Is Springfield's Police-Fire Pension Plan Doomed?

Or: Take that Smoking Gun Away from that Straw Man!

The first paragraph of Sunday's Springfield News-Leader article, "Observer scours pension's past for cause of shortfall" began not as a paragraph but, as a single question:

"When it comes to the city's police-fire pension woes, how much more does the past have to offer?"

That's an interesting question, isn't it? Should past mistakes weigh into any discussion of the police and fire pension task force as they are seeking a solution to the underfunded police and fire pension plan?

In "Life of Reason," Vol. 1, "Reason in Common Sense," philosopher, essayist, poet and novelist George Santayana wrote, "Progress, far from consisting in change, depends on retentiveness. When change is absolute there remains no being to improve and no direction is set for possible improvement: and when experience is not retained, as among savages, infancy is perpetual. Those who cannot remember the past are condemned to repeat it."

The quote brought forth many variants, according to "Wikiquote," among them: "Those who cannot learn from history are doomed to repeat it;" "Those who do not remember their past are condemned to repeat their mistakes;" "Those who do not read history are doomed to repeat it," and; "Those who fail to learn from the mistakes of their predecessors are destined to repeat them."

Today's philosophers, Mayor Jim O'Neal, who has sloughed off such questions as a seeking merely to asign blame, and Pension Task Force Chairman Jerry Fenstermaker, along with many of the Task Force members, who say discerning past mistakes which contributed to the pension plan's current massive shortfall will not change or affect the recommendations handed down to the Council and, perhaps, journalist Amos Bridges, who has to ponder and ask readers to ponder how much that dusty old history has to offer, seem to disagree with Santayana.

"...that's of no benefit to the community or the task force right now," said Jerry Fenstermaker, the group's chairman. "We need to put together a plan of action ... If you go and do all this backtracking, you're not going to get to any different recommendations." - Springfield News-Leader, "Observer scours pension's past for cause of shortfall," page 1.

Present City Manager Greg Burris, while noting, "We've tried to be very accommodating and very transparent," about past history related to the pension plan, in the News-Leader article added, "If other people want to delve further, we can keep trying to go farther in layers." That's one of the reasons for the citizens task force, he said.

Certain members of the task force have, in the past, suggested that looking into the causes of the pension plan's shortfall is not a part of their charge. Again, in the News-Leader article in Sunday's paper, reporter Amos Bridges noted, "city officials and most members of the task force say that work has been done and that dwelling on the past further is a distraction."

The first charge listed on the formal "Task Force Charge" pertained to determining the scope of the problem, and later states:

"Please be aware that a significant commitment of time and effort will be required of all task force members in order to fully research the problem, analyze various options, and select one or more recommended solutions to address the problem. I encourage the Task Force to set an aggressive meeting schedule in order to permit a thorough analysis and the development of recommendations by the report due date noted above."

But, even though citizens might have expected the task force to fully research the problem and provide a thorough analysis, it appears there is an attempt being made to reduce the concerns of the citizens of Springfield who seek answers to the causes of the pension plan's shortfall to an ill thought out and immature search for a single cause (smoking gun) with the motive of finding a single boogey man to blame (hang). I believe that is a straw man argument formed to distract the public from finding the answers they deserve.

Repeatedly, in the Sunday News-Leader article it was implied that certain concerned citizens expected to find a single "smoking gun," or person responsible for the shortfall.

These are quotes and paraphrased quotes by the reporter for the News-Leader from Sunday's article:

1. "To try to pin it (the pension shortfall) down to which piece of legislation or which city official signed off on it...." - Pension Task Force Chair Jerry Fenstermaker

2. "...there is no elevator speech for how this happened -- it doesn't boil down to any one single action." - City Manager Greg Burris

3. "There's no "smoking gun," he (City Manager Greg Burris) said, and it's likely those looking for one will continue to be disappointed." - attributed to City Manager Greg Burris by News-Leader reporter Amos Bridges

4. "O'Neal said he thinks part of the motivation for the continued questions boils down to a desire to know "who are we going to hang?"" -attributed to Mayor Jim O'Neal by News-Leader reporter Amos Bridges

5. "Going forward there have been numerous mistakes made, but there's not one thing you can hang your hat on." -Mayor Jim O'Neal

6. "... If there was a smoking gun, I didn't see it." -Mayor Pro Tem Dan Chiles

7. "...right now there is no single smoking gun, unless you want to point to the election of 1958 ..." -Mayor Jim O'Neal

I do not believe anyone is looking for a single cause of the pension's current shortfall, especially not those who have spent a great deal of time and energy in examining and researching the issue.

