Andy Fardy, retired Bridgeport firefighter, and John Marshall Lee, co-founders of Budget Oversight Bridgeport, share their second commentary installment examining the complex world of city pension plans. Part one can be found here. It also follows this piece.
The Police Trustees do not appear to have sought independent advice and therefore were left to what the City actuary reported or what was stated by the City Attorney about State of CT desires. However, at least one stakeholder in this entire decision-making showed concern about what might happen, if and when the potentially hypothetical became reality. So the lawyers went to work to draft a “Resolution of the Bridgeport, CT City Council.” It has 16 “Whereas” paragraphs and 13 of them include words like ‘funds,’ ‘funded,’ ‘funding’ or ‘financial obligations.’ HOWEVER, THERE WERE NO ACTUARIAL REPORTS FROM ANY OF THE THREE SOURCES PROVIDED TO Contracts Committee Council persons. City Council members present asked for numbers. The City Attorney said he had none to provide. This was a Resolution regarding “long term financial obligations” and not a Contract. Should this have been referred to the Budget & Appropriations Committee also?
Responsible City Council members should be standing in for the taxpayer. The most important “Whereas” seems to be on Page 2: the City intends to satisfy these contractual obligation pursuant to Fire Plan B and Police Plan B, at Section 13 via the City’s statutory authority to raise revenue, as reasonable and necessary to meet all financial obligations through the use of its municipal taxing powers and bonding authority.” This is called banging on an already sunk nail! Were Trustees worried that they would be sued as Trustees because funding decisions made by different administrations would leave them in a vulnerable place, with unrealistic assumptions relative to actual performance?
Without seeing the prepared actuarial input that has been requested and paid for by three different sources having three different perspectives:
• Fire Plan B assets by the Fire Plan Trustees,
• by taxpayer funds to Sigal and Company actuaries from the City
• by the State of CT, to whom we also send income tax payments
Without seeing these inputs it is impossible to understand future potential liabilities for the City. But for prudent citizens who currently see cash earning negative real interest rates, with bonds or other fixed obligations standing risks of capital loss in face of future interest rate increases, and equity investments reaching higher levels daily that may not be sustainable over time, reviewing those documents is an intelligent exercise before making a decision that will be of special interest and concern to retirees and taxpayers.
However, the Contracts Committee acted on a motion to approve the Resolution. A second to this motion was slow to develop, so Council President McCarthy seconded it and the Contracts Committee provided their approval. No input from the public was possible in this meeting. The Resolution itself was not made available to the public in attendance. Contract Committee approval moved to the City Council agenda that evening and was passed, though less than a handful of people in the room could have outlined what it was all about And the process allowed no public input as the RESOLUTION restated the public responsibility to “meet … all financial obligations.” It never provided any sense of what words like “reasonable and sufficient” or “in order to adequately and appropriately fund the accrued CMERS obligations” means in actuality. Fair to the public?
And what it was about is the silencing of trustees on the Fire Pension Board, two of whom resigned earlier this year, when they sponsored a different view of dividing Trust assets. It is also about concern of remaining Trustees who do not wish to be sued personally for possible dereliction in duties as pension Trustees. And it is about a City administration that is kicking potential cans down the road in terms of secure funding of pension obligations as previous administrations have done. Was the City able to lessen its CMERS funding for the upcoming budget year? By how much? Very significantly it is about new labor relation contracts that will allow overtime earnings to create several high years of compensation for public safety employees active under Plan B, not necessarily in their final three years. Where has that story been reported in the media or identified at budget time and understood by the public? Will that allow some to retire with benefits equal to or higher than their final year of pay? How do residential taxpayers currently feel about this story?
Finally, if nothing is done to severely curb overtime in these departments or change the contracts themselves, what amounts will the State look for from the City in terms of future increased contributions to CMERS? Why don’t you talk to your ‘fast track’ Council members to see if they have any answers that satisfy you? Perhaps you will also ask them why in times of Special Hearings like this the public is not allowed to ask questions or offer opinions? Time will tell.
*** FUTURE SHOCK! ***