February 7, 2011
With only a couple months left in office, the Colorado Springs City Council passed on a proposal Monday to determine the combined pension obligations of the city government and its enterprises.
Only four council members supported the inquiry, and three are seeking election in April.
Councilman Sean Paige, who proposed the study amid revelations it would cost nearly $250 million to get Memorial Health System out of the Public Employees’ Retirement Association of Colorado, said he would pitch the idea again if he’s elected.
“I don’t think we should kick the can down the road indefinitely because the longer we kick the can, the harder it will be to come to grips with whatever we discover,” he said.
Mayor Lionel Rivera and council members Tom Gallagher and Jan Martin backed the proposal. Gallagher is running for mayor, and Martin is seeking a second term on council.
Despite their support, Rivera and Martin said the inquiry should be put on hold until the city closes its 2010 books to provide the most up-to-date information. Audits on the city’s financials should be completed by May.
“I think it would be important for the new mayor, who is the chief executive of the city ... to know what his unfunded liabilities are, especially for public safety because that is a much larger number than it is for PERA in the city,” Rivera said.
Councilman Scott Hente questioned the need for the study.
“So we know the number, so what? What do we do with it?” he asked.
Councilman Randy Purvis agreed with Hente, saying the proposed inquiry may have been politically motivated.
“The only point of knowing this information is being able to budget for it, and that’s even questionable since the state Legislature tells us how much we’re going to contribute each year,” Purvis said. “So, I question just where we would go with the information other than to give some people a nice campaign platform plank to argue with.”
But Rivera said the information could be used to try to change state law.
“What do you get with the information? Well, you use it to lobby your state legislators and tell them, ‘We need to change PERA because if not, it’s going to be a burden on us. We’re going to have to cut services, cut employees and not give any raises for a number of years,’” the mayor said.
Knowing the city’s combined retirement obligations can help the city respond better to the situation, Paige said.
“We adjust where we can,” he said. “It might put some impetus behind the need to make some adjustments at the Legislature.”
Steve Bach, the only other mayoral candidate at Monday’s council meeting besides Gallagher, said the city needs to understand the totality of the pension liability.
“If the math doesn’t work, we have to do something about it, in fairness to the city employees, for starters, who have been made promises by all these past elected officials and then, secondly, to the citizens,” Bach said.
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