Don't hit taxpayers up for cash the city already has in its pension fund, Cockayne urges

With city pension funds bulging, a Republican city councilor says it doesn’t make sense to sock taxpayers to fill a new trust account to cover the future health care of municipal retirees who won’t ever need all the cash that’s already piled up in City Hall’s retirement funds.
Shifting the excess retirement money into the health care account would create “a huge savings for the taxpayers,” said city Councilor Ken Cockayne.
He said he asked the city’s Ethics Board about whether three council colleagues who might collect from the account whether the trio should be allowed to participate in the decision about whether to make the change in large part to push the whole issue onto the front burner again.
The city needs to sock away about $77 million to pay health benefits for its workers when they retire, said city Comptroller Glenn Klocko. It has only $1.1 million in the account so far and plans to add $200,000 more this year, a figure that’s slated to rise 25 percent annually for the next three decades, he said.
Cockayne said that in the long run, the new fund would cost taxpayers about $2 million annually, and for no good reason.
The consultant from Merrill Lynch who has overseen the stunningly successful investments that have led city pension funds to be so flush is among those who have advocated taking money from the more than $500 million in pension accounts and paying what’s needed into the new health benefits account, an idea that Klocko has also supported.
But Mayor Art Ward said he’s not sure it would be the right move.
“Are we in essence robbing Peter to pay Paul?” the mayor asked.
He said the city needs to “proceed cautiously” because the funds have the potential to make such a difference to taxpayers, city workers and retirees, particularly if the pension funds were to take a big financial hit someday.
“We need to make sure we make a qualified decision and it’s not an emotional one,” Ward said.
Cockayne said that all of the experts who look after the city’s money – actuarial professionals, consultants, labor lawyers and others – have told him that shifting the excess pension money into the new account is the best move.
“The opposition is coming from the unions. The unions are bucking it, saying this needs to be negotiated,” said Cockayne, who points to federal and state rulings that say the city can make the change without union consent.
City union officials have said they’re not necessarily opposed to the idea pushed by Cockayne, but they believe that it can’t be done without the union’s consent. They concede that getting a green light from the unions almost certainly means the city would have to offer something in return.
Among the possibilities, they said, are guaranteed cost-of-living increases in pensions or an extension of the 10-year period in which retirees get municipal health care. But nobody’s locked into anything in particular.
Cockayne said he doesn’t think the unions should get anything. He said it’s up to the city alone to decide whether to pump retirement cash into the new health benefits fund required to meet the GASB 45 accounting standard.
“I have every intention of forcing this issue,” Cockayne said. “This is an issue we need to address.”
Cockayne said that families in Bristol are living paycheck to paycheck, struggling to cope with rising utility costs and tax bills that keep rising. This is one way, he said, to ease their burden a bit without hurting anyone.
The unions “are trying to hold the city hostage,” Cockayne said, with their demands to get something in return for their agreement.
“It’s time for them to give back a little and do what’s right for the taxpayers of this town, the taxpayers who are paying their salaries,” Cockayne said.

Ethics ruling sought

A freshman city councilor said he fears “there may be conflicts of interest” for three of his more senior City Council colleagues to vote on issues related to the transfer of money from municipal pension accounts into a new health benefits fund.
Republican Ken Cockayne said the trio – Mayor Art Ward and Democrats Kevin McCauley and Frank Nicastro – are “directly affected by the outcome” of the issue because they or family members are set to collect some of the money.
McCauley is a city firefighter. Ward’s wife works for the Board of Education. And Nicastro, a retired mayor and truant officer, collects a city pension.
While McCauley denied that he has a conflict, Ward sidestepped the question.
“I’ll await the decision of the ethics board and I’ll abide by that decision,” the mayor said.
Nicastro, who collects a city pension, has avoided for years voting on issues that might raise questions about a conflict.
The other three councilors, including Republican Mike Rimcoski, said they don’t see a problem.
“I don’t know where Kenny’s going with this, but it has nothing to do with benefitting any of us,” said freshman city Councilor Cliff Block.
Block said the new trust fund is a mandate the city has to obey. But it doesn’t change any benefits that anyone, including councilors, will receive.
Block said that Cockayne received “a little bit of bad information on this one.”
City Councilor Craig Minor said the city “has a contractual obligation to provide certain post-employment health benefits to its employees. How it manages the cost of meeting that obligation is mere bookkeeping. I don’t think Ken understands this.”
“I’m sure all the council members know when to excuse themselves,” said veteran Republican Councilman Mike Rimcoski. “I really don’t see a problem.”
McCauley said his 2nd District colleague “has not done his due diligence on this issue and is confusing the facts.”
He said that because the fire and police retirement funds are separate and “not under consideration,” he doesn’t have a conflict.“ This is a taxpayer issue, however not the way he is presenting it,” McCauley said.
“The policy under consideration is to evaluate setting up a mechanism to allow for the funding of future liability of retirement health benefits in a way that can benefit the taxpayers,” said McCauley, a second-term Democrat. “Whether the city decides to negotiate down the road concerning the fire and police retirement funds is a whole other subject.”
Cockayne said that McCauley’s statement “is absolutely incorrect” because money would also come out of the police and fire retirement accounts, an assertion that city financial officials confirmed.
Cockayne said he figures he’s going to wind up getting yelled at again.
“I’m wondering if I’m going to get called into the principal’s office. I’ve already been called in twice” to talk with Ward, Cockayne said.
“He’s yelled at me like a 5-year-old kid because I do things in public,” Cockayne said.

Cockayne's letter to the Ethics Board

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