City pension solutions not 'pretty'

By Barry Horstman, Cincinnati Enquirer, April 17, 2010

 

Needing to find hundreds of millions of dollars to stabilize the troubled Cincinnati pension system, a task force is poised to send City Council options seemingly destined to be as unpopular with taxpayers as they will be with current city employees and retirees.

 

After an eight-month study in which dozens of potential funding scenarios for the $2 billion pension system were examined, revised and re-examined, task force members are ready to forward, perhaps as early as this week, several plans they acknowledge are as financially painful as they are politically unpalatable.

I think this is what the rebuttal to the "Cincinnati is going to be like Chicago when I'm 80" editorial was trying to say.

 

There needs to be a good mix of economic realism and youthful exuberance.

City of Cincinnati's pension task force still seeking a solution

By Barry M. Horstman, Cincinnati Enquirer, April 20, 2010

 

Unable to lift itself from the morass of the Cincinnati Retirement System, a task force Tuesday continued to struggle to find ways to stabilize a city pension plan that last year spent nearly $13 million more each month than it took in through contributions.

 

Still not ready to turn the thorny issue over to City Council, the 11-member task force began refining a draft of its report on the troubled state of the $2 billion pension system, tweaking the voluminous statistics on benefits and costs that ultimately could change the lives of city retirees, employees and taxpayers.

I think this is what the rebuttal to the "Cincinnati is going to be like Chicago when I'm 80" editorial was trying to say.

 

There needs to be a good mix of economic realism and youthful exuberance.

No. That editorial was trying to say that economic development should only be a focus after crime is dealt with...which sounds nice but it doesn't work that way.

I know new City employees have the choice of joining the City pension system or OPERS (Ohio Public Employee Retirement System).  OPERS is very solid. All other Counties and Cities use OPERS.  Cincinnati should phase their separate system out.  Why does Cincinnati even have it's own system?

One of the great ironies is that the shrinking of city gov't has made this much worse. For instance, all the summer lifeguards have to pay into the system (they've got my dough), but they've shrunk that labor force by quite a bit over the last 15 years and thus less high school paying. It sounds like similar goings-on throughout the system.

I know new City employees have the choice of joining the City pension system or OPERS (Ohio Public Employee Retirement System). OPERS is very solid. All other Counties and Cities use OPERS. Cincinnati should phase their separate system out. Why does Cincinnati even have it's own system?

There's no way that this is true.  They wouldn't shrink the base of paying members, not to mention it would be in the article (probably under reasons that it's not doing well).

^Well, I know it is true, if you have already held another gov't job, and have already contributed to OPERS.  I guess I don't know if it is true if you are fresh to the gov't sector.

Okay, i could see that happening, but that is a very specific circumstance and probably doesn't reflect most of the new employees.

Pension vote may be 'deal killer' for water district

By Barry M. Horstman • [email protected] • August 18, 2010

 

http://news.cincinnati.com/apps/pbcs.dll/article?AID=/AB/20100818/NEWS0108/8190341/

A Tea Party group wants to change the Cincinnati pension setup with a simplistic ballot measure.

We need to get out of the pension scheme, or seriously reform it but this plan would leave the city having to pour tons of cash into the fund for a number of decades - til all the current employees died.

 

http://news.cincinnati.com/article/20130721/NEWS/307210046/Vote-sought-pension-reform

Sorta like the poison pill Congress made the Postal Service take to make government look bad?

Fishwarp takes a look at the folks behind the ballot initiative. A shady lot from out of town/out of state. Their ignorance of what they are doing is alarming.

 

"Cincinnati for Pension Reform is mostly former tea partiers who have no agenda beyond addressing the $862 million hole in the city’s pension fund, according to Chris Littleton, a West Chester resident working with the committee. He was a co-founder of the state tea party umbrella group Ohio Liberty Coalition."

"The Cincinnati for Pension Reform committee has just three formal members – Burr Robinson, Dan Lillback and Bill Moore – who live in Cincinnati, as required for committees proposing charter amendments."

 

http://news.cincinnati.com/article/20130815/NEWS010602/308150037/EXCLUSIVE-Just-who-behind-new-city-pension-referendum-

I have always wondered if there was a way to sweep Cincinnati pensions into OPERS.

even Slitherman is opposed to the amendment unofficially endorsed by CO  .

