CFO Alex Sink speaks with urgency about her desire to expand and better train the board that oversees Florida's pension fund, but the governor and the attorney general running against Sink for governor opted this morning for a slower, more measured approach.
The tussle at Tuesday's Cabinet meeting offered a glimpse of the unfolding 2010 race for governor, which will play out most visibly on the Cabinet dais, where Sink and attorney General Bill McCollum will debate and vote on myriad issues over the next year.
"I'm of the adage that if it ain't broke don't fix it," McCollum said of Sink's proposal. "Our SBA governance might be different from some other states, but it doesn't mean it's broken."
Sink, the former (Democrat) Bank of America executive running against (Republican) McCollum for governor, wanted the Cabinet to recommend that the Legislature expand the board of trustees of the State Board of Administration by at least two people. The SBA board now consists of just three of the four Cabinet members: Sink, McCollum and Gov. Charlie Crist.
Sink's proposal would add at least one person with financial expertise, and one person who participates in the pension fund. Also, all trustees would get financial training, and there would be regular external audits of the pension's management and performance.
"Right now we have a board with three people, none of whom are required to have financial experience," Sink said. "That might have been good for 1885, but it's not good for the 21st century. If we have a board managing a $110-billion investment fund, it just seems to me the board should have some kind of training and knowledge."
Sink sought a vote on her proposed recommendation Tuesday, but McCollum and Crist agreed to wait until December's Cabinet meeting for a recommendation from SBA director Ash Williams and the SBA advisory group. McCollum questioned whether the Legislature even has the power to change the SBA structure without a constitutional amendment.
"I would like to thank the CFO for presenting this, but I think we ought to reflect on this," McCollum said. "I would be reluctant to support something like this until we get the advisory board's thoughts."
Sink has been advocating for SBA changes since taking office, and more urgently over the past year as the pension fund fell to a low of $87-billion and questions arose over its management. A recent SBA survey of 15 other state's funds found Florida is unique in its small governance structure, especially considering it is one of the nation's largest pension funds.
Also, the survey found Florida is the only state whose governor and attorney general help oversee the fund. Some ethics watchdogs say the attorney general's service on the board is a potential conflict.
After Cabinet, Sink said she is "disappointed" about the delay until December but she'll keep pressing on.
"Regardless, I am going to approach members of the Legislature myself to ask them to do this," she said, and then disputed McCollum's legal argument. "In further reviewing the legality, we believe the Legislature can expand the board statutorily and without a constitutional amendment."