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The Independent Budget Analyst’s Office today scolded the Mayor’s Office for allowing the contract with its pension actuary to run $408,000 over the approved amount without a council vote.
The Mayor’s Office is asking for a total of $690,000 for the actuarial services. All but $282,000 has already been spent.
“As we have stated before, we are concerned that contracts and expenditures are often not brought back to the City Council until the previously authorized limits are far exceeded,” the IBA report states. “In this case, the services billed exceeded authorization by almost 300 percent, and the IBA is unaware of a reason that this contract could not have been brought to the City Council for discussion and amendment in a timely manner.”
Independent Budget Analyst Andrea Tevlin said she supported the work of the actuary in general.
If approved by the council, the new payment would bring the actuary’s bill up to $900,000 total. Of that, $684,921 are to come out of the general fund reserves, which is designed to be used in the case of an emergency such as an earthquake or fire.
“It is not consistent with the need for accountability to return to withdraw funds from the reserves of the General Fund and Enterprise Funds throughout the year for routine expenses,” the report states.
The actuary, Joe Esuchanko of Michigan-based Actuarial Services Co., has provided expert testimony in court cases, performed pension studies, and double-checked the work of the pension system’s actuary.