Who does believe there is a single cause of the shortfall, a single culprit to "hang," or a single "smoking gun?" If certain entities can characterize those seeking answers in such a light, they can make involved and time-contributing citizens seem ridiculous, marginalize them, discredit them and in the process make citizens who seek answers to legitimate questions fearful of asking those questions.

In fact, Alternate Pension Task Force Member Fred Ellison's actual statements, from that same article, never imply he believes there is a single "smoking gun" cause of the pension shortfall.

"Having studied the pension plan for more than a year, he (Ellison) recently has focused on increases to the pension multiplier granted in the 1990s as a primary source of the current shortfall." -attributed to Ellison by Amos Bridges News-Leader article page 1

"He (Ellison) thinks increasing the pension multiplier -- the number multiplied by years of service and final salary to determine a retiree's monthly pension -- from 2 percent to 2.5 percent between 1991 and 1993 could account for much of the shortfall." -attributed to Ellison by Amos Bridges, News-Leader article page 2

Every citizen of Springfield who has even the smallest interest in the pension issue must resoundingly cast aside the implied strawman argument that intelligent people, who would like to understand the historical actions which caused our police and fire pension fund to become so dismally underfunded, are simply a lynch mob looking for someone to hang or a single "smoking gun" cause of the short fall.

Are such implications being made to try to shift the focus away from a complete understanding of the pension issue, including an understanding of the mistakes that were made, because our City officials, City Council, Pension Board and Police and Fire Pension Task Force find it uncomfortable to hold accountable their own predecessors?

I'm tempted to agree that Mayor O'Neal, Pension Task Force Chairman Fenstermaker and the Task Force might have a point that understanding how the pension got into the troubled state it is in today will not, necessarily, change the ultimate recommendations made by the task force but, how can we know all the contributing problems will be addressed by the recommended solution if we do not know what all of the contributing problems were?

The larger issue is the public's right to know and understand how it happened. In fact, as reported in the News-Leader article in Sunday's paper, the Mayor agreed such questions are legitimate, even as he mischaracterized the motives of those who are asking them.

"Mayor Jim O'Neal, who with Councilman Dan Chiles helped organize Ellison's meeting with city staff, said he understands the desire to find a clear reason for the current predicament.

"I think it's a legitimate question," O'Neal said. "It was attempted to be answered during the campaign but evidently not to the satisfaction of all voters.""

Some educated people believe that knowing the answers, all the complicated answers, to how the police and fire pension plan became so underfunded, and having those involved in overseeing the pension plan's management during the decline of the pension plan's funded ratio, recognize, admit errors, and take responsibility for them, would go a long way toward healing the wounds inflicted on the citizen taxpayers of Springfield so that they might be better prepared to accept and support whatever recommended and approved solution the task force recommends and the City Council approves.

And, just an aside, when are City officials and newspaper reporters going to stop playing silly games, mischaracterizing the thoughts, motives and concerns of the citizens of this city in a, seeming, effort to downplay, marginalize, and diminish taxpayer's concerns?

If, as O'Neal stated in Sunday's newspaper article, these are legitimate questions, then they are legitimate questions, period. Since I have yet to hear any citizen who has spent serious time examining the issue make any statement to suggest they expect to find a single cause or a single individual to blame for the pension's underfunding, I do not believe they exist so, why is it being suggested in what is, supposedly, a straight news report, mind you, they do exist? Who are they? Bring them, quote them.

