Just because city employees can’t take a position on the pension initiative, doesn’t mean elected officials have to remain mute.
And city officials showed no reluctance to do some pre-election electioneering before and during Tuesday’s City Council meeting.
At issue is whether the city should maintain its current guaranteed-benefit plan for non-public-safety employees, or switch to a 401(k)-type plan, in which how much an employee receives is based on what he or she contributes and how the market performs.
A local group funded by national dollars is looking to put a measure on November’s ballot that would force the city to fully fund the $340 million in unfunded liabilities in the current employee pension fund.
While top city officials concede the plan will save money somewhere off in the distant future, they say the massive pension fund contributions required will most likely drive the city into bankruptcy long before any savings are realized. In the first year alone, they estimate it will cost an additional $24 million.
Even if the current pension needs fixing, this plan isn’t the answer, city elected officials said.
“There's no question that our pension plan is currently underfunded,” said councilman Steve Kozachik. “But there are multiple factors causing that and no single magic bullet (is) going to fix it. What is for sure though is that you don't kill the patient in order to try to cure the disease. That means you don't adopt a policy that will crash the plan in an effort to try to fund it.”
Mayor Jonathan Rothschild said the proposal is misguided and will wind-up harming every resident, not just city workers.
“The problem with the proposed proposition is it cuts off funding to retired employees through contributions of new employees, and puts that on the backs of taxpayers,” Rothschild said.
With millions more earmarked to pay pensions, the city would have to implement draconian cuts to police, parks, roads and other services to make up the difference.
“That is a lot of core services we rely on, police, fire, transit, roads, parks,” Rothschild said. “This is not the answer.”
Peter Zimmerman, a consultant with the Committee for Sustainable Retirement, dismissed the city’s overwrought response in a press release saying it’s a result of being “uninformed” about what the initiative will actually accomplish.
Instead of sinking the city, the initiative will preserve employee pensions and eventually free the city from an oppressive pension plan.
In the past, Zimmerman has said as more details emerge about the initiative, much of the negativity will subside.