City Council Should Not Surrender Authority

The Lincoln City Council is still working on ways to fix the Lincoln Police and Fire Pension fund. The retirement fund was severely underfunded last year, but was helped by a recent infusion of cash. Now, the Council is considering an ordinance that would make funding the pension a city law. A law that would give too much power to the city actuaries.

LIBA is not opposed to following the guidelines suggested by the Lincoln Pension Review Committee in May of 2016. However, we do disagree with the method that is being proposed.

Instead of our elected officials making a determination about the funding level each year, the Council will give a couple actuaries complete control to make the decision. These actuaries are not elected and do not answer to the taxpayers. This law, if passed, will say that we have to fund the pension at a certain level even if the city is having financial issues. This will lead to one of two outcomes during tough financial times.

We will either hear about how libraries and swimming pools need to close, or that we must raise taxes. The police and fire pension will be used as an excuse, and we will be told how draconian cuts to city services must be made, or we must increase taxes.

Again, LIBA supports following the guidelines in the Pension Review report, but this ordinance change only cherry-picks one suggestion. Why isn’t the Council working on some of the other suggestions such as having the city and employees share the true cost of the plan?

The report says the following:

The Committee recommends changing the way contributions are determined for Lincoln’s plan. Instead of police and fire employees contributing a fixed amount—currently 8%—they would contribute a percentage of the total annual costs of the plan, with the City also contributing a percentage. This is an arrangement found in other plans. Some plans split the cost 50/50. Others are 60/40 or some other amount. If, for example, the pension plan cost was split with 60% paid by the City and 40% paid by public safety employees, the employee contribution could be about 10.25%–a small increase. The City’s contribution could be reduced a like amount.

Instead of following this suggestion, if the Council passes this ordinance, they are saying that the taxpayers should make the plan whole.

This ordinance fails in two ways. It does not reduce the taxpayer contribution as suggested by the committee report, and it has the Mayor and City Council relinquishing their budgeting authority and giving it to someone who does not answer to the taxpayers. The City Council should not surrender its authority to control city funds.

LIBA studies and promotes these types of issues that are important to businesses and our community.  If you have an interest in joining LIBA, please call me at (402) 466-3419.  LIBA membership is not restricted to just businesses.  We also have “individual” memberships for those who want to help influence our local government decisions.

For more information on LIBA, visit Liba.org.