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Councilman Carl DeMaio sent out a memo today opposing any changes in the assumptions used to calculate the city’s annual payments to the pension fund.
The memo cited potential changes to the “corridor” method detailed in my story yesterday. It also brought up another possibility DeMaio’s heard about to spread out the payment due to the recent investment losses over four years. (For instance, DeMaio explained, if the 2010-11 pension payment were slated to be $100 million more than the 2009-10 pension payment, it would be broken out into $25 million chunks to be paid over four years.)
DeMaio stated that while he supports the efforts to deal proactively with the looming deficit in the 2011 fiscal year, he has “deep misgivings” about city management advocating for changes to the pension calculations as a way to balance the budget.
DeMaio told me the memo reflects concerns he’s having based in part on the “chatter we’re hearing.” Mayor Jerry Sanders has nominated three new pension board members whose appointments are expected to come before the council for approval next week. DeMaio said he plans to ask the nominees about their opinions on changing the assumptions used to calculate the pension payment.
“I want to get them on record,” he said. “Do they agree or disagree with the efforts to make the actuarial policies as precise and independent as possible?”
The councilman said the talk of changing the calculations recalled the pension underfunding deals of 1996 and 2002.
“Manipulating the pension payment — it’s exactly what got us into this situation in the first place,” DeMaio said.