VOL. 129 | NO. 38 | Tuesday, February 25, 2014
Strickland: Shorten Pension Ramp-Up
By Bill Dries
The Memphis City Council chairman thinks the city shouldn’t take five or six years to ramp up to an annual pension fund contribution of $100 million but instead do it in two fiscal years.
“I think everyone is in uniform support of fully funding our annual contribution,” council chairman Jim Strickland said on the WKNO-TV program “Behind the Headlines.” “In fact, I don’t think we ought to take six years. I think we ought to take two years. Get it fully funded, whether its $60 million or $100 million.”
The program, hosted by Eric Barnes, publisher of The Daily News, can be seen on The Daily News Video page, video.memphisdailynews.com.
The six-year period is part of a bill pending in the Tennessee Legislature sponsored by state Senate Republican leader Mark Norris that would apply to cities across the state.
Strickland notes that the legislation addresses annual unfunded liability contributions, not the overall liability of the plans, which the city estimates at $709 million.
The $60 million and $100 million annual contribution figures represent differing versions of the annual contribution by municipal union leaders and the administration of Memphis Mayor A C Wharton Jr., respectively.
Wharton or others in his administration were asked repeatedly over several months to be part of the show’s discussion but declined all requests.
Council member Shea Flinn agreed with Strickland, saying a five- or six-year ramp-up, which Wharton has advocated, would take the decision to a post-2015 mayor and Memphis City Council in which most of the council members could be serving a second and final consecutive term as city term limits approved in 2008 kick in.
“So there’s a lot of room for political gamesmanship,” Flinn said. “If we take a two-year plan … it forces everyone to come to the table.”
At the City Council committee table in a week will be the administration and council members, as well as municipal union leaders, including the heads of the Memphis Police Association and the Memphis Fire Fighters Association.
Police union president Michael Williams said the solution is a matter of priorities changing instead of employee benefits.
“If they are going to put their lives on the line in this city, then you are going to have to provide pensions. I don’t think that you have to raise taxes. I think there has to be some prioritization,” Williams said. “Ever since this administration has been in office, all they’ve done is cut, cut, cut. But every year, they come in and say that there’s a deficit. I don’t understand because you haven’t really provided the core services to the citizens of this city that should be provided.”
Firefighters union president Thomas Malone said his union’s actuary consultant puts the pension liability at $300 million, less than half the administration’s estimate, using the same basic figures the administration began with.
“We want to take from the employees what it’s taken 35 years to get to this level,” Malone said of the questions to come about changing benefits for public safety employees for two divisions whose budgets make up 70 percent of the city’s total general fund budget.
Malone is also critical of a report on public safety efficiencies by Public Financial Management, a public finance consulting firm hired by the administration.
“This same consultant said, ‘If you don’t have an active company out east, let’s cut some of the staffing off there,’” he said. “Two days later, a 7,400-square-foot home out east caught fire. How would that homeowner feel if we sent a skeleton crew because he hadn’t used us before. … This same consultant promoted privatizing our (emergency medical services) system. … We are rolling the dice with our staffing.”
Strickland cites another part of the PFM report that shows the police force grew from 1,900 uniform officers in 2008 to 2,400 currently as the PFM consultants concluded that the increase in cops wasn’t necessarily behind a reduction in crime over those years.
“None of those boots hit the street. … The number of police officers on the street was still 1,900. That’s what the report says,” Strickland added. “I don’t know if that is true.”
Williams disputes that the city’s crime rate has been reduced.
He said the city’s decision not to have promotions and new police recruit classes has taken the uniform police complement down to 2,100. In the next three years, 146 police officers plan to retire, according to Williams. That’s in addition to another 190 who have retired or left the force in the last two years.
“We have precincts right now where we have wards that are not covered. They are robbing Peter to pay Paul at these precincts,” he said. “They are about to throw the police department into a tailspin.”