 

http://www.citybeat.com/cincinnati/blog-4972-pension_amendment_has_no_council_support.html

Hopefully without a prominent figure in local politics this issue goes down easily. I'm not too worried about it (though the consequences seem drastic)

I have always wondered if there was a way to sweep Cincinnati pensions into OPERS.

 

I've heard that OPERS doesn't want our unfunded liability.

 

Hopefully without a prominent figure in local politics this issue goes down easily. I'm not too worried about it (though the consequences seem drastic)

 

I tend to agree. Even the politicians most likely to demagogue the pension issue are opposed to this amendment.

Supporters are just now organizing a campaign committee.

http://cincinnati.com/blogs/politics/2013/08/22/pension-amendment-campaign-committee-formed/

Forgive me.  I'm not really up to speed on this issue, and reading the links provided didn't tell me as much as I'd like.  So, what's the problem with this plan?  My initial reaction is to oppose it, but only because of who is actually proposing the idea.  What's the downside for the city?

If you quit having people pay into the system cold turkey, the city has to pay the gap for existing receivers & future receivers of the pension plan.

it would actually make the gap worse & require more money from the city than the current system.

A gradual moving away from the pension system would be best but thee's no pretty way to do it.

City negotiators of the past have probably made the pension plan to plush but that would take a time machine to fix.

Most of the current gap comes not from city donations but the recent market collapse.

The city had an independent committee look this over & their report was complicated. The people proposing this amendment have been clear - they have not put much thought into it.

I know this plan is just plain terrible, but would this be something that would cause a ton of short term pain, but ultimately make the system solvent?  I can't imagine a scenario where politicians would ever, ever address this problem until some thirty years or so from now.  At that point, the city would face an equally terrible or worse situation.  I'm sure those involved with the ballot initiative were driven by the same thoughts/concerns.

When we look north of Ohio’s border to Detroit, it is difficult to remember that it was once at the leading edge of American industrial dynamism. Today, it is a shell of its former self. The reasons for this rapid fall into economic decrepitude and insolvency are multifaceted, but one piece of the tragedy’s puzzle is the city’s massive and unsupportable public sector pension liabilities.

 

Cincinnati, another proud Midwestern city, has not fallen into the same pit as the Motor City, at least not yet. However, the long-term problems surrounding its pension system’s growing unfunded liabilities echo Detroit’s and should worry everyone in the Queen City. As a new study from the Buckeye Institute shows, Cincinnati’s current public employee retirement plan, the Cincinnati Retirement System (CRS), is far worse than many think.

http://news.cincinnati.com/article/20131008/EDIT02/310080006/Pension-debate-pro-Reform-needed-save-system?odyssey=mod|newswell|text|FRONTPAGE|p

The pension liability in it's entirety is $2,100,000,000

or is that 80% ?

Is the pension liability actually $2,625,000,000 at 100% ?

That is, are we $870,000,000 short or only $420,000,000 ?

 

http://news.cincinnati.com/article/20140121/NEWS/301210081/Railway-sale-proposal-tabled

EXCLUSIVE: Cranley calls for court to settle pension fix

 

Cincinnati Mayor John Cranley told The Enquirer on Tuesday that he is asking City Council to put the future of the city's beleaguered pension system into the hands of a federal court. The goal is to mediate a binding settlement that would ensure the long-term future of the plan – and shore up Cincinnati's finances.

 

The pension situation is the city's "biggest threat outside of a terror threat," Cranley said, adding that it will probably entail pain for city coffers as well as current workers and retirees.

 

If council doesn't approve the proposed mediation, Cranley said, the city is facing further reductions in the city's credit rating - driving up costs to borrow and hurting Cincinnati's national reputation. The top U.S. bond rating agencies – Moody's and Standard & Poor's – are visiting the city later this month, and new ratings are expected by next month. Moody's already reduced Cincinnati's credit rating last summer, primarily over concerns with the pension plan.

 

Cont

 

"The alternative is that we head down the same road that Detroit did, and you see what happened there," said Cranley, referring to Detroit's bankruptcy filing last summer.

