Saturday, May 30, 2009

Where's my 4.1 Million Dollars, Dude?

That might be what Police and Firefighter Pension Trustees and the past and present City Council members are asking today

Update: Please refer to: "JackeHammer: I was wrong..."

The City of Springfield stated, in its explanation to Council Bill 2009-053 (Ordinance No. 25556), that, with Council approval, the net AT&T Mobility Settlement would equal the amount the City underfunded the pension plan during four past fiscal years, with interest. Council, clearly, unanimously approved the bill with that intent, also amending the budget, "In the amount of $10,225,361.00 for payment into the Police Officers' and Fire Fighters' Pension Fund to meet the City's net pension obligation," on March 9, 2009.

I could quote and quote from Ordinance No. 25556, noting the intent of the ordinance, and I could quote and quote from the March 9, City Council meeting, proving the belief of the City Council that the money the City would end up with, as a result of the AT&T Mobility settlement, would be enough to cover the entire net pension obligation, including the interest accrued at 7.5 percent through June 30, 2009 but, you can read the bill as linked above for yourself.

Clearly, our past Mayor, Tom Carlson, believed it was "a done deal."
Carlson stated in his State of the City address on March 5, "The newspaper put a lot of pressure on us through the editorial board but, your Council stuck to its guns (and) as a consequence of that, we are going to get enough money in here to make the full payment that we owe, with interest."

At the following City Council meeting, past Councilman Ralph Manley believed it was a big win for the City, "This is a real bonanza for us, and we're very happy that all of this settlement can go to these funds, and it's going to go a long way toward catching up some of the shortages we've had," Manley said.

City Manager Greg Burris said it would take the City from around $200 million in shortage to around $190 million in shortage amounts, "and, as the Mayor pointed out, it does make the City whole in terms of making that contribution that was recommended by the actuaries over those 4 years," Burris said.

Carlson, in an exchange with Finance Director Mary Mannix Decker asked her, "So, to say it another way then, if the Council approves this bill tonight, once the money's received, it will be placed in the pension fund and it would fully satisfy all the payments that the actuaries were requiring the City to make over the past 3 or 4 years?"

Decker responded, "Yes, that's correct."

So, what happened? Where's the pension fund's intended $10,225,361.00?

Section 1 of the ordinance might offer us a bit of direction. It states, " The City Manager, on behalf of the City of Springfield, Missouri, is hereby authorized to enter into an agreement with AT&T Mobility, LLC and those who conduct business on its behalf and named in eight tax protest suits filed in the Circuit Court of Greene County, Missouri, provided said agreement is in substantially similar form and content as the agreement entered into between the City of Springfield and Sprint Corporation and the agreement entered into between AT&T Mobility and Jefferson City, Missouri, upon the City Attorney approving the form of such agreement and the City of Springfield receiving out of said agreement the release of all taxes paid prior to June 30, 2009, and sufficient additional cash payment so that the City will receive, and have available to it, the total of $10,225,361.00 by June 30, 2009."

So, in other words, provided everything worked out the way the City, staff and attorneys thought it would, and then, with the City Attorney's approval as to the form of the agreement, and if, and if, when all was said and done, the City had available the $10,225,361, they'd put that amount in the pension fund.

Though the intent was there, the $10.2 Carlson and the past Council were counting on will not be received by the City of Springfield.

Although the bill, which the sitting City Council of the day approved in March, stated, under #3 of the explanation, "The attorneys' fees and costs for the City will be paid directly by AT&T Mobility...," and noted the stated intent, that "the City's NET settlement proceeds WILL equal the amount the City underfunded the pension plan during four fiscal years (FY2004 through FY2007), plus interest," and although staff recommended approval, "of this settlement... to meet the City's net pension obligation," it all flew out the window when the actual agreement was signed and notarized.

So, what was the agreement? What "form of agreement" did the City Attorney approve? That's the easy question, you can simply read the signed, notarized agreement* between all parties.

The City will receive only $6,125,000, rather than the budget amended amount of $10,225,361, and Lowther Johnson, Attorneys at Law, LLC will receive $4,375,000. All of it will come out of a pot of $10.5 million but, technically, AT&T Mobility will pay the City's attorney fees directly, just as the ordinance indicated it would.

The tougher questions to answer are what happened to the ordinance indicated amount of $10,225,361? Why did the agreement fail to provide the net funds in an amount sufficient to cover the City's net pension obligation plus interest, as intended?

Somewhere between the passage of that bill in early March, and April 21, our fair City lost an intended $4.1 million. Our police and fire fighter pension fund lost $4.1 million and the taxpayers of Springfield, Missouri lost $4.1 million. Okay, you say, you can't lose what you don't have, that is true but, by all previous indications, the City had a tentative settlement agreement for an amount $4.1 million greater than what the City will receive.

The moral of the story: Don't count on your chickens (or duck) before they're hatched.

*Source: "Springfield News-Leader"

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

5 comments:

Stormy said...

That was the Tom Carlson City Council, they hoped that everyone else would bail them out of trouble. Ignoring the numbers and the facts and just clapping their hands so the Tinkerbell would come back to life. More and more proof what a BAFOON Tom Carlson really is.
Great Blog, Jackie, this should make for some interesting talk at the next Council meeting.
Send an email to Carl Hurd, he's love to read this.

Anonymous said...

The firm is made up of "super lawyers" who tell the City of Spfd lawyers what to do and how much public money they want.

They work in the JQH Tower.

http://www.lowtherjohnson.com/


.....Lowther Johnson Attorneys Names Super Lawyers for Second Consecutive Year

http://www.lowtherjohnson.com/news_story.asp?NewsID=43

Busplunge said...

thumbs up!

Anonymous said...

Here's what a local blogger had to say about the $10 million: City Manager Burris said he would answer questions. The Mayor asked where the ten million figure came from and Mr. Burris responded it was Mary Mannix-Decker who came up with the figure. She said the figure came from the fiscal reports ending FY 2008 plus interest that accumulated during that time.

Vote passes 9-0. The Council members and staff applaud.

I think I am going to be ill.

Anonymous said...

What harm is there in missing a number by only 4.1 million dollars among friends & lawyers ???

Go mary m d !!!