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Pension Bill Advances, But Questions Remain As Ganim Prepares City Budget

March 27th, 2017 · 7 Comments · Analysis and Comment, City Budget, City Council, News and Events

A week from submitting his budget proposal to the City Council, Mayor Joe Ganim is banking on legislative approval to allow municipalities to bond unfunded pension liability that would save millions in debt service payments. The bill cleared the state legislature’s Planning and Development Committee on Friday, but questions linger as it awaits a full vote of the State House.

Although Planning and Development approved the proposal by a 16-2 vote, several Republican members of the committee suggested language be inserted into the bill making it a Bridgeport-specific proposal, expressing concern the precedent it would set for all municipalities, according to Av Harris, Ganim’s legislative services director.

“Originally when we drafted the bill,” says Harris, “we really tried to steer clear of writing a Bridgeport specific bill because that is usually frowned upon in the General Assembly, and there may also be other municipalities with similar unfunded liabilities in Municipal Employees Retirement System that might want to take advantage of the bond market and pay off their unfunded MERS debt.

“Moving forward, however, we would be open to ideas from all sides and discussion as to what is the best mechanism to give the city of Bridgeport the authority we need to issue bonds to eliminate this MERS unfunded liability. This is very solid public policy and we are very pleased it was endorsed so strongly by the Planning and Development Committee.”

The proposal has its critics including city resident David Walker, the former U.S. Comptroller General, arguing that borrowing to cover pension costs is poor public policy that has bitten the city in the past.

Ganim, addressing the legislative committee last week, declared “We estimate that the interest rate on the taxable bonds we want to issue to pay off our unfunded pension liability will be in the 3.5% – 4.5% range–a major difference from the 8% we are currently paying on the unfunded liability … Our actuaries estimate the savings Bridgeport taxpayers will realize by taking this step will be approximately $2.8 Million dollars per year, for the next 26 years.”

This is a mundane public policy issue for taxpayers but not for their pocketbooks, says Ganim who wants to hold the line on taxes for the budget year starting July 1, following a large mil rate increase last year in a property revaluation year.

City finance officials are juggling a number of moving parts in their spending plan based on what happens with the legislature.

Most of the council review will be conducted by the Budget and Appropriations Committee including meetings with department heads and public hearings during April and May.

Ganim will submit his budget next week, per city ordinance.

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7 Comments so far ↓

  • Frank Gyure

    Awful idea. Forget about the State Legislature. The place to stop it will be in the State Senate. Wonder how State Senators Edwin Gomes and Marilyn Moore stand on this issue.

  • John Marshall Lee

    I am wanting and not receiving a better understanding of the “Bridgeport pension problem” this new State approval will solve or at least provide a less expensive course of action. Is anyone slightly confused or somewhat unsure of what Ganim2 is doing on this visit to Hartford?

    In the statement above, OIB indicates the deal is “to bond unfunded pension liability that would save millions in debt service payments.” So I must ask, what debt service payment are you talking about? The only pension liability we have funded as a City so far was in 2000 for Pension Plan A covering Police and Fire personnel. Are we doing anything with that bond or plan? I do not think so.

    We seem to be focused on pension funding, NOT YET BONDED for the State of CT plans on behalf of fire and police personnel who were formerly in Plan B for each group of workers. And what is the hurry at this moment to bind ourselves ever more tightly to the obligations entered into less than two years ago by Finch, and never really explained to the public (though covered in the CAFR 2015 and 2016 which is also not explained to the public by the administration).

    Look at the CT Post front page regarding Chief Honis and a long police career featuring nearly 100% attendance, and you ask yourself how did those numbers come to be? Look at the contracts? Look at the details? Fair? To whom? Was Chief Honis in Plan A like Fire retirees Fardy, Mackey and Day? How and when did he move to Plan B (intended for hires after the early 1980s)? For more than 90% of the years he worked, his retirement pay base did not include overtime earnings, did it? Yet somehow he was able to work the system, and instead of a monthly benefit likely under $8000 per month, he will earn almost twice that for the rest of his life courtesy of the future taxpayers!! Generous? Incredible. What amount of money must be set aside to fund the effect his highest three years have added to his retirement benefits? Know that I have no emotions one way or the other regarding Chief Honis, the long-time public safety employee with a great attendance record, but how did we get where we are with our Pension Plans, where negotiations are supposed to provide a win-win for all parties? Perhaps we can see some more detail before we do another round of bonding. Time will tell.

    • Andrew C Fardy

      John, let’s assume Honis made $140K per year. Under the old contract Honis would have received $105,000 pension. He would not have received any credits for the years after he had 30 years on the job. Times have changed from when I retired, there were no sick days, we had unlimited sick days and as far as vacation goes you could only save one week from the previous year.
      The police department needs to give a test for chief, this idea of Ganim paying back Perez is bullshit, besides I don’t believe Perez would qualify for the chief’s job but with this band of thieves now in power who knows. John, I don’t know how Honis got under MERF but in this city nothing is a surprise.
      Wait until the mayor sees the size of the retirements that will be coming shortly. He is going to find out he will need a second bonding, dumb ass.

      • Frank Gyure

        We’ve talked about Honis here. Several people here came to the defense of Deputy Chief Honis and claimed he was a stalwart warrior in the crime wars in Bridgeport during the dark days of the 1990s. But let’s face it. These pension numbers are jaw-dropping.

  • charlie

    What happens if Ganim’s cabal fails? Hire only seasonal like the felon is doing now? Push the budget further down the road? Blame everyone else except self? Raise taxes?

  • Frank Gyure

    I’ve been saying this since the disastrous Re-Evaluation/Grand List Loss of One Billion Dollars. Bridgeport is broke. Bridgeport is bankrupt. The Mayor and and the City Council passed a Death Spiral Budget. Joe Ganim cannot find buyers for City property this budget cycle. So now we are digging deeper and deeper into cooking the books.

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