaking, take your care to a shop right away. Brakes are an essential part of your trip.

Battery: A battery check will be included in a basic maintenance check, according to Roth.

Tires: “Make sure they are in good condition,” Roth said. “Inflate them to the recommended pressure and make sure there is plenty of tread and no bulges.”

And, pack your emergency kit: “You want to make sure there is air in your spare tire,” Roth said. “Also make sure you have all the necessary tools to change a flat tire, as well as the safety triangles or road flares if you are on the side of the road.”

An emergency kit should also include jumper cables, gloves, some snacks, water and extra windshield wiper fluids and motor oil. Items not related to the car include a map/GPS, phone charger, insurance and registration information, flashlight and a first aid kit.

Page 2 of 2 – Lastly, enjoy the open road: Put down the phone, open your windows and cruise into relaxation.

Make a pre-trip vehicle check before you head out

Look before taking solar panel leap

Batavia Russell and her husband, John Russell, plan to put solar panels on the roof of their Denia neighborhood home this year, but they will wait until fall in hopes they can qualify for a rebate from the city.

They had to hunt a bit, too, for the right company to do the job, she said. They will hire a neighbor who has experience with the work.

“Do business with someone you know,” Batavia Russell said.

The first company the couple signed to do the work decided to stop doing residential installations, John Russell said. He didn’t fully understand the company’s relationship with the city until he started asking more questions about the city’s programs.

The city of Denton offers rebates for a variety of energy-saving home improvement projects, from smart thermostats and attic insulation to energy-efficient windows. Through Denton Municipal Electric, the city-owned utility, the city also offers a limited number of rebates each year to its customers who generate their own electricity with rooftop solar panels.

The rebates are part of the city’s annual budget, which is often depleted soon after it becomes available each October.

But the city doesn’t have partners or any kind of approved list of contractors for the programs.

For practical reasons, the utility doesn’t maintain a waiting list for solar rebates either, according to Brian Daskam, spokesman for DME, which has 55,000 customers across the city.

He confirmed the utility has received complaints from customers about solar installers and contractors, including promises of rebates long after the money has been depleted.

DME also has heard complaints about installers making exaggerated claims of energy savings.

The owners of North Texas Psychiatry and Psychotherapy put solar panels on the roof of their building, a house converted into an office suite on North Locust Street, in late 2012.

The installation is one of about 60 around Denton, most of which received rebates from DME, according to Daskam.

Kerri Vellotti, office manager for the medical office, said the installation qualified for a rebate and the owners also noticed a big difference in the electric bills once the panels had come online.

“It was as much as 75 to 85 percent less,” Vellotti said, although not every month.

Their installer told them it would take six to seven years before the panels would pay for themselves in electrical savings, an estimate Vellotti said was about right.

DME requires solar installers and other energy-efficiency contractors to register with the agency before their customers can qualify for a rebate, but that does not mean the company has been vetted or endorsed by the city, Daskam said.

The city recently began publishing a list online at www.cityofdenton.com with other information about the rebate program, which is called GreenSense.

Before investing in solar panels, Daskam recommends homeowners and business owners take advantage of a free energy audit from DME to learn what upgrades are best for their property.

Solar panels have become less expensive in recent years, dropping about 30 percent in price between 2010 and 2013, according to a report from the Union for Concerned Scientists. But investing in the recommended 5-kilowatt system for the average home remains on the same scale as buying a new car, or about $23,000 before tax credits and rebates.

For the customer ready to invest, Daskam and the Better Business Bureau recommend homeowners and business owners research the contractor’s history.

Jeannette Kopko, spokeswoman for the BBB Serving Dallas and Northeast Texas, said the nonprofit compiles information on all businesses, not just BBB members, in 13 North Texas counties, including Denton and Collin counties.

The group publishes the information online for the public for free at www.bbb.com/dallas. In addition to complaints made to the nonprofit, the BBB also gathers and publishes any records of recent government investigations.

Businesses are given a rating, from A+ to F, and the reasons for that rating, Kopko said.

Businesses that join the BBB must agree to meet standards for truthfulness in their practices to be accredited by the nonprofit, Kopko said.

Each of the member’s advertising and marketplace practices must withstand continued scrutiny to maintain its BBB accreditation.

Kopko recommended that consumers be sure to read and understand anything they are being asked to sign, too.

People often sign agreements thinking they are estimates, she said.

Review any agreement for information on the scope of work, the time period it will be completed and for what price. Check, too, for cancellation privileges and how problems are resolved, she said.

For those who cannot resolve a problem with the company directly, Kopko recommended filing a complaint with the BBB. A representative will help try to get the complaint resolved.

In addition, the complaint and the company’s response becomes part of the record with the BBB, she said.

If someone believes a solar installer has made misleading claims, Kopko recommended complaining not only to the city utility, but also to the BBB.

“If we can substantiate that [claim], we will tell them to modify it — it must be truthful or they have to stop using it,” she said.

PEGGY HEINKEL-WOLFE can be reached at 940-566-6881 and via Twitter at @phwolfeDRC.

Look before taking solar panel leap