March 3, 2009

GASB 45 panel recommends status quo

Brushing aside claims that tapping excess city pension cash could save taxpayers millions, a panel investigating the issue recommended Tuesday that officials put the idea aside for now.

Three of the GASB 45 Committee’s members voted against shelving the concept, but all four of the municipal union members serving on the panel said they want to stick with the status quo for the time being.

Mayor Art Ward said the panel’s choice makes sense give the turbulence in the stock market these days. But, he said, that if the funds become flush again, the proposal would be viable.

“It’s always going to be a topic of consideration,” Ward said.

Union members said they’re not necessarily opposed to using small amount of surplus pension cash to help pay for the health care of retired city workers.

But, they said, they don’t want to risk undermining the three pension funds that still hold tens of millions of dollars more than the city anticipates it will need to pay off pension promises, even after the wild plummet of the market during the past six months.

“We all know the economy is drowning,” said city Finance Chairman Rich Miecznikowski, one of the three committee members who wanted to push ahead with the idea of using the excess money.

“It would go a long way with helping us with the mill rate,” Miecznikowski said.

T. J. Barnes, the panel’s chairman, said that Bristol and many other levels of government have “made a lot of promises” to government workers “and we don’t necessarily fund those promises properly.”

Though Bristol has done a stunning job of funding pension obligations – it’s one of the best funded municipal pension plans in the country – it hasn’t set aside much of anything to pay for a decade’s worth of health care guaranteed to retired city employees.

Comptroller Glenn Klocko said there is $1.4 million earmarked for the fund, but he hasn’t yet moved the money into an irrevocable trust to begin creating a cushion for the future.

He said he wanted to see what would happen with the GASB 45 issue first, because if the city used surplus pension cash, it could use that money for something else.

Barnes warned that if the city can’t figure out how to get the $72 million or more it will need to pay future health care claims – a figure that rises annually – there’s always a chance it will be forced to renege on the deal.

“If people can’t hang on to their homes,” Barnes asked union officials, “then how do we pay for your health care?”

“It’s one thing to promise to pay something. It’s another to pay it,” Barnes said.

But several union officials said they have tried over the past decade to work out a deal with the city to start funding a health benefits fund that would begin to set aside the necessary funds. The city hasn’t been willing to take the proposals seriously, they said, so they never got anywhere.

There is still a chance the City Council will take up the proposal despite the GASB 45 panel’s recommendation. There are at least two councilors who want to pursue it.

What is GASB 45?

It is a reporting requirement that calls for cities and towns to lay out the post-retirement employment costs they have taken on. It also asks that they say how they intend to fund the expense.

There is no rule that municipalities take any concrete action, but Bristol officials say they don’t want to ignore the problem and stick taxpayers in a decade or two with massive bills for costs that could be dealt with sooner.

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Copyright 2009. All rights reserved.
Contact Steve Collins at scollins@bristolpress.com

28 comments:

Anonymous said...

Who brought the donuts?

Anonymous said...

There for of the on the panel already.

Anonymous said...

An oppertunity to save tax payers millions of dollars sqwandered by the unionites. How shaming and insensitive and out of touchare they?. If they approved this move they could have been hailed as great benefactors of the community they serve. Instead they snubbed the taxpayers for their own greed.

Nice job Wardie boy...you can now count on all your union support as you have CLEARLY jumped into their pockets. Oh and leadership to do what is in the best interest of tax payers is NOT your way of governing. Blurred vision?...how about blind ignorance and greed?

Anonymous said...

Rational move in this time of turblence, especially when even the city side is not clear on the facts!

Anonymous said...

Poor Ken, all that foot stomping and name calling for nothing....

Anonymous said...

With the panel chosen, did you really think it would come out any differently.

Anonymous said...

Ward once again showing who he's working for! Good old Union boy Ward!!

Anonymous said...

Its my hope that the real true councilmen working for the good of Bristol will overturn this.

Those who continue to work for the good of the unions will vote against this!

Anonymous said...

While this concept may have its value, as I see it, the city has handled its evaluation of it in a totally inept manner: quite like other projects lately.

Anonymous said...

I gather that Johnson wasn't there, as it wasn't televised.

Or did he have someting more important?

Anonymous said...

did anyone really have any doubt about what the outcome would be. This was set up to fail from Ward! After all, it's a election year and he has to pander to his union boys!!

Odin said...

“It’s one thing to promise to pay something. It’s another to pay it,” Barnes said.

Not true, Tom. If the City promised it, then nothing short of going into receivership like Waterbury will stop the City from honoring it. No ifs, ands, or buts.

Anonymous said...

