Pensions, unfunded liability, bonding were some of the topics citizen fiscal investigator John Marshall Lee presented to the City Council Tuesday night. From Lee:
Next Tuesday September 12, there are Democratic primaries in nine of the ten districts. Citizen candidates in nine districts decided to run, not because they were organized by the historically influential, politically crafty, but publicly unaccountable association like the one most of you represent, called the DTC. But City wide, enough folks, young and old, of all colors, cultures and political persuasions have had enough. They are taxpayers who have had their pockets picked without explanation too often by decreased property values and increasing taxes. They are families with youths lacking proper education or programs from the City to advance them to a place better than where their families are today. It’s a wave with building energy. It will grow larger.
Nearly 18 years ago, the City realized they had ignored funding retirement plans for public safety employees. Joe Ganim set before them a concept that would solve the whole problem: Borrow $350 Million over 30 years; invest that money at risk prudently; retirement benefits would flow for the life of those members. What was the whole price tag? Of course it was more than $350 Million because interest expense over $550 Million was to be paid until 2029 and the total paid by then would be over $900 Million. Before we finish paying the price will be more than ONE BILLION DOLLARS.
For years Plan A has sucked $30 Million annually from the Police and Fire budgets. How is that working out? Tonight Ganim2 offers another bond concept, for MERS UNFUNDED ACCRUED liability. That’s the price tag that the City will pay for moving police and fire personnel to MERS from Plan B. Have you yet been shown the whole price tag by which you as taxpayer representatives can evaluate a right course? Ganim and others indicate that bonding will take care of the whole expense. Is that the whole truth or even partly honest?
Well the September 2017 quarterly meeting of Plan A was canceled. How much is left in that plan? Anyone? How much have we been adding annually to keep Plan A going in recent years? Have actuaries asked for $15 Million more that we paid? What is the net liability remaining from the original Plan A $350 Million? The Finance Director indicated that it was $250 Million net of pension assets and assuming 7% earnings!! See how tax payments can exceed ONE BILLION?
Plan A is a plan that has not gone according to plan. Why doesn’t Ganim tell you that annually? What provides confidence that the vote you are asked to make tonight for nearly $100 Million plus interest to fund MERS isn’t just another concept, certainly not a guarantee, and will require added interest expense if you approve this tonight, and a lot more future funding? How much? Simply stated CT MERS is not providing the 8% return everyone assumes. In the past 10 years earnings have averaged below 5%. Why did we move from Plan B to MERS? What was the public told? Where did your Council Public Safety Sub-Committee review such proposal before referring it to Budget with a recommendation and a PRICE TAG? Any thoughts? Why do you make decisions binding the taxpayer when you have not been thorough in your research, following your own Council process? Is the price tag for public safety retirement benefits including overtime another billion dollars when actual earnings rates are used?
I love “second chances” but Ganim’s bonding concept for MERS is just an extra expense, not a savings. It does not deserve your vote until you tell the price-tag projection with 5% earnings assumed to the voters. When you buy a car Federal law says that the price of the vehicle including interest must be set out for you, the consumer. When it comes to City benefits and compensation and the financing of same, there is no such law. But don’t forget the angry taxpayer. Come Primary Day and Election Day this year, they will remember your prideful ignorance of how you have committed their money without full investigation and knowledge.
Refer the MERS bonding to Public Safety TONIGHT as it is Public Safety contracts that have created “the past service liability” of $207 Million assuming 8% earnings. You are not running for Governor and few of you have an option of living in Easton, either. When you vote on this matter will you really know the price tag for public safety overtime and its future cost to Bridgeport voters? Time will tell.