Anyone who has spent any time at all looking at this complicated issue understands there have been many contributing causes to the pension plan's reduction in funded ratio.

Statements such as those found in the News-Leader's Sunday article were unnecessary, and served no purpose, unless it was an underlying desire to characterize those seeking answers to serious questions as some sort of fire and brimstone lynch mob looking for someone to tar, feather, and run out of town on a rail.

Hogwash! There is a very small handfull of people in this City who have taken the time to study, research and try to understand all the contributing factors that caused the pension to be in the state it is in today. It isn't necessary to tar and feather any one, and especially not those who are seeking answers to these complicated but, legitimate questions.

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Alternate to the Pension Task Force Proposes Police and Firefighter Retention Idea

Fred Ellison carbon copied me on an email he sent to the Mayor and City Council today. Ellison is an alternate member of the Police and Fire Pension Task Force. In the email, he presented a very intriguing idea for retaining police and firefighters who have reached retirement eligibility.

Following is Ellison's email:

Mayor and Council Members:

It has come to my attention that Police and Fire employees who exceed the period of employment for the maximum years of service are still required to contribute to the Pension Plan. This is a direct disincentive to any potential decision to continue their employment.

If the employee contribution for these retirement eligible employees was discontinued, this would be equivalent to an 11.35% raise and could provide the incentive for these very valuable employees to continue working for a few more years. This could be particularly helpful during the current personnel shortages in these two vital service departments.

I believe that this change is also a matter of fundamental fairness from the standpoint that when they stop receiving any additional benefits, they should no longer be required to make contributions.

Fred B. Ellison

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Involved Springfield Citizen Kick Starts City Council Discussions on Community Improvement Districts

An involved Springfield citizen spoke to the City Council under the auspices of commenting on Council Bill 2009-099. The City Council will vote on that bill at their May 18 Council meeting.

But, Fred Ellison's comments had little to do with the bill he signed up to comment on, instead, Ellison addressed points involved in the philosophical debate surrounding the more general use of Community Improvement Districts (CIDs).

Why is it important?

Well, if I may refresh your memory, back at the Council luncheon on April 28, following some comments on CIDs by Councilmen Nick Ibarra and Doug Burlison, Mayor Jim O'Neal advised City Manager Greg Burris that the Council would like to engage in a philosophical discussion on the issue of CIDs before they vote on many more of them.

"It's (the CID) an interesting political creature and I understand there's some philosophical discussion behind that," O'Neal said at the luncheon. "We'd (the City Council would) like to have that discussion before we vote on many of these."

At the luncheon meeting, a majority of the City Council voted to authorize the Mayor to sign a petition to create the Shoppes at James River (SJR) Community Improvement District. That step is a necessary, preliminary step for the creation of the SJR CID but, it did not actually create the district, that will be considered by Council at a later date. Councilmen Ibarra and Burlison were opposed to the harbinger of the creation of such a district.

Councilman Doug Burlison expressed a concern about the continuing approval of such districts' potential to have a negative effect on passage of any sort of a sales tax, which might be initiated, as a cure for the police and firefighter pension plan (See: "JackeHammer:" CID, TIF, & TDD; Tools in the City's Tool Box).

Councilman Nick Ibarra didn't like the idea that a citizen frequenting a business within a CID receives no notification they are paying a higher sales tax rate at the CID business than what they would pay at a competing business, not located within a CID (See: above noted previous entry).

In light of these future, requested discussions, having a citizen taxpayer define his own philosophical objections to the use of CIDs should be of great interest to the City Council. So, for the sake of future reference, I felt it might be valuable to lock Mr. Ellison's comments into a more accessible and permanent form.

Ellison brought up some interesting points in relation to Community Improvement Districts. He noted that only property owners within any given CID have a say in the creation of the CID; People leasing properties within a proposed CID have no voice in the creation of the district; and a CID creates a competitive advantage for the businesses within it.

"You're allowing a business, another entity, to use the taxpayer to pay for improvements on their properties," Ellison said. "That's an expense that that business no longer has to bear on itself and, therefore, it gives them a competitive advantage over other businesses that may be existing within the same line of business."

