Will Police & Fire Pensions Survive the Recession?

Will Police & Fire Pensions Survive the Recession?

Pension stories these days often depict a fiscal landscape in which city and state budgets all across America are in flames — a landscape where public employees are feeling the heat of taxpayer anger over benefits they can no longer afford.

In news reports and official studies, pundits and politicians call out public employees — and the officials who oversee them — for pushing cities to the brink of bankruptcy.

In Winter Park’s just-released 2013 Proposed Budget, City Manager Randy Knight warns “Substantial budget cuts have been necessary in our budget for the past few years both to balance the budget in those years and to create sustainability going forward. This year the overall revenue was fairly flat compared to last year so the cuts were not as drastic. Going forward, if revenues do not return to a growth that keeps up with inflation, it may be necessary to consider either service level reductions or a modest millage rate increase”

No hint of bankruptcy, but a warning nonetheless.

Some commentators paint a far darker picture of pension plan challenges. In a Senate Finance Committee report The Pension Debt Crisis that Threatens America, Senator Orrin Hatch concludes “. . . it is becoming increasingly apparent that defined benefit pension plans will never be financially sound enough over the long term for use by state and local governments.”

Fareed Zacharia writes in Why We Need Pension Reform, “Warren Buffett calls the costs of public-sector retirees a “time bomb.” They are the single biggest threat to the U.S.’s fiscal health. If the U.S. is going to face a Greek-style crisis, it will not be at the federal level but rather with state and local governments. The numbers are staggering.”

Just like pension plans in other cities, our city’s firefighter and police pensions took a hit during the great recession. And yet, a Google search of the phrase “Winter Park Pension” shows that — unlike many other cities — Winter Park’s story has remained decidedly low-profile. By contrast, a search of “San Jose Pension” and “California Pension” yields page after page of dramatic news coverage. Why them and not us?

California Pension Chaos

2012 was the year San Jose, CA became a poster child for public pension excess and municipal folly. Both San Jose and nearby Vallejo are the subject of a recent five-alarm expose in Vanity Fair Magazine. In California and Bust, Michael Lewis tells a tale of cities in deep trouble in a state whose future is no longer golden.

The fate of San Jose and cities like it have triggered a chain reaction — feeding the fear that drives the stories that embolden politicians to take on public workers. Stockton’s budget collapse forced it into bankruptcy this summer. San Bernardino voted to file for bankruptcy on July 10. And now, even liberal Democrats are taking a hard look at entitlements. Illinois and its largest city, Chicago, are bleeding more red ink than most — forcing Chicago mayor, Rahm Emanuel to challenge benefits that are important to traditional Democratic party allies.



 

Trees & Power: The Good. The Bad. The Necessary?

Trees & Power: The Good. The Bad. The Necessary?

City officials will not soon forget the third week in April when half of Winter Park woke up in a bad mood. It was the week officials learned that photos of their deep v-cut trimming of the city’s much-loved oak canopy had gone viral.

Images of radically trimmed oaks on Winter Park Road and elsewhere were circulating from neighbor to neighbor — then were attached to angry emails that flooded city in-boxes. City Commissioners quickly responded to residents with emails and newsletters of their own, but within days the controversy was full-blown.

City officials and staff were getting cranky, too. Charges were hurled. Feelings were hurt. There were reports of distraught arborists and tense meetings. Jerry Warren, head of the city’s electric utility — whose employees had trimmed the trees to clear around power lines — was particularly stung by citizen criticism. Weeks later in the June 11 city commission meeting, Warren appeared to have developed a wry verbal tic — referring to himself repeatedly as “Jerry the Tree Butcher” during a long presentation.

First Attempt to Calm Residents Unsuccessful

At the April 23rd commission meeting convened just as the tree controversy bloomed, the city presented a slide show justification of their trimming policy. But the power company-produced presentation spawned more questions than it answered. Commissioners and residents wanted to know: Just what — exactly — is the city’s tree trimming policy? What was the policy in years past? Why did it change? When did it change? Who authorized it? What are the alternatives? Any hope the city had that their presentation would end the discussion was quickly dashed.

Several city residents who had invested significant time and effort in tree canopy preservation spoke to the commission. First up was Steve Goldman. Goldman had sent email to many city residents the day before the commission meeting. The email included photos of aggressively trimmed trees and a plea to “Roll the city’s guidelines for trimming around power lines back to the 3½ foot clearance which has been the effective guideline in practical use from 1983 . . .” Marc Hagle, a resident who, along with Goldman has contributed to a tree canopy fund sponsored by the city, spoke of an alternative approach. Hagle proposed floating a small bond issue as a way to quickly fund the undergrounding (burying) of power lines near “problem trees”. This approach spares trees that would otherwise be aggressively trimmed to keep them out of overhead power lines.

City Tree Team Debates the Details

While city staff continued to take citizen input on the city’s tree maintenance policy, a large “Tree Team” of staffers was already banging out a new plan behind the scenes. Warren characterized the group as having “…lots of different viewpoints . . . and I will tell you that the debate was sometimes fiery.” Eventually, Warren’s team managed to put together an extensive analysis and proposal that was presented at the June 11 city commission meeting.