Hamden Pension Fund Informational Meeting

(Article from NH Register) By Phyllis Swebilius HAMDEN >> An informational meeting on the town's underfunded pension fund Wednesday night drew more than 100 people to Miller Memorial Library, including several in uniform. "The time's come to act," Mayor Scott Jackson told the Legislative Council. The fund is underfunded by $350 million and contains only 14 percent of what is necessary. Town bond counsel David M. Panico echoed the mayor's comment. "There is no more time for delay," he told the council, thogh a decision was not to be made Wednesday night. Details of the plan will be posted on the town's website today. Jackson said the Segal Co., hired to advise the town on its choices, is "comfortable dealing with billions, not millions" of dollars. "This is a 30-year plan," Jackson said. "What I asked for is a plan that will outlive me," he said. "The council will look at the components of the plan and modify it as they see fit. "One way or another the town of Hamden is getting out of this," he said. Chief Administrative Officer Curt Leng said the town's bond counsel has said the most inexpensive, viable option is: o Changing the cost of living adjustment, which this year went from 3 percent to 1.59 percent. o Putting more money into the fund. The town this year increased the contribution from $9.3 million to $12.5 million, the largest one-year increase to date. o Selling pension obligation bonds. Jackson told the council, "A (pension obligation bond) is a potential part of the solution that is in your hands." However, the bond is "not a magic wand," said town financial adviser Barry J. Bernabe. The issue is "black and white," Eric J. Atwater, Segal Co. vice president, said. There are about 500 people in the pension plan, mostly retirees, he said. Inaction now would deplete the fund in five years, according to Atwater. Residents, employees and retirees expressed their own ideas before the advisers spoke. Some were concerned about putting the town into debt and the potential effects on their property values and taxes. "Borrowing is risky," George Levinson said. Of the pension obligation bonding, Anne Sommer said, "I think timing is the key and there are a lot of risks involved. "The experts don't have a crystal ball. Nobody does," Sommer said. "This is a very, very serious decision." Bob Anthony, a Fire Department retiree, asked the council "to bond at the right time." Another resident said the unions have to make concessions. Town workers' pay is better than private employees and the benefits are "extraordinary," he said. Some warned a decision should not be made quickly. "Are we making a decision when we don't have enough information before us?" asked Michael Montgomery. Retired Police Chief John P. Ambrogio pointed out the problem goes back to the 1970s. He told the council, "You can't blame the unions." "The retirees that put in 20, 30, 40 years to the town of Hamden should feel comfortable that they're going to get the check once a month," said retired Police Chief Robert Nolan. The issue has been "kicked down the street for some time," United Public Service Employees Union representative Wayne Gilbert said. Sometimes the town put no money into the fund, he said. "The pension fund is a written contract ... a written promise," he said. Public employees do not earn more than the private sector, he said. "Yes, they get more sick days." At least three sets of concessions have been made by the unions, he said. "Real money was given back to this town by the employees," Gilbert said. "If you do nothing, we all go down." Joseph Cirillo, representing Town Hall workers with Local 2863 AFSCME, said the union has consistently contributed to the pension fund while concessions have been made in 10 years. "We've given up a lot." The union has a contract coming up. "We're nervous and concerned about the future," Cirillo said.

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.