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Pension Funds Are $1.23 Billion Unfunded!
Where's the Accountability?
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The City of Atlanta maintains three Pension Funds: Police Fireman and General Employees. According to the City of Atlanta Pension Funds, these three City Pension Funds are underfunded to the extent of $1.23 billion!
City Council Resolution for Emergency Committee
City Council Establishes Task Force to Review Conditions of Atlanta’s Pension Plans
The Atlanta City Council voted last week to create a task force to review the City's Pension Plans. The decision was approved and now awaits approval by the Mayor. Mayor Franklin has stated that she is NOT in favor of this committee. Please email the Mayor and let her know that we need our City leaders to get behind efforts to put Atlanta financially back on track! Mayor Franklin's Email
Support City Council's unanimous decision to create an Emergency Committee to review the City's 3 Pension Plans! Email City Council
Statement from John S. Sherman, President
Dear Members,
In the current issue of the Buckhead Reporter, the following quote appears:
"Howard Shook, the Chairman of the City Council's Finance Committee and Clair Muller, have jointly submitted a Resolution establishing a Select Committee (to meet the unfunded $1.2 billion Pension Funds) by the end of the year. Shook has often said that ‘the Pension Reform is our No. 1 priority'."
Funding $1.23 billion shortfall in the three Pension Funds (police, firefighters, and general employees) requires a comprehensive plan, particularly at a time when Atlanta's former Chief Financial Officer, Janice Davis, states: "The City will fall short of funding its present operations, at least during the next two fiscal years."
Any comprehensive plan should include:
- An independent audit of the three Pension Funds.
- The appointment by the Trustees of each Pension Fund of highly reputable and successful Investment Advisors.
- According to the Turnaround Plan (pages 52/53), "Another approach used by cities to improve efficiency and effectiveness has been marketization. This describes the process whereby traditional government services are bid by both private firms and the existing government department. Savings from marketization vary but can be significant, i.e., Residential Waste Collection, 60%; Fleet Management & Operations, 38%; Airport Management & Operations, 40%; Fire Services, 50%; Road Maintenance, 50%, etc."
- The Turnaround Plan (page 27) recommends "revising the performance evaluation system of City employees." A revised evaluation system should contain specific and measurable metrics of productivity and quality for all job functions. An independent 3rd party management consultant should conduct such metrics. Atlanta employs approximately 9,000; other comparable size cities employ far less.
- The Turnaround Plan recommends "implementing incremental revenue initiatives to significantly improve the City's financial condition." An example of such a revenue initiative is through a commuter tax applied to those commuters living outside of the City but who use City services. A growing number of cities have implemented such a commuter tax.
Hopefully, the Select Committee on Pension Reform will exert the leadership needed to meet the $1.23 billion shortfall.
John S. Sherman
President
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