Dale, who apparently woke up with his cranky pants on this morning, responded to an earlier posting of mine by asking how the mayor was going to solve the city’s structural deficits, most notably in the pension system.

Let’s recount history for a moment because it’s important to have a shared basis for the discussion. Jerry Sanders inherited unfunded obligations estimated to be worth $2.94 billion. That’s a fact. These range from the pension and retiree health care liability to a $900 million problem with deferred maintenance and ADA improvements that were never made. In spite of the fact that they were knowingly assumed as liabilities, the city has historically ignored these obligations as if magically … poof … they would go away if no one paid attention to them. All of these are cold hard facts but all of them are changing this year.

Take a look at page two of this fact sheet. For the first time in an awfully long time, this mayor is dedicating precious city resources to begin paying off these structural deficits in a meaningful fashion. In fact, the cumulative budgetary impact of funding these critical areas is $98.7 million for all city funds, of which $69.9 million is from the general fund. Will the problem be solved next year? No, absolutely not. But then again, this wasn’t a problem that was created overnight either. The mayor deserves credit for the start we are making at getting the city back on track.

One of those obligations is the pension system. The mayor believes that the city must pay down the pension liability immediately. In addition to the Annual Required Contribution of $137.7 million, the mayor has also dedicated an additional $20 million so that the city can immediately begin paying into the principal with no negative amortization. In addition, the mayor has budgeted $7.3 million to begin to repay the pension system for assets spent inappropriately on retiree health in prior years. The mayor is committed to fundamental reform of the pension system when all of the city’s collective bargaining units are at the negotiating table during FY08.

In terms of the raises that the mayor is proposing for the police officers, the exact liability is unknown at the present moment. Depending on whom you speak with and when, it ranges from $18 million to $61 million. It depends on how the data is analyzed. The data will be presented to the City Council on Monday.

By any objective definition, this mayor has done more to solve the city’s various structural deficits than any other mayor in the city’s history. The problems are not easy and their solutions certainly are not either.


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