Ellison also suggested that businesses within a CID should post notice to their customers that they are paying a higher sales tax rate within the district.

"I think that businesses within a CID should be forced to disclose the fact that they're charging a higher sales tax rate than other businesses within the City of Springfield," Ellison said.

Another suggestion Ellison had was that there should be a minimum number of property owners. He noted, in the case of the CID discussed at the prior City Council luncheon, there was only one property owner, other than the City's own interest in the district.

"I don't think that's what the State statute intended," Ellison noted.

While Ellison did not note it, it could be noted that, generally, a "community" implies more than one or even two involved parties. According to Ellison, the State statute does not define how many participants must be involved in order to form a CID.

When a "community" of business owners wants to initiate a CID, it is generally initiated because it enables the property owners within the CID to ask registered voters within that district to approve an additional sales tax, specifically earmarked for developmental improvements to the property in question. Supposedly, it pertains to improvements which would be beneficial to the entire "community" zoned within the particular district.

As Ellison noted, over 50% of the property owners in both number and assessed value are required to petition to create the CID, however, only the registered voters within the CID are allowed to vote for approval or denial of the imposition of the additional sales tax within their district, though, in most or, at least, many cases, other taxpayers within the City, who did not have a vote on the sales tax rate, but, who might frequent the businesses within it, have had no say in the higher tax rate and are not notified of its existence.

In the case of the Shoppes at James River CID, there was only one property owner besides the City of Springfield, and that is why it was required that the Mayor be authorized to sign the petition calling for the formation of that Community Improvement District.

If the City Council later approves a CID sales tax initiative be placed on the ballot for the Shoppes at James River CID and it succeeds, the SJR district would use the proceeds of the additional sales tax to improve a storm water basin owned by the City, and take over the ongoing maintenance of the basin.

Without an initial 1 percent CID sales tax, Developer Tom Rankin has said he would be unable to pay the $300,000 required by the City for the developments' initial use of the basin, the improvements which would be required to it, and the ongoing maintenance they have agreed to provide for that basin.

"We can't afford to spend that kind of money without getting some return," Rankin said at the luncheon (again, see: "JackeHammer:" CID, TIF, & TDD; Tools in the City's Tool Box

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Council Candidate Nick Ibarra Raises Questions about Internal Auditor's Job Efficacy; Transparency

Councilman Doug Burlison, "If I was (Internal Auditor) April (Lathrom), I think I would want more contact with my bosses...."

"The Springfield News-Leader" endorsed another Council candidate today, the second in as many days.

Yesterday, the editorial board endorsed Fred Ellison for General Seat B. Today, they endorsed Nick Ibarra for Zone 1. I have emailed questionnaires to candidates and await their responses with plans to post the questions, answers and comments in the order in which I receive them.

I found some of Ibarra's comments interesting in light of something I have been looking at myself.

From the News-Leader endorsement of Ibarra today:

"Ibarra stresses that the city hired an internal auditor in August of 2008, yet no legislation appears to have developed to show she has made progress cutting costs or changing administrative policies. He also complains that work she has done thus far has not been properly publicized."

I have been following the process of how the internal auditor's position came about and how she was selected, as well as updating the progress and process of the position for "The Community Free Press," and now, that work continues here at "JackeHammer."

From the outset, at the recommendation of the city manager, the Council determined their Finance and Administration Committee would oversee Ms. Lathrom's work and be the line of communication between her and the non-committee members among the City Council. There was however, always the understanding that any and all Council members could contact Ms. Lathrom at any time but, once the internal auditor's Policies and Procedures were adopted by the City Council on November 10, 2008, (see Council Bill 2008-322/ORD25510), it was determined it would take a majority of Council to request an audit not listed on the approved audit work program. Individual Council members have no individual authority to make changes to her work plan:

"Individual members of City Council shall have unrestricted authority to meet at any time with the Internal Auditor but shall have no authority to direct the Internal Auditor to alter the audit work plan without approval by a majority of the City Council."

