OK, sorry it took a little longer than planned but here’s what I could gather from Peter Q. Davis about why he has resigned from the city’s pension board and his reasons are filled with some newsworthy points.
First off, in an e-mail exchange, here was Davis’ reason for leaving.
I believe the corrections I thought I could assist in making have been instituted. What remains is the ongoing directing of the organization. I believe there are others in the community with more expertise in this area then I possess, and I feel comfortable passing the torch of public service to them.
He said he was proud that the two top staff positions on the board were filled and that he had helped oversee the implementation of new accounting rules and new investment practices that have improved the system.
And now to the heart of the matter, Davis did not want to be part of what he saw was going to be an interesting development in coming days.
The pension board appears ready to establish an amortization schedule for the city’s payment of its pension shortfall. Remember, the pension system right now has about $1 billion less in assets than it has in looming liabilities. It is currently in the early years of a 30-year plan to pay that down.
The Pension Reform Committee in 2004 recommended that the pension board always plan on paying down shortfalls like this over a much shorter period. The committee recommended 15 years and residents approved a change to the City Charter that supposedly made that law.
On the one hand, the pension board has refused to accept that it is beholden to this law. But on the other, it has apparently embraced the theory behind it and may be moving toward forcing the city to pay down its pension debt over 15 years.
Why does this matter? Well, the pension system has been a creditor to the city for some time — loaning it money for goodies. It agreed in a legal settlement to — for a few years — ask for its money using a 30-year outlook. If, freed from the parameters of the legal settlement, it implements instead a 15-year plan, it will have significant effects on the city.
After all, imagine your mortgage company changed your repayment plan from a 30-year amortization to a 15-year one. That means a squeeze.
Mayor Jerry Sanders, somewhat randomly, announced last month that he would adhere to a 20-year repayment plan — as if he had some kind of choice in the matter.
Now, back to Peter Q. Davis.
Like I said, some of his colleagues appear ready to support a 15-year plan. They may like the mayor and be friendly with him sometimes, but remember last year: He asked the majority of them to resign. They refused and showed they don’t really think he has any control over them.
Davis has a bit of a different take. He said he’s not sure what amortization schedule should be implemented but he’s upset that the mayor has had the chutzpah to assume the pension board would follow his fiat.
I would have based my position on the facts present and the debate of my fellow trustees that took place during the Meeting — What I was not prepared to do was support the unconditional 20-year amortization. … My concerns were the mayor coming out with public statement which seem to not be supported by State Law or which did not support the work of trustees, in particular the ones he has appointed.
But he said it was his job not to oppose the mayor on these issues but to resign.
I believe the public feels that the mayor and board need to work together … but I also believe the trustees must vote independently.
I said I heard that he was afraid of being sued and the former chairman of the Centre City Development Corp. had a good response:
There seem to be a lot of rumors. Public service comes with being sued. I was in many lawsuits in the past … Public bodies are sued all the time, it comes with he job. Concern with lawsuits was not a part of my decision, but the removal of that concern may be a benefit of it.