Should the city buy gold? Maybe

Taxpayers may soon own a serious pile of gold. The city's Retirement Board is weighing whether to double down on its investment in gold mining, buy gold itself or just quit the whole gold market entirely. Thomas "TJ" Barnes, who heads the panel, said that its investment in gold mining hasn't done well over the past two years. He said it's time for the city "get out or double down" depending on what pension overseers think about the future of the gold market. John Beirne, the city's pension advisor, said China is still buying gold at a stunning rate - hundreds of metric tons annually. "That's a lot of jewelry," he said. "There's something else behind it." Overall, Beirne said, there has been "a huge move of gold from the West to the East," but it's hard to know just why China is so interested in acquring so much of the metal. He said there's no sign the country's slowing down its purchasing. Barnes said, though, that the city's stake in mining companies is down 38 percent despite rising gold prices. He said 2 percent of the nearly $600 million is tied up in the gold mining stocks. "I'm not sold on the mining play," Barnes said. It hasn't panned out, he said. On the other hand, he said, the market might be near the bottom so it may make sense to buy more rather than getting out. Beirne said that when gold goes up, gold mining stocks should do even better. He said he would stick it out. The board agreed to look into it more next month.
Copyright 2013 All rights reserved. Contact Steve Collins at scollins@bristolpress.com

Pension money showdown looming

A showdown over a proposed grab of excess pension cash could come as soon as May 24.
City councilors are considering whether to snatch surplus pension money from the trust funds that cover police and firefighters pensions in order cover the tab for public safety retirees’ health care costs.
The city comptroller’s office has estimated the move would save $1.1 million in the coming fiscal year, which starts July 1.
Finance officials said the only way to freeze property taxes this year is to tap the surplus money.  Click here for the story.

Copyright 2011. All rights reserved. Contact Steve Collins at scollins@bristolpress.com

No pensions for state lawmakers, two GOP candidates say

Press release just issued by state Senate hopeful Jason Welch and state House contender Whit Betts:
GOP: Kill Legislative Pensions. (Bristol) Two of Bristol’s candidates for the General Assembly, State Senate nominee, Jason Welch (31st. Senatorial) and State Representative candidates Whit Betts (R-78) today issued a joint statement concerning Connecticut’s fiscal crisis.
Whit Betts, the candidate vying to replace long-time Representative Bill Hamzy mentioned that when the General Assembly was formed it was supposed to be made up of Connecticut citizens from all walks of life. “The General Assembly is a Representative form of government,” Betts continued, “Our founding fathers never intended for it to be a career position.”
Welch echoed Betts sentiments.
In the joint statement, the candidates are advocating that if they are elected to the General Assembly next month they will introduce legislation to remove members of the General Assembly from the state pension plan.
“This position at its very core is a part time position, “Republican state senate candidate Jason Welch added, “If it’s a part time position then why should the members of the General Assembly receive a pension?”
Betts added that the move would help save pension funds over the years. “This General Assembly has abdicated its responsibilities with regards to funding the state pension system. Betts continued, “They have turned their backs on the retirees of Connecticut and part time elected members of the General Assembly should not be receiving a golden parachute for a position that was never meant to be a career.”
The Republican State Senate nominee stated that this proposal is being put forth as an act of fairness. “Our intention is to keep the promises made to the current legislators and change it for the next class,” Welch added, “With the budget deficit near record numbers and state spending cap being shattered by the Democratic controlled General Assembly we need to lead by example.”
Betts added, “If the General Assembly cannot reduce its own spending and benefits how can we ask other state employees and agencies to do the same?”
In conclusion, Welch mentioned that this is the real difference this year between the Republican candidates and the Democratic candidates. “We are working as a team to offer comprehensive solutions to the problems facing Connecticut,” Welch concluded, we will be working together to represent the interests of our constituents – no more talk, it’s time for action.”
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Copyright 2010. All rights reserved. Contact Steve Collins at scollins@bristolpress.com

Welch says state can't keep shortchanging pension funds

Press release from Jason Welch, a Republican running for state Senate in the 31st District:

