City Council Gets Briefing on Pension Systems and Financial Obligations

The City Council had a study session yesterday to discuss the status of the employee pension systems and the financial obligations of maintaining these systems. I have posted a copy of the presentation on the blog which readers can download for their own review.

There are some basic facts that everyone needs to keep in mind:

• Pensions are legally binding contracts between the employee associations and the city and cannot be changed without agreements from both sides. Kinda like a contract to buy a car. The dealer cannot suddenly change the terms and conditions of the contract or the dealer can be sued for breach of contract.
• Pension obligations are outgrowing the city's revenues. Unless the city figures out a way to reduce these obligations or to increase revenue to pay for them we will continue to cut services in order to balance the budget. (A balanced budget is required by law.)
• Increased pensions were given several years ago instead of salary increases.
• The average pension given to a public safety employee is $48,000 a year.
• The average pension given to a non-public safety employee is $21,000 a year.
• Both pensions are given after 25-30 years of service.

The City Council gave direction to city management to begin talking with all the employee associations about how we can reduce our current deficit -- including discussing options to reform pensions.