Barnes, is is a contract! What part of that don't you understand?

Maybe this is why Johnson is so off base, and why the R's are simply not competitive.

Anonymous said...

Just another example of how the union runs this town.

Anonymous said...

6:53

The union runs this town because there are not enough people supporting those who challenge them.

Where were you the past elections????

Anonymous said...

IF the City Council over rides the GASB Committee, and IF they then have to negotiate, and IF they cannot come to an agreement, will it go to Hartford which will side withthe union.

Ths City Council should have this answered BEFORE they consider an override.

Anonymous said...

the Panel had better watch out: Johnson will get you!

intheknow said...

"IF the City Council over rides the GASB Committee"

The council never needed the blessing of that committee. All they needed was a little leadership from Ward. Nobody on the council, including Ward realizes how many options are being ignored because they are listening to bad advice from Klocko and his buddy, (Bruce Barth). There are win -win options available that would satisfy labor and management if only Ward would start listening to the right people.

Anonymous said...

"IF the City Council over rides the GASB Committee, and IF they then have to negotiate, and IF they cannot come to an agreement, will it go to Hartford which will side withthe union."

If it were up to Hartford, (the governor) the pension fund would be emptied into the general fund tomorrow. It is not up to Hartford, it is up to Washington D.C. (federal law) which would definitely side with labor on this issue.

Anonymous said...

"IF they then have to negotiate, and IF they cannot come to an agreement, will it go to Hartford which will side with the union."

If you are talking about arbitration, that system is stacked against labor. Municipalities can reject an unfavorable decision, but labor cannot. Additionally, the longer the arbitration process takes, the less it costs the municipality. Retroactive awards save municipalities money. Look at the estimated wages in the budget and compare them to the recent agreements. They have the awards already calculated into their tax rates and they earn interest on those awards until they are paid. Don't expect this issue to ever be put into the hands of arbitrators in Hartford.

Anonymous said...

8:14

I agree:

In addition to Ward, Kloko is a BIG part of the problem.
Unfortunately Ward is not to up on this so he listens to Kloko, and doesn't question.

Ward has let Kloko have too much power. But I am not surprised.

Anonymous said...

Ward isn't getting his information from Klocko. He gets it from his union buddies.

Anonymous said...

You mean the ones on the police force who got a 700% increase in their prescription copay and the highest insurance copay in town? Or his buddies on the fire dept. who are in binding arbitration? This blind hatred of organized labor boggles my mind. Wake up you ignorant fool before we all become slaves.

Anonymous said...

"Ward isn't getting his information from Klocko. He gets it from his union buddies."

Klocko is the engineer of this whole scheme. It started with his misleading and inaccurate power point presentation and ended with the silly reorganized GASB committee that didn't include him due to his conflict of interest, meaning the fact that he holds the purse strings of the city and is also a member of the pension board. He was , in effect trying to use money from an irrevocable trust created to benefit a certain group purely to lower the tax rate. I am surprised the city treasurer was kept on since he has the same conflict.

Anonymous said...

Damn right Ward is protecting us and getting information from us. It is our money and he is smart enough to see this.

Why shouldn't he work with us? We are voters and taxpayers too. We campaigned for him and voted him in. If you want someone else then step up. People call it pandering, but what it really is is working for your constituents.

Thank god for Art Ward!

Anonymous said...

"Damn right Ward is protecting us and getting information from us. It is our money and he is smart enough to see this."

I don't think Ward is even smart enough to SPELL G-A S-B, never mind understand it.

Anonymous said...

Remember, we elected him.

Anonymous said...

"While this concept may have its value, as I see it, the city has handled its evaluation of it in a totally inept manner: quite like other projects lately."

Correct. The focus and objective are all wrong. The focus has been on satisfying GASB when it should have been on the improvement of the retiree health care system. The stated objective, to lower taxes, conflicts with the language of the negotiated pension agreements and the nature of irrevocable trusts in general. Again, the objective should have been the overall improvement of the system. If the focus and objective had been the same, everyone would be satisfied, including GASB. The big problem is Klocko. He has an axe to grind and I believe it has to do with his ego. He thinks if he can somehow put this together by bending the rules and squeezing every dime out of the thing for the city, he will be looked at by his peers as some kind of accounting genius. Barth just tells him what he wants to hear and gets paid big bucks as Klocko's legal yes man. In every favorable opinion he gives he has to stretch common sense to it's limit, when the opposite view is as plain as day. The whole thing is going nowhere and millions in tax savings are unrecognized. Mr. Ward please step up and start doing your job. You are supposed to be telling Klocko what to do, not the other way around.