Welch: Fully Fund the Pension Fund

(Bristol) Jason Welch, the Republican nominee for the State Senate from the 31st district, today called upon the General Assembly to fully fund the State’s pension obligations and to stop deferring payments to future years.
“The General Assembly, including my opponent Senator Tom Colapietro, over the years has voted to approve state employee contracts with employee pension obligations, but deferred making required state contributions into that pension fund.” Welch added, “This has created a massive amount of debt and unfunded obligations, which ultimately puts those pensions at risk and wrongly burdens future generations. With more than $60 billion in current unfunded obligations, each Connecticut resident’s share is about $17,500.”
Welch stated that all pension funds are under-funded and that the time has come for the members of the General Assembly to meet the state’s current obligations and stop deferring the payments. “They need to stop funding their pet projects and fund the promises that they have made to our state employees and retirees,” Welch said.
“As a member of the State Senate, I will not vote for any budget that grossly underfunds current pension obligations.” Welch added, “Our children and our grandchildren should not have the added burden of paying for the promises that we made today, and our state employees and retirees deserve to know that their pensions are intact. Though the benefit structure for new employees ought to be reformed and brought more in line with private sector benefits, which is a part of my plan to control state spending, we need to keep the promises we have made to date.”
Welch’s Democratic opponent, 18 year incumbent Senator Tom Colapietro, is well known for his contention that Republicans are going to gut state government. The reality is that Senator Colapietro has been gutting union pensions to the tune of 100s of millions of dollars (200 million last year alone). Welch has called for a 7-10% across the board reduction of state costs, starting at the top and excluding understaffed and public safety agencies such as Corrections, in addition to other cost savings. That is hardly gutting.
Welch pointed out the irony that Senator Colapietro prides himself on representing the working person, yet he has routinely underfunded the working person’s pension rather than trim the fat in upper-management at state agencies.
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Copyright 2010. All rights reserved. Contact Steve Collins at scollins@bristolpress.com

Bristol stands alone

The city of Bristol may be the only municipality in the country that has an overfunded pension plan for its employees that's got enough surplus cash to shift some of it pay for retiree health care.
City Comptroller Glenn Klocko said today he's checked with all the bond rating firms, which keep tabs on municipal finances everywhere, and none of them know of another city that has such an excess in its pension fund.
The city has about $500 million socked away, at least $100 million more than it is projected to need.
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Copyright 2010. All rights reserved.
Contact Steve Collins at scollins@bristolpress.com

Cockayne urges renewed look at using surprlus pension money

With budget shortfalls looming, spending cuts likely and financial woes socking City Hall at the same time taxpayers are hurting, officials are scrambling to find ways to cope.
Solutions are hard to come by.
But city Councilor Ken Cockayne, a second-term Republican, said one possible answer is to revisit the much-debated plan to tap excess pension money to fill a new trust fund that aims to pay more than $70 million in post-retirement health care costs for municipal employees.
The move would save taxpayers $1.8 million, city officials have calculated, while simultaneously assuring municipal workers that Bristol will make good on its contractual vow to pay for 10 years’ worth of health care after employees retire.
The idea was shot down last winter by a special panel exploring the concept, mostly because city unions feared it would undermine flush pension funds.
“I feel the climate has changed somewhat and the parties involved would be willing to sit down to talk about this,” Cockayne said.
Cockayne called it “a very complicated issue,” but if the city pursues it, tapping the excess pension money “can be beneficial to everyone involved.”
City Comptroller Glenn Klocko has estimated that using excess pension cash for the health care instead of tapping taxpayers would save $1.8 million annually without risking anyone’s pension payments.
But the special city panel created to investigate it decided on a 4-3 vote not to pursue the idea at least until the financial markets settled down and the risks could be figured more accurately.
Since then, the city’s three pension funds have bounced back up.
They collectively total more than $470 million – and even at the lowest point in the market since last fall’s crash, the pension accounts always had enough money to pay anticipated claims and still have millions left over.
Bristol is one of the few cities in the country that has more than enough money socked away to pay off future pension obligations, the result of more than 30 years of investments.
Cockayne and other supporters of tapping some of the excess argue that creating a health benefits fund would make it possible to pay retirees’ health care without hitting up taxpayers for more money.
In fact, if the new fund was flush, the city could also stop paying out nearly $2 million annually for retirees’ health care. The fund could pick that up, supporters said, and the city would no longer have to come up with the cash each year.
That would reduce the pressure to raise property taxes or cut services, officials said.
But city unions argue that moving forward could jeopardize the pension funds. Some union officials have admitted privately they might agree with the change as long as employees get some additional benefits in return for taking the chance.
Plus, they point out, employees chipped in some of the money that made the pension funds flush to begin with.
It’s not clear what will happen next, if anything, but Cockayne said the issue deserves to be reexamined.

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

Rimcoski push to strip away pensions from felons moving to committee

A proposal to strip the pensions of city workers who are convicted of felonies that violate the public trust is heading to committee.

Pushed by city Councilor Mike Rimcoski, councilors agreed this week to have the Ordinance Committee consider the proposal.

“The idea of sending a check to a state prison bothers me,” Rimcoski said.

Though the city hasn’t had an employee charged with a felony related to his job in decades, Rimcoski said he doesn’t want to see a situation develop here as it has in some other towns and on the state level.

He initially raised the idea last winter, but opted to wait to see if state lawmakers would act to ax pensions of government workers who wind up behind bars.

Rimcoski said nothing happened on the measure in the legislature -- lawmakers “are not doing much of anything,” he said -- so he’s pushing it on the city level.

When he raised the plan last winter, Rimcoski said it angers him to see state workers who are accused of crimes making a quick retirement to lock in their pensions.

