Saturday, January 31, 2009

A City Council Primary Candidate Responds to Councilman Burlison's Statement Regarding the Pension Sales Tax

Fred Ellison, a City Council primary candidate for General Seat B, forwarded an email to me, in which he has responded to Councilman Burlison's statement on the Spfd Police/Fire Sales Tax:

Mr. Ellison's response:

I believe that approval of the 1% Pension Sales Tax would be a huge mistake. As a matter of fact, Tom (General Seat A, City Council primary candidate, Tom Martz) and I discussed yesterday that this would be a 38% increase in the city/county portion of the sales tax (2.625%) that we already pay.

There are several specific reasons that I cannot support this proposal:

1) The proposed rate is too high for the economic situation that currently exists. To date we have a better economy than many other areas and will risk aggravating the downturn in our local economy.

2) If the sales tax is approved, all incentive for City government to improve efficiency, reduce wasteful spending, and get control of personnel and benefit costs will be eliminated. It will be back to 'business as usual'. Automatic wage and benefit increases will resume and the deferrred compensation of City management will be 'reviewed' (as approved in the Council Bill 2008-368, ( ) see item #6 at line 128. (Is it any wonder that city staff supports the sales tax proposal? They are also being told that if it doesn't pass, they will risk termination.)

3) City management and the City Council are betting that the 1% Pension Sales Tax will get the funding level of the Police and Fire Retirement Plan (the legally correct name of the pension plan which was not used in the ballot language) back to reasonable levels before the settlement of the Telecommunications Sales Tax Lawsuit. If the settlement is received after the majority of the pension sales tax funding is received, the settlement funds will not go into the Retirement plan and thus can be spent on other 'priorities'.

4) The fundamental cause of the Retirement Plan under funding is that benefit increases granted in the late 1990's, as a result of poor personnel management (which continues today), has caused the liabilities of the Retirement Plan to spiral upward long before the investment losses that have occurred in the last six months. These benefit increases include: 1) The 100% return of employee contribution. 2) The inclusion of payments of accumulated leave, holiday, sick and vacation pay at the end of employment and overtime compensation in the calculation of pension benefits. The Police Officer and Firefighter Associations (Unions) need to accept their share of the responsibility for the unrealistic increases in these benefit costs. In 1996, the City's Annual Required Contribution was $2,578,429. In 2006, ten years later, the ARC was $9,834,917 an increase of almost 400%.

Based on these facts and that the 1% Pension Sales Tax will not be a permanent solution to the problem until the basic causes have been addressed, I cannot support the proposal.

Fred B. Ellison
Council General B Candidate


Note: Any other City Council member or City Council or Mayor primary (or otherwise) candidate who wishes to respond to Mr. Burlison's statement, or simply make a statement on the police/fire pension sales tax issue, may do so by contacting me at - Jackie


1 comment:

Anonymous said...

Based on these facts and that the 1% Pension Sales Tax will not be a permanent solution to the problem until the basic causes have been addressed, I cannot support the proposal.

Fred, your last statemest speaks volumes... if the Feb. 3rd funds are lost (again) the taxpayers are back on the hook. (again)