Tuesday, October 19, 2010

ICA Rejects 2011 Budget

The Intergovernmental Cooperation Authority rejected the City’s 2011 budget today saying it cannot approve the spending plan until the city knows what it is doing about its pension program. City Council and the Mayor’s office are locked in a fight over how to fund the pension plan. The Mayor had submitted a budget that leased the parking assets for the next 50-year and used the proceeds to shore up the underfunded pension plan. Council rejected that plan and members are exploring other options. ICA Chair Barbara McNees says by statute the ICA had to vote on the budget today. By voting no, a second clock begins ticking. The mayor now has 15 days to submit a second budget. The ICA will then have 15 days to respond. McNees says other than the pension issue, the budget is in order. What ever they choose, if it is fiscally sound and balanced we would not send it back, “ says McNees. She says she will not take sides in the ongoing debate, “ we have been very specific with everybody that it is up to the mayor and city council to pick a plan that they feel is best for the city.”
City budget director Scott Kunka says the Mayor’s office will begin working on the budget even though it does not know exactly what the council will approve. One option is to allow the state to take over the pension plan. That is expected to result in higher minimum payments in to the pension plan. The state has yet to let the city know exactly what that payment will be but Kunka says by consulting with a private actuary he has a good guess as to what the payment will be. “It would be difficult for their actuary to come back with anything other,” says Kunka, “it’s a fairly arcane but fairly exact science.” Kunka says they will keep an eye on council’s actions in the coming days in an effort to figure out how much money they will have to cut from the budget.

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