"You shouldn't be sending pension checks to the prisons," Rimcoski said.

The issue has been bandied about since the massive scandal that rocked the administration of former Gov. John Rowland, who resigned in disgrace and spent time in federal prison for corruption.

There haven't been any significant scandals at City Hall, but other municipalities around the state have seen workers charged with serious crimes.

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

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

GASB 45 pension grab up for vote on Tuesday

A proposal to snatch excess pension money and use it to fund the health care of retired city workers is heading for a key vote Tuesday.

The GASB 45 Committee that’s reviewing the plan that could save taxpayers as much as $2 million annually intends to make a recommendation Tuesday to city councilors who have the last word on whether to take the controversial step.

Though most insiders expect the committee to recommend the city do nothing, supporters are pushing the idea as one of the few ways the city could reduce its expenses or increase revenue without hurting taxpayers.

Ronald Mulvihill, a benefits specialist for the American Federation of State, County and Municipal Workers who based in Washington, said the move wouldn’t be as simple as its backers said.

“You have many hoops to jump through,” Mulvihill told the committee.

He said the law is complicated and that unless the city works out an agreement with the relevant unions ahead of time, the issue is sure to land in court.

Mulvihill said he has no idea who would prevail in a court battle because the provisions of the statutes governing the issue are so unclear.

But, he said, the city comptroller’s office “had it right” when it laid out the issue for the panel’s consideration. [Here is the comptroller's presentation.]

Federal law allows the city to shift money within its pension trust fund into a new account for retiree health benefits as long as the pensions remain at least 120 percent overfunded. If it falls below that, the city would have to move the money back into the pension fund, officials said.

It would remain under the control of pension fund trustees so the change, if it’s ever made, would likely not change the way the funds are invested.

The city has about $400 million in its three pension funds – for general city employees, firefighters and police officers – and about $100 million above what actuaries say it will need. But only the police and fire funds are currently flush enough to consider tapping.

Bristol Police Local 754 issued a statement last week that offered to work with the city “to get through these tough times” in the economy, but opposing “draining pension funds.”

“While it is true the city needs to address the GASB 45 reporting requirements, it is not true that this must be done immediately and it is obvious to us that taking radical measures in a turbulent economic climate is short sighted and dangerous,” the statement said.

Other city unions are skeptical as well.

Generally, the unions worry that in snatching excess cash to pay for health care benefits, the city could put its pension fund in jeopardy and perhaps set up a scenario down the road where it might renege somehow on the contractual payouts it is on the hook for.

But Republican mayoral candidate Ken Johnson said that officials have to focus on this issue because it offers a chance to secure “millions and millions in tax savings staring us in the eye.”

Mulvihill said the city should be happy that is has made “fantastic investments” over the years and put its pension fund into an elite handful of municipalities in the whole country that could even consider using surplus money for something other than paying pensions.

Even so, he said, tapping into the cash would be akin to taking out a reverse mortgage. He said it would ultimately catch up with taxpayers.

The GASB 45 Committee is named after an obscure accounting standard that requires cities and towns to figure out their future post-retirement obligations to employees and provide some inkling of how they intend to pay the money when the time comes.

Bristol needs about $72 million to cover its future post-retirement obligations to employees, not counting pensions. It currently pays out about $3.6 million for the health care of retirees, who receive municipal health care for a decade after they retire.

What’s next?

The GASB 45 Committee meets at 5 p.m., Tuesday at City Hall. City councilors may act on its recommendation as soon as Tuesday, March 10.

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

Police say hands off city pension funds

Press release from the city's police union:

BRISTOL POLICE UNION

Local #754

P.O. Box 2014

Bristol, CT  06011-2014

Email: BristolPoliceUnion@gmail.com

Website: www.BristolPoliceUnion.org

860.940.7707

 

BRISTOL POLICE LOCAL 754 OF COUNCIL 15 AFSCME

PRESS RELEASE

REGARDING CITY OF BRISTOL’S GASB 45 ISSUES

February 24, 2009

 Bristol Police Local 754, acknowledges the difficult economic times facing the nation.  The Union will work with the City to find solutions to get through these tough times but cannot support draining pension funds anymore than we would support depleting a child’s education fund. 

 While it is true the City needs to address the GASB 45 reporting requirements it is not true that this must be done immediately and it is obvious to us that taking radical measures in a turbulent economic climate is short sighted and dangerous.  Reducing the funds in this volatile economy with a market that is fluctuating wildly on any given day makes trying to hit a particular funding level a fast moving target. 

 If this plan were 100 % fully funded the City would be responsible for making payments in the millions of dollars. There is no truth to anyone’s theory that the money is just sitting there and doing nothing. As a matter of fact, the current funding levels are actually paying for the City’s costs, which is approximately 6 million dollars this year alone.

 Moving money from the pension plan to pay current medical costs will result in nothing more than passing along the costs to future tax payers.  There are certainly many other ideas that the City can consider that do not result in our children assuming this burden. 