 

The pension situation is the city's "biggest threat outside of a terror threat," Cranley said

 

Well, at least he's being reasonable and isn't just using scare tactics.  Oh wait.

 

 

If council doesn't approve the proposed mediation, Cranley said, the city is facing further reductions in the city's credit rating - driving up costs to borrow and hurting Cincinnati's national reputation.

 

"Yes, this would take the control out of the hands of the City Council ... but we've had 10 years to deal with this, and we haven't," Cranley said in a meeting with Enquirer editors and reporters. "It's up to leaders to lead and we have a clear and present danger in front of us right now. This would bind the city to a long-term agreement that would keep our pension plan.

 

It's hilarious that he pulls this BS after killing the parking lease, $30M of which would have gone toward making the pension plan solvent.  I still can't believe that anyone voted for this lunatic.

^parking leases are a horrible deal for cities

 

why not have the pension plan make itself solvent, the way other private unions do, like construction trade unions or Teamsters, etc.  IE, charge members the appropriate employee contribution during work years in exchange for years of retirement income, cost of living adjustments, rising healthcare costs....

^parking leases are a horrible deal for cities

 

why not have the pension plan make itself solvent, the way other private unions do, like construction trade unions or Teamsters, etc.  IE, charge members the appropriate employee contribution during work years in exchange for years of retirement income, cost of living adjustments, rising healthcare costs....

 

The pension fund was damaged by Cranley himself back in 2003, when he took $50 million out during a year that saw 29% returns.  The trustees sued to stop Cranley and they lost, then Mayor Luken had one of the trustees' offices ransacked. 

 

The pension was wrecked on purpose.  Politicians like Cranley thrive on crisis of their own invention. 

 

 

I think the parking lease was flawed. Why not fix what we have before outsourcing it? Lexington, Kentucky did that with LexPark, a city-operated program, that had 50 new pay-and-display meters installed and the upgrading of 850 stand-alone meters. The meters were upgraded to accept credit cards (this was done in 2008, and smartphone compatibility did not exist). Meter rates were increased from 25 cents to $1. LexPark brought in $1 million in 2009; 2008 was just $428,000. For FY 2009, there was a $100,000 surplus. LexPark's system is derived from the Republic Parking System, which allowed for more efficient citation writing and collection, jumping from 20,000 to 50,000 citations in one year, and a collection rate increase from 70% to 80%.

 

http://www.kentucky.com/2009/09/08/926112/parking-program-a-financial-success.html

I don't want to turn this into a debate on the parking lease.  Just pointing out that it is completely disingenuous for Cranley to claim that "we've had 10 years to deal with this, and we haven't" when he's the one that just killed the plan that the previous council had put in place to try and address this.  Not to mention that he killed that plan citing his concern that city council would lose control of the parking assets, yet he seems to have no concerns about city council losing control of the pension plan.  Basically, he has no plan to fix it, so he's going to let a federal mediator sort it out.

The pension fund crisis is interesting.  Obviously there are fewer public employees to pay into the system, but the stock market has now rebounded to it's highest levels.  The investment gains can't make up for the declining head counts?

The pension fund crisis is interesting.  Obviously there are fewer public employees to pay into the system, but the stock market has now rebounded to it's highest levels.  The investment gains can't make up for the declining head counts?

 

The healthcare costs are much higher, former employees are living longer, fewer people paying into the system due to 2008-09 cutbacks.  Those people who did remain employed received fewer raises, therefore were paying less into the system.  Everything that could swing in a bad direction did. 

 

 

 

Why doesn’t Cincinnati City Council just pass a pension reform ordinance?

Chris Wetterich Staff reporter- Cincinnati Business Courier

 

 

Back in September, the Cincinnati Retirement System board recommended a solution to Cincinnati’s pension debt that included many of the elements Mayor John Cranley wants to get at the negotiating table with retirees and employees in federal court.

 

Cranley and council could pass a plan tomorrow that reduces retirees’ cost-of-living increases, freezes them for several years and makes a one-time, lump-sum payment to shore up the system.

 

http://www.bizjournals.com/cincinnati/blog/2014/03/why-doesn-t-cincinnati-city-council-just-pass-a.html