Tuesday, January 06, 2009

Danged if They Do

City Council will consider future budget cuts today

Lack of communication played a role in the police and fire pension fund getting to the deficit amount it faces today. Some would have liked to have seen more foresight on the part of Springfield's City Council and City management.

Assistant Fire Chief David Hall indicated he began discussing troubles with the pension system's funded ratio in 2003 with, then city manager Tom Finnie. Hall said the board was assured by Mr. Finnie that it would be handled. Hind sight being 20/20, we know it wasn't handled at all.

Another factor, no City Council pension board representative, whether voting or non voting, sat on the pension board during the time frame when this pension "rain shower" became a severe thunderstorm. You can refresh your memory on the communication breakdown by reading the archived issue at the Community Free Press from September 10. Specifically, the story titled, "Pensions Remain Top Council Priority," on page 1.

Today, some are warning "dooms day scenarios" will play out at the City Council luncheon regarding ramifications on future budget discussions if the 1 cent pension sales tax does not pass in February.

So, Council is sort of danged if they do but, what if they don't?

Do we want a Council that will look ahead to the future in an effort to be prepared for a worse case scenario or don't we? I think we do.

One point that is missing however, in this discussion, is the fact that the city bought some time when they paid the full actuarial amount in fiscal 2008-09 and Council approved putting the tax initiative on the ballot in February.

We all know that the pension system needs fixing and sooner, rather than later, because, the deficit amount grows more every day but, if the tax fails in February, the city, by making the full contribution last year and by getting a tax initiative on the ballot, isn't required to make the full contribution in the upcoming fiscal budget. They bought themselves some time.

I hope they'll shoot straight with the citizens of Springfield and give them the whole truth. They bought time that would allow them to look at other solutions or initiate the sales tax proposal again.

Nothing changes the fact that the pension fund needs to be fixed and the problem will not go away without the sacrificial lamb of a huge cash infusion however, the city won't be forced to make severe cuts in the budget next year unless they choose to and, they may choose to but, they need to explain why they are choosing that route rather than presenting it as though it must be done and it must be done in the 09-10 fiscal year.

It is a complicated issue, the new city manager has done a good job of trying to articulate it so the public understands the issue. As long as he continues to do that he also continues to build credibility. If he fails to tell the whole story or tells it selectively? He runs the chance of damaging the credibility he has built.

Burris, early on, when he began pension presentations, indicated if the sales tax doesn't pass in February it will be brought back to future ballots until it does. These scenarios may be a strategy to make it appear they will be forced to make drastic cuts in the upcoming budget if the tax doesn't pass and it may be a beneficial tool to get voters to approve a tax the second time it is presented if it does not pass the first time but, it will be the city's choice, not their mandate.


Anonymous said...

Even if the tax passes in February it is still a future and endless blank check. Send another 150 million to the "Wonders of Wall Street" and it will be gone again.

The Springfield public will then have to do what the STATE says and cough up more money to cover what has been paid for twice.

What age do these people expect to retire at / and what is the total cost compared to what was paid to them when they were working ?

No group should be able to command the basic future bankrupcy of the City simply because Mr. Finnie started a blank check retirement process with the support of the previous Council that had no clue what they were doing.

Anonymous said...

This article is only one example of the comprehensive and thoughtful analysis that is found on this blog. The voters of Springfield may be wise to vote 'No' on February 3rd and wait to see who is elected to City Council in April before opening their pocketbook. If the composition of the new Council has any similarity to the current Council, the taxpayer may be better served by a permanent, dedicated sales tax at a much lower rate.