 If the City set up a retiree health care trust fund, with money that has already been set aside, and manage and invest it with the same vigor and expertise in which it has managed the pension fund, then the issue of retiree health care would evaporate.

 Bristol needs to only look to its neighbors in Waterbury to see the disastrous effects that tampering with pension funds create.

EXECUTIVE BOARD LOCAL 754

AFSCME COUNCIL 15, AFL-CIO

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

City Council has final say on tapping pension excesses

The final say about whether to use excess pension funds to pump money into new trusts to cover health benefits for retired municipal workers will rest with the City Council.

Bruce Barth, a pension attorney, told the city’s GASB 45 Committee this week that the council would need to adopt a new ordinance laying the groundwork for the change that some officials say could save taxpayers tens of millions of dollars.

Named for an accounting rule, the GASB 45 Committee is supposed to examine the issues surrounding the proposal and recommend to the council what course the city should take.

Some union officials have said there are legal complications the city needs to take into account. They also argue that any revision to the existing pension funds should be negotiated rather than dictated by the city.

Barth said the potential shift of money into the new funds for retiree health care “may be negotiable,” but doesn’t have to be.

The basics of the plan are pretty simple.

Under federal law, the city can shift money within its pension trust fund into a new fund for retiree health benefits if the pensions are more than 120 percent overfunded. If the pension fund falls below 120 percent of expected funding needs, the money would be automatically moved back to cover pensions, Barth said.

In any case, the money would remain under the control of the pension fund trustees and would not actually be removed from the fund at all.

Because all the pension fund’ money would be invested as if it was part of a single fund, Barth said, it’s largely an accounting procedure to keep them separate on paper.

City employees would get something out of it, officials said.

Barth said that if the city makes the move, every city worker at the time it’s done would be automatically vested in the pension fund and the city could not change the health benefits it offers retirees for five years.

City Comptroller Glenn Klocko said that taxpayers would gain substantially if the city can do it.

As it is, he said, the city pays out $3.6 million for the health care of retirees, who receive municipal health care for 10 years after they retire.

To get ahead and cope with future  demands on the health care system, Klocko said, the city needs to put another $5 million aside annually or it could put $72 million aside all at once.

That’s a tall order for most municipalities, but Bristol has pension funds that are so flush it may be able to do that.

The pension funds this week total about $417 million, with the fire and police funds still well over the 120 percent mark that allows them to be tapped into for the new health benefits account. The general city plan is also overfunded, but it’s probably not much over the mark at the moment after months of battering on Wall Street.

At their height last year, the city plans had more than $550 million between them.

Steve Lemanski, an actuarial expert who consults for the city, said that health care costs are expected to go up about 10 percent yearly in the short term but to slow to about 5 percent annually long-term, if only because the economy can’t cope with the current rate of growth for long.

Lemanski said that the cost of vesting employees early is “really minimal” in the scheme of things.

Klocko said this is the perfect time to explore the option because the market has already crashed. It almost certainly is going to head up again in the years ahead, he said, so the excess in the pension funds is likely to grow larger, not lesser.

Union officials have said they may be willing to go along with the change if the city shares some of the benefit with workers. Among the possibilities, they have said, are giving lifetime medical care to retired employees, dropping employee contributions to the plan or adding some other benefits to those already provided.

What’s most important, they have said, is that the city negotiate with them in good faith rather than dictate changes that might affect money already set aside to pay for employee pensions.

Bristol is one of the few municipalities in the state that has a fully funded pension plan. It is one of the most flush funds in the whole country, the result of a 30-year-old city policy to put aside money for the future expenses involved, a move that is already saving taxpayers more than $6 million annually.

What’s next?

The GASB 45 Committee meets at 5 p.m., Tuesday, Feb. 3 to hear from the city’s financial adviser. After that, it plans to listen to public comments.

The committee chairman, T.J. Barnes, said he would like for it to make its recommendation by mid-February.

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

Rimcoski: Felons shouldn't get public pensions

The city should strip away the pensions of its employees who are convicted of felonies, a city councilor said.

Republican city Councilor Mike Rimcoski said that he wants to ax the pensions of those who have violated the public trust.

He said he hasn't yet made a formal request to change the city's policy because he wants to get more information from the state first.

State Rep. Frank Nicastro, a Bristol Democrat who is also a city councilor, said that state lawmakers have debated the idea for many hours in the General Assembly without approving it.

The hitch at the state level, he said, was a concern that in punishing felons, legislators would also be snatching money from spouses and children who did nothing wrong.

"It's still being looked at," said Nicastro, who represents the 79^th District, encompassing the southern third of Bristol.

Rimcoski, who has pushed the idea in the past, said it angers him to see state workers who are accused of crimes making a quick retirement to lock in their pensions.

"You shouldn't be sending pension checks to the prisons," Rimcoski said.

Nicastro said he absolutely agreed with Rimcoski on that point.

The issue has been bandied about since the scandal that rocked the administration of former Gov. John Rowland, who resigned in disgrace and spent time in federal prison for corruption.

There haven't been any significant scandals at City Hall, but other municipalities around the state have seen workers charged with serious crimes.

Rimcoski said he would bring up the policy again after he gathers the additional information he seeks.

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

Out with the old, in with the new

A controversial 19-member panel looking into the possibility of snatching excess pension cash to pay for other retirement benefits for city workers has been tossed on the junk heap.
“I’m not so sure a 19-member committee is all that functional,” said T.J. Barnes, who chaired it. “It didn’t seem like it was going to be worth everybody’s time.”
He called it “doomed to failure” because of its size and the “huge conflicts of interest” that many of the union-affiliated members had.
Replacing it is a seven-person GASB 45 Committee, named for an accounting rule and again headed by Barnes, will examine the prospects for saving millions for taxpayers by transferring cash from the pension funds to a new account set up to cover the future tab for health care coverage for retirees.
Mayor Art Ward said he dumped the initial committee for a trimmed-down new one because he is “trying to look for the most efficient way to address the issue.”
Ward said he made the change in the makeup of the panel because Barnes asked him to do it.
“I respect his opinion,” the mayor said.
Though it remains unclear what the city can do, it is eyeing the excess pension funds because using them would be the simplest, cheapest way to get the $72 million necessary to cover the anticpated future cost of post-employment benefits other than the pensions themselves.
City Comptroller Glenn Klocko said that coming up with the necessary money, which doesn’t have to be done overnight, is a “problem child” for officials who don’t want to hit up taxpayers for the money if they can find an alternative.
Barnes, the chair of the city’s Republican Party, said that Bristol is one of the few cities in America that has enough pension money to consider shifting excess cash into the new health care fund.
“We’re extremely lucky to even have it as an option,” Barnes said.
“As long as it doesn’t hurt integrity of existing benefits,” he said, the proposal “can be a win-win for everybody.”
Ward said the new committee consists of trustees of the different city pension funds and also includes the Board of Finance chairman, the city treasurer and Barnes.
Barnes said that under the law, it’s the trustees “who make recommendations to do anything to those funds” so it was important to ensure they were responsible for looking into it.
Barnes said that without the change in the composition of the panel, he wouldn’t have stayed on it.
Ward said that his choice to pick 19 people for the first board “was probably more idealistic than realistic.”
Plus, he admitted, the panel would have been unwieldy and less likely to reach a consensus.
“I’m busy as can be,” Barnes said. “I’m not going to spend my time as a volunteer to accomplish nothing. We’re either going to do this or not do this.”
Barnes said that it is rare for a municipality to possess pension funds that have more money than is needed to pay off future claims – which is still the case even after the Wall Street collapse this fall.
“It’s one of the few silver bullets” available to save money for taxpayers, Barnes said, and it would be “a big mistake” not to explore using it.
“We are extremely lucky to even have it as an option,” Barnes said.
Ward said that the new committee will make its recommendation to a joint session of the City Council and the finance board, which would have the final say.

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Copyright 2008. All rights reserved.
Contact Steve Collins at scollins@bristolpress.com

Bristol not involved with alleged Ponzi scheme organizer

While many municipalities and charities lost fortunes when a financial fund orchestrated by Wall Street kingpin Bernard Madoff collapsed, Bristol didn't lose a penny.

City Comptroller Glenn Klocko said that Bristol didn't have any funds invested with Madoff, whom federal prosecutors accuse of fraud.

Though Bristol's pension funds have taken a hit because of the stock market's nosedive after Labor Day, it still has more than $400 million, enough to pay off all of its anticipated future obligations.

The city's pension investments had reached a high of about $550 million earlier in the year.

The town of Fairfield lost $42 million that it had invested with Madoff, 18 percent of the money it had set aside for future pension payments.

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Copyright 2008. All rights reserved.
Contact Steve Collins at scollins@bristolpress.com

Trying to understand GASB 45 Committee?

Take a look here at city Comptroller Glenn Klocko's presentation to the new committee about the financial, legal and actuarial issues involved in the proposed use of excess pension money for a new trust fund for post-employment benefits. It's a lot information, not all of which will make sense without the background, but I think it should help explain why this issue is so important.

What's at stake, when you come down to it, is whether excess city pension will cover the tab for retirees' health insurance or if taxpayers will shell out more to pay for it. The only other option is to reduce the benefits, which could happen, but I'm not sure why anyone would prefer that to tapping the pension excess.

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Copyright 2008. All rights reserved.
Contact Steve Collins at scollins@bristolpress.com

Fussin' and feudin' at City Hall

A week after City Councilor Ken Cockayne denounced Mayor Art Ward as a coward who stacked a key committee to favor unions, the mayor tossed Cockayne off the panel.

In a memo to Cockayne Wednesday, Ward told the freshman Republican that because of his “demonstrated biased opinions, lack of sensitivity,” and an “absence of objectivity,” it would be impossible” to let Cockayne remain on a committee investigating the possible use of surplus city pension funds for other purposes.

Ward said later the move was “absolutely not retaliation,” merely a necessary step for the GASB 45 Committee to carry out its assignment.

“I’m not surprised by the mayor’s response,” Cockayne said. “I’ll leave it up to the taxpayers to decide if this was a retaliatory move.”

Cockayne said, though, that “taking me off this board will not silence me in protecting and fighting for the taxpayers of the city.”

Last week, Cockayne complained that putting nine union representatives on a panel of 19 established to investigate the use of excess pension cash was an “absolutely ludicrous” move by Ward and proof the mayor didn’t want “a fair and balanced committee.”

He also called Ward “cowardly” for not serving on the panel himself, a decision the mayor said was spurred by his wife’s job with the Board of Education that could call into question his objectivity on the issue.

Last week, Ward called Cockayne’s charges “totally disgusting,” in part because the councilor called the press to complain about the panel’s makeup rather than first lodging a protest directly with Ward.

Cockayne said that “perhaps I was a little too aggressive” in going after the mayor, “but we’re talking about saving taxpayers $72 million” and that’s too important to remain silent about.

“I still believe the mayor stacked this committee because he was against what I was trying to do, which is to save the taxpayers money,” Cockayne said.

Ward said that Cockayne has “demonstrated his individualism” on many occasions during the past year, but this time his “negative and derogatory comments” have made his presence on the committee a hindrance to its work.

The mayor said that if he wanted to take revenge on Cockayne, he’s had plenty of chances for a long time.

“Based on past history, I think that if I were going to do reprisals, I’ve had 12 months to deal with Mr. Cockayne where opportunities have presented itself. If that were the case, he wouldn’t be on anything,” Ward said, and might just be going to City Council meetings and nothing more.

In his memo to Cockayne, Ward wrote, “Your tendency to provoke animosity through inflammatory opinions does not serve the best interest of the mission of the board, which is to arrive at a reasonable consensus with regard to GASB 45.”

Cockayne said he knows more about the pension fund use than anyone on the council, having met with the city’s pension lawyer, actuaries, comptroller and personnel director long ago. Ward skipped the session, the councilor said.

“I have done more homework than the mayor has or any other councilman,” Cockayne said.

Ward tapped veteran Republican city Councilor Mike Rimcoski to take Cockayne’s place on the panel.

“Mike is very opinionated himself,” Ward said. “He has no problem stating his opinion, but he states it without negative and derogatory comments.”

Ward said the GASB 45 panel, named for an accounting rule, has to deal with “a very delicate and sensitive issue” and needs to be able to work together to weed through a complex tangle of laws and policy.

He said he set up the committee now “to try to attempt to have some resolution by time of the adoption of the budget” next spring. “That’s how complicated I view it to be,” the mayor said.

Ward said he asked T.J. Barnes, the city’s Republican Party chairman, to serve as the panel’s chairman because he has “the most financial wisdom of anybody on the board.”

“There are issues where you need to be able to reach across the aisle to work in the best interests of the community,” Ward said, and this is one of them.

Cockayne said that if the mayor was trying to reach a conclusion that would benefit taxpayers, he would have created “a fair and balanced committee” that included fewer unions and more “regular taxpaying citizens” who would have “no bias either way” on the outcome.

He said a fair review of the facts would lead the city to use the excess pension cash to fill new trust funds to pay for post-employment benefits, especially health care, that would otherwise need to be funded directly by higher taxes.

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Copyright 2008. All rights reserved.
Contact Steve Collins at scollins@bristolpress.com

COO backers say unions, mayor have made their case for them

Press release from the ChooseCOO group:

UNIONS AND MAYOR MAKE CONVINCING CASE FOR COO

If ever there was a time for a COO, this is it. Local union leaders, by their actions, have made a convincing case for the COO (aka ‘Chief Operating Officer’ or ‘City Manager’).

The Mayor needs help. This is a given. Our present Mayor and past mayors have acknowledged this fact. However, while the unions and their Mayor are saying in words that they are all about the taxpayer, their recent actions paint a different picture.

Local union leadership is against the COO, but all they want to talk about is the cost, not the benefits. In fact they are running the anti-COO campaign. Of course they’re against the COO – do you really think they want someone hired to focus on the efficient delivery of City services? Do you really think they are going to put the best interest of the taxpayers ahead of their own self-interest? Let us give you an example: A new city committee is looking into the possibility of using money from overfunded pension accounts to pay for retiree health benefits instead of asking taxpayers to pay the tab – a move that would lower property taxes by nearly half a mill. Nine of the 19 members of this new ‘GASB 45 Committee’ are union representatives and some others are friendly to the unions. Do you think union leaders are ready to throw their support behind a decision that will save taxpayers $1.8 million now and much more in the future? Wouldn’t that alone more than pay for the COO position?

Further, union leaders have the Mayor in their hip pocket. How do we know? Well, first the Mayor loaded this GASB 45 Committee with union members. Then, the Mayor issued a press release parroting the unions’ argument against the COO. Do you believe that his actions are not politically motivated? Whose turf is he protecting? Do you think there is any conflict of interest here? After all, when the COO position is introduced, doesn’t that lessen his job duties and, perhaps, his pay?

This community may be facing the greatest economic challenges in our history in the coming years. Our present system is laden with cronyism and lacking accountability. Taxpayers, this is your chance to say, “Enough politics!” and get the professional leadership we need -- someone with the expertise of a Chief Operating Officer – by voting ‘Yes’ to Question #5 on Election Day.

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Copyright 2008. All rights reserved.
Contact Steve Collins at scollins@bristolpress.com

Ward: 'They shoot mad dogs'

Claiming that "Mad Dog is back," city Councilor Ken Cockayne today blasted the mayor for being a 'coward' who's in the pocket of the unions.
Mayor Art Ward, a Democrat, denied the charge and fired back at the freshman Republican councilor.
Ward called Cockayne’s charge “totally disgusting. He should be ashamed of himself.”
Cockayne decried Ward's decision to put so many union representatives on a new panel looking into the possibility of tapping excess pension cash to lower property taxes.
"It's absolutely ridiculous," Cockayne said. "The unions basically control the whole board. This is not a fair and balanced committee."
Ward was stunned that Cockayne would have hurled such insults, especially since the two men hadn’t spoken about the appointments.
“That’s very childish,” said Ward. He said Cockayne isn’t setting a good example for his son, or thinking about the impact the personal attacks could have on Ward and his family.
“It’s uncalled for,” said Ward. “He needs to grow up. Get a lasso and rope some maturity, park his little pony.”
Nine of the 19 members of the new GASB 45 Committee are union representatives and some of the others are friendly to the unions.
"When I looked at the list, I almost fell off my chair," Cockayne said.
Cockayne said the pro-union leaning of the panel is "another example of Ward pandering to the people who got him elected."
Cockayne also took a shot at Ward for failing to put himself on the panel.
"Removing himself from the issue is just cowardly," Cockayne said.
He said the mayor ought to be the panel's chairman so he would have a stake in its decision.
Though he was in the office almost all day Thursday, Ward said, Cockayne didn’t approach him with his concerns.
“I guess maturity is very elusive for some, or fleeting if he ever had it,” said Ward. “I can’t believe this kid. He’s never called me. He’s never asked me about it. He shoots from the lip. He needs to think about putting his brain in gear.”
Ward was surprised that Cockayne referred to himself as “Mad Dog.”
“They shoot mad dogs,” said Ward. “I think he needs a tetanus shot.”
Ward said his wife’s 26-year employment with the Bristol Board of Education – and membership in an employee’s union – could pose a conflict if he served on the board, which is why he opted out.
Ward said his wife’s position had nothing to do with politics – she had held the job for seven years before he ever got involved in politics, he said.
While under “normal circumstances” it might make sense for the mayor to chair the board, Ward said, it didn’t apply in his case.
Cockayne’s assessment showed a “limited ability to exercise any type of rational judgment,” said Ward. “While he didn’t give it any forethought, I did.”
Ward "has really stacked this committee knowing the outcome," Cockayne said.
"Here's an example of direct savings for the taxpayers and we know what their answer is going to be," Cockayne said.
He said the unions won't agree to transfer money from the pension accounts to cover their own health care without getting something extra in return.
Cockayne said the decision about how to handle the pension excess is "a management issue" and "not a collective bargaining issue."
There's no reason to give unions so many seats at the decision-making table, Cockayne said.
But Ward said the role of the new panel is “strictly advisory.”
“They make a recommendation to the Joint Board,” said Ward. “It’s up to the Joint Board where it goes. It’s highly unlikely that anything that was not favorable to the city would go any further.”
The Joint Board is made up of members of the City Council and finance board, and finance commissioners outnumber councilors nine to six, said Ward, who said he’d like to believe that it would offer objective oversight.
Because the decisions made will directly impact the employees who belong to the unions, Ward said, it made sense to make sure they were represented on the panel.
“They need to have input,” the mayor said, because the decisions deal directly with their pension money.
“If he’s talking about being fair and equitable, why wouldn’t they have representation?” Ward asked.
Ward said he appointed T.J. Barnes, the chairman of the Bristol Republicans, to lead the new board. It wasn’t because of politics, said Ward, but because of the financial expertise that Barnes has.
Barnes, a banker at Valley Bank, has “a wealth of knowledge that he can contribute to the process,” Ward said.
Ward questioned whether Cockayne’s latest outburst would undermine Barnes’ work on the board.
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Copyright 2008. All rights reserved.
Contact Steve Collins at scollins@bristolpress.com

City eyes pension options

Faced with the need to pump as much as $8 million annually into a fund for health care for retired city workers, officials are eyeing three potential options.