Lathrom, according to the Policies and Procedures adopted, is to attend Council luncheon meetings, the City Manager's weekly executive staff meetings, and when requested by the Council, Monday night scheduled Council meetings.

Lathrom attended the meeting the night the Council approved her Policies and Procedures.

As far as what she has been working on since her hiring, one of the first things Lathrom attended to was the approval and recommendation of the Finance Department's Financial Control Procedures. In a "City Finance Update" I provided to readers in the October 22, 2008 issue of Community Free Press, the following information was provided:

City Council Adopts Control Procedures

"Springfield Finance Director Mary Mannix-Decker introduced written financial control procedures to the Council's four member Finance and Administration Committee on August 29. The committee unanimously voted to submit the procedures to City Council for adoption.

The City Council then unanimously adopted the (financial control) procedures at their September 29, 2008, Council meeting.

The procedures address several issues noted in last year's state audit report.

"...the city's Finance Department has not developed adequate procedures to ensure some departments are properly recording, reporting, and transmitting city monies," the report stated. It recommended, "the City Council ensure adequate controls and records are in place in all city departments to properly account for all monies received."

The newly established procedures address cash handling, grant application and administration, payment of invoices, petty cash and change funds, and guidelines for purchasing card credit limits.

Memorandums from the city manager's office also addressed travel expense considerations and meal and refreshment expenses.

"I've looked through them and I think they do a pretty good job of providing employees with some good guidance on how to approach some of these issues," Council's internal auditor, April Lathrom said, before the Council adopted the written procedures."

September 29, 2008 City Council Meeting Minutes confirm Ms. Lathrom was in attendance to share her opinion regarding the financial control procedures:

"April Lathrom, Internal Auditor, gave a brief description of the proposed. She noted the Financial Control Procedures were created due to concerns raised during the State audit. Ms. Collette welcomed Ms. Lathrom as a new City employee."

I attended a Missouri Liberty Coalition meeting last night, the topic of discussion was the City Council Agenda for Monday night, March 23. One of the items discussed was COUNCIL BILL 2009-059, a special ordinance adopting the Internal Auditor’s General Audit Program and Independence Statement.

There was some concern about the proposed basic audit procedures within the Auditor's General Audit Program and Independence Statement.

After the report is finalized, Lathrom, in Council bill 2009-059, proposes to:

"Contact City Clerk to arrange for a closed meeting of the Finance and Administration Committee. Forward a copy of the confidential draft report to the City Clerk for distribution to the committee members. Notify Mayor and remaining Council members of Finance and Administration meeting."

The intent is to meet with the Finance and Administration Committee in closed session to discuss the draft audit report and once approved by the committee public release would be coordinated with the Public Information Office, "A copy of the news release along with the final report will be forwarded to all council members and the city manager. The report will also be made available to the public at this time," the document states.

That action seems consistent with the Internal Auditor's Policies and Procedures, as reported in CFP's October 22, 2008 issue:

"Once an audit is completed Lathrom will distribute a written report to the Council and the city manager. While her working papers are closed records protected under state law, the final report will be available the the public."

If one will refer back to the Auditor's Policies and Procedures approved November 10, 2008, one will find under the heading, "Management Response" these words:

"After receiving the management response, the Internal Auditor will incorporate the management responses into the final report. This report will be sent to the management of the audited entity for final review. The final report will then be presented to the Finance and Administration Committee of the City Council and then upon recommendation of the committee forwarded to the full council for acceptance."

So, while the meeting with the Finance and Administration Committee of the City Council is not identified as a "closed meeting," in the auditor's Council approved policies and procedures, it shouldn't be a surprise there will be a meeting with the committee and, perhaps it wouldn't be out of line to question the omission of that meeting being closed from her original document?

I also believe Ibarra raised a good point. According to the News-Leader report, "He also complains that work she has done thus far has not been properly publicized." Possibly, it hasn't been publicized because unless initiated by Lathrom, herself, no one is following up with her regarding her accomplishments?

