The Mayor’s Office was a likely candidate to be among those rejoicing at the news last week that the pension system’s deficit had dropped from $1.4 billion to $1 billion. After all, it’s trying to close an $87 million budget gap and a smaller pension bill next year would certainly help that endeavor.

But it didn’t rejoice. Here’s why: things are likely going to look different next year. The report contained a number of one-time adjustments that both positively and negatively affected the fund. Next year, two specific factors will likely bump up the pension system’s pressure on Mayor Jerry Sanders’ annual budget.

Spokesman Fred Sainz said the mayor doesn’t want to budget off of a report that contains a “one-year aberration” that could lead to unstable peaks and valleys in the city’s pension funding.

The pension report pegs the city’s annual pension bill at $138 million — a step down from this year’s $162 million. But Sanders, in his five-year financial plan, has forecasted paying $197 million into the pension system in 2008. For one, he expected a bigger pension bill. But he also planned on adding tens of millions on top of that in order to pay down the debt soon.

Sainz said the mayor hasn’t yet decided what he will budget for the pension payment — a significant factor in the city’s tight budgets in recent years — in light of the new report. He said, however, that the mayor is expected to take a conservative approach.


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