One is to continue a ‘pay as you go’ tradition that is currently costing taxpayers about $1.8 million annually, though that number could rise tenfold within a decade.

Another is to renegotiate the post-employment benefits that municipal workers receive to lower the cost, perhaps by reducing the 10-year period that worker remain eligible for full health care coverage.

Finally, a new city committee is eyeing the possibility of tapping into overfunded pension accounts in order to use some of the excess to pay the tab – a move that would immediately lower property taxes by nearly half a mill.

City Councilor Ken Cockayne, who pushed for the committee’s creation, said that shifting the money is “the one drastic step” City Hall could take to help ease the burden on taxpayers.

After hearing the options laid out in detail by city Comptroller Glenn Klocko this week, the new GASB 45 Committee, named for an accounting rule, plans to study the information carefully before taking any action.

“We should probably take some time and go through this,” said T.J. Barnes, a member of the new panel.

Mayor Art Ward said the committee will make its recommendations to the Joint Board, which consists of city councilors and Board of Finance members. It will have the last word, the mayor said.

Klocko said the city needs $71.7 million to cover the anticipated future costs of the post-employment benefits other than pensions. He called the figure “the problem child we’re dealing with.”

It has a trust fund established to cover that tab, but “the problem is we don’t have any funding” for it, Klocko said. The trust fund is empty.

Klocko said that bond rating agencies want to see that Bristol has a plan for dealing with the issue, not necessarily a complete solution to the problem.

Continuing the ‘pay as you go’ practice, the comptroller said, “is going to get very difficult” because rising costs will eventually make it almost impossible for taxpayers to cover the yearly tab.

In Norwalk, which adopted a plan recently, officials plan on putting $2 million a year in tax revenues into a trust to pay the cost. They also renegotiated the benefits union members get in order to lower the overall expense.

Under Internal Revenue Service rules, the city would have to leave at least 120 percent of the expected pension fund needs intact in the existing trust. It could only tap money over and above that figure.

This week, the city’s fire and police pension funds are still so flush that the city could easily meet the IRS rules to tap into them. There’s also enough in the general city trust fund to dip in on a yearly basis.

Overall, the three trust funds totaled $426 million as of Tuesday. They reached a low of $412 million at the low end of the market this fall. They have been as high as $550 million last spring.

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Copyright 2008. All rights reserved.
Contact Steve Collins at scollins@bristolpress.com

'Mad Dog is back'

Claiming that “Mad Dog is back,” city Councilor Ken Cockayne today blasted the mayor for being a 'coward' who's in the pocket of the unions.

Cockayne decried Mayor Art Ward’s decision to put so many union representatives on a new panel looking into the possibility of tapping excess pension cash to lower property taxes.

“It’s absolutely ridiculous,” Cockayne said. “The unions basically control the whole board. This is not a fair and balanced committee.”

Nine of the 19 members of the committee are union representatives and some of the others are friendly to the unions.

“When I looked at the list, I almost fell off my chair,” Cockayne said.

Cockayne said the pro-union leaning of the panel is “another example of Ward pandering to the people who got him elected.”

Cockayne also took a shot at Ward for failing to put himself on the panel.

“Removing himself from the issue is just cowardly,” Cockayne said. He said the mayor ought to be the panel’s chairman so he would have a stake in its decision.

Ward “has really stacked this committee knowing the outcome,” Cockayne said.

“Here’s an example of direct savings for the taxpayers and we know what their answer is going to be,” Cockayne said.

He said the unions won’t agree to transfer money from the pension accounts to cover their own health care without getting something extra in return.

Cockayne said the decision about how to handle the pension excess is “a management issue” and “not a collective bargaining issue.”

There’s no reason to give unions so many seats at the decision-making table, Cockayne said.

Ward said this week that he wanted each of the city’s unions to have a representative so they would all understand the issues at stake and know what’s going on.

Here's the committee membership list:

Phyllis Amodio (public health union)
T.J. Barnes (Retirement Board)
Cliff Block (City Council)
Greg Boulanger (Local 818)
Dan Carter (BPSA)
Dale Clift (city attorney)
Ken Cockayne (City Council)
Steve DeVaux (school business manager)
Diane Ferguson (personnel director)
Jack Hines (Fire Board)
Paul Keegan (Local 1338)
Glenn Klocko (city comptroller)
Peter Kot (police union)
Chad Lockhart (Local 2267)
Rich Miecznikowski (finance chairman)
Peter Munn (fire union)
Collen Ryder (education secretaries)
Mayra Sampson (Local 233)
Bill Veits (city treasurer)

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Copyright 2008. All rights reserved.
Contact Steve Collins at scollins@bristolpress.com