I've been asking about that, myself, because I tried to track when the last meeting of the Council's Finance and Administration Committee was held, and the last meeting I could confirm occurring happened in late November or early December of 2008.

Since Councilman Doug Burlison is a member of that committee I emailed him to inquire as to the regularity of Finance and Administration (F & A) Committee meetings. Burlison responded, "There is no regularly scheduled F & A Committee meeting."

So, I followed up with Burlison, asking: Since the Committee is responsible for tasking and communicating with Ms. Lathrom, and her employment is so new, wouldn't it make sense for the Committee to meet a little more regularly just to check in with Ms. Lathrom?

And: It just seems that, since this is a new position and a new charge of the Council and the F & A Committee is the one charged with that direct communication with her, that there would be a benefit to more regular meetings to find out how her work is proceeding, etc.?

Burlison agreed but suggested he might be waiting to make changes until after the new City Council is in place, "I feel that we do not interact with April enough, however, that is an issue I'd rather attack with 4 or 5 fresh faces," Burlison wrote. He indicated he doesn't believe there is a communication problem, per se, "I'm not suggesting that there is any kind of communication problem, I just feel like we are not doing enough of it. If I was April, I think I would want more contact with my bosses, as well."

Burlison said calling the Finance and Administration meetings together is primarily the job of the City Clerk's office. "I believe that it is mainly a function of the city clerk's office that actually arranges schedules and "calls" committees into action. As far as who makes the determination of what issues fall under certain committee umbrellas, the city manager makes the actual decision based on council (and in reality, mayoral) input," Burlison said, "The council/mayoral input is generally required only on "new" issues."

It seems there is a lot riding on the new City Council. At a recent City Council meeting, Councilman Dan Chiles suggested he would prefer to stall in regards to the forming of the Police and Firefighters Pension Plan Task Force until after the City Council election in early April, so that the new City Council could decide who would sit on that Task Force.

Update: I just received the tentative agenda for this Tuesday's City Council luncheon. On the agenda is listed: "State Audit Status Report - April Lathrom" so, that'll be interesting. :)

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...On the Job Hunt and Some Other Stuff...

It's very exciting!

On the one hand looking for work can be discouraging. On the other hand, it's like the sky's the limit!

I can do anything I want to do!

I can write about anything I want to write about or nothing at all!

Woo hoo!

By the way, the new City Council Agenda is out for Monday's meetin,' and candidate for City Council General Seat B, Fred Ellison, sure got a glowing endorsement from the News-Leader today. Good for him!

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Council Candidate Support Continues to Grow for Alternative Pension Funding Plan

City Council Candidate Fred Ellison announced in a press release, he will support the police and firefighter pension funding plan offered as an alternative solution to the City of Springfield's recently failed 1 percent sales tax. Ellison is running for the City Council General Seat B position.

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Fred B. Ellison
City Council Candidate
General Seat B

N E W S R E L E A S E
March 9,2009


For Immediate Release



Fred B. Ellison, City Council Seat General B Candidate, is pleased to announce his support of the ‘Save Our Springfield’ Citizens Coalition proposal to stabilize the Police and Fire Retirement Plan. This proposal would require the City of Springfield to allow the ¼ percent Capital Improvement Program sales tax to sunset in 2010 and request from the voters authorization for a ¼ percent sales tax for the exclusive purpose of funding the Police and Fire Retirement Plan.

This proposal would not require any tax rate increase and would assure that the City of Springfield is able to make the actuary required contribution to the plan over the next five years. The amount of funding provided by the ¼ percent Pension Sales Tax would be approximately $10,000,000 per year.

This proposal will provide the time needed to develop a comprehensive solution to the financial problems of the Police and Fire Retirement Plan, allow the values of the investments in the Plan to stabilize, and provide time for settlement of the telecommunications sales tax litigation which should be contributed to the Plan.





Contact: Fred B. Ellison
City Council Candidate, Seat General B
417-234-4437

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JackeHammer is pleased to publish news releases on behalf of any Council or Mayoral candidate who makes them available.