Monday, October 18, 2010

Mayor Expects State Takeover of Pension

Mayor Luke Ravenstahl responded to City Council's preliminary vote against his proposed plan to solve the city's pension problem by saying he is done lobbying them and expects a state takeover of the city pension fund.

Council voted down the plan last week and is expected to take a second vote on Tuesday.

Ravenstahl said he and his staff have come up with a plan that would parlay proceeds from a leasing parking facilities to a private operator into a pension fund bailout.

He said the plan would be a viable alternative to the state takeover that would lead to dramatically higher pension payments that the city could make only by raising taxes or cutting services.

His staff has begun preparations for a state takeover of the pension fund.

By state law, the state will take over the fund if the city is unable to raise the level of funding from about 27 percent of the requirement to at least 50 percent by the end of this year.

Ravenstahl said he now intends to devote his attention to other issues. Private industries had bid about $452 million to lease the parking facilities. He said, in the future, turning down his plan will be looked at as "a golden opportunity" that was missed.

No comments: