Fixing Hamden Pension Fund #1 Priority

By Ann DeMatteo, Register Staff adematteo@nhregister.com / Twitter: @annddematteo HAMDEN — A new report on the town’s failing pension fund says that the fund will be broke in four years if nothing is done to improve the situation. The financial nightmare can only be avoided if comprehensive solutions are found, Mayor Scott D. Jackson said in a May 1 memorandum to the Legislative Council. Tonight , the council will meet with financial advisers about the pension, pension obligation bonds and current investment returns. The council will vote on the budget Wednesday night. Jackson gave the council the pension cash flow analysis that reviews the scenario with and without pension obligation bonds. The document was created by the Hamden Retirement Board’s new financial adviser, David Lee of Dahab Associates. Solving the pension crisis in a “comprehensive and well-planned manner” is the town’s top priority in the coming fiscal year, according to the mayor. According to the report, the fund now has $62.5 million and pays out about $20 million a year. According to Jackson and the report, the fund will be in deficit by 2016 if only regular contributions from the town and employees are used. The budget would also have to include enough money for a “pay-as-you-go” pension program and the town’s contribution of $20 million. Even with a $90 million infusion of pension obligation bonds, the fund will be in deficit by 2023, without a comprehensive solution, according to Jackson. Under the $90 million pension obligation bond scenario, with no comprehensive solution, the town would have to contribute between $13 and $18 million from the operating budget from now to 2022, on top of a $7.5 million debt service per year for 20 years for the bonds. Curt Leng, Jackson’s chief aide, said a comprehensive program would have to include changes in union contracts, as well as possibly changing the age and years of service someone would need in order to collect. “The town would also have to put in a significant amount of capital outlay and get all of the parties to do their part,” he said. The Legislative Council has been meeting on the mayor’s proposed $192 million budget, and a full discussion on how to handle the pension has yet to be held. As it stands now, the council has added about $1 million to the mayor’s budget, or .29 mills higher than the tax rate of the 36.85 mills proposed by Jackson for 2012-13. Council members want the budget to be lower, but have been having a difficult time making cuts. Last week, on the motion of Republicans Betty Wetmore and Austin Cesare, the council eliminated a part-time position for a traffic director. Jackson proposed the $35,000 position to assist with implementing the town’s traffic calming efforts. Instead, the money would go toward consultants and traffic calming tools. The council voted to cut $200,000 from the Fire Department sub-straight time and $70,000 from police overtime. Councilman Harry Gagliardi, D-2, asked Leng to provide the council with a list of all discretionary funds in an attempt to figure out what else can be cut because he doesn’t want to raise taxes. A motion he made to eliminate two of the three police deputy chiefs and to add two patrol officers instead was rejected. Leng reported to the council that a retirement incentive plan for town employees is still in the works. It doesn’t appear as if council members are willing to touch the $80.3 million the mayor has recommended for the Board of Education. Cesare called the number “very critical” and questioned whether things would move forward if the school budget were to be cut. “I will not vote to reduce it even more. It’s tough times for everybody, but the $80.3 million doesn’t begin to meet the costs” necessary to provide every student an education, said Scott Harris, D-9.