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Sounding Board: Excessive Benefits

The Daily Transcript put this question to mayoral candidates Donna Frye and Jerry Sanders: Current pension benefits for city employees are widely viewed as being excessive when compared to pensions offered in the private sector. Do you agree that the city's pension benefits are excessive and, if so, what would you, as mayor, do to avoid the granting of excessive pension benefits in the future?

The current pension system is not sustainable. I've offered an honest, realistic plan to address the city pension debt.

First, I will seek speedy court determination of the legality of employee benefits approved by the city council in 1996 and 2002, and terminate those ruled illegal by the courts.

My opponent says she will act outside the law and unilaterally terminate these benefits (many of which she voted for) prior to a court ruling. This reckless action would expose taxpayers to hundreds of millions of dollars in lawsuits and years of expensive litigation, and ultimately leave the city right back where we started.

I will use the threat of bankruptcy and lay-offs to bring city employee unions back to the bargaining table to reform the city pension system and move toward a benefit plan similar to the private sector, including:

  • Bringing the retirement age for city employees closer to national standards;
  • Phasing-in employee pension contributions to the 50 percent level mandated by the charter, and use these contributions to fund pension obligation bonds (assuming a favorable interest rate can be secured);
  • Requiring employees to pick up a significantly larger share of their healthcare costs;
  • Capping city contributions for future retiree health care;
  • Eliminating the option of purchasing discounted "phantom years" of service;
  • Closing down the existing pension plan for future employees, and ask voters to approve a charter change authorizing a new plan that includes a defined benefit component and significantly reduces the cost to taxpayers. I've also proposed structural changes at City Hall that will ensure we never face these problems again, and that will create a more open, accountable and ethical city government capable of earning back the public's trust by:

  • Insisting that these decisions be made in public, and that public input be encouraged;
  • Making the city budget truthful and understandable, so both the public and the City Council understand the implications of their budget decisions;
  • Establishing a requirement that city-funded pension benefits cannot be increased without approval from a majority of the electorate.
  • My opponent's credibility on this issue is undermined by her purchase of discounted service credits for herself, even though she had previously been advised of the perilous financial condition of the city's pension system.

    -- Jerry Sanders

    Candidate for mayor

    Editor's note: Mayoral candidate Donna Frye did not supply a response to this question as of presstime.

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