City: Pension takeover not needed
Not a lot of new data here, but the city pension board -- led by Luke Ravenstahl -- will argue to the state that its fund is above 50% and shouldn't be taken over. From Joe Smydo:
The city pension board today agreed to tell state officials in an upcoming report that council's pension bailout pushed the fund above the 50 percent funding level, averting a state-threatened takeover.
In the days leading up to the meeting, Mayor Luke Ravenstahl's office had questioned whether the council's bailout, which taps more than $735 million in parking tax revenue over 30 years, qualified as an asset.
In particular, Mr. Ravenstahl was concerned that the bailout wasn't included as an asset in Controller Michael Lamb's Comprehensive Annual Report. Mr. Lamb said he couldn't list the bailout as an asset in his Dec. 31 report because of the timing; the pension board hadn't yet voted to accept the money.
In the end, at Mr. Ravenstahl's suggestion, pension board members agreed that each one of them would sign the valuation report due to the state by Sept. 1.
Normally, the fund's executive director, city finance director Scott Kunka, signs the report. But Mr. Ravenstahl said he wants board members to take responsibility for the valuation. If the state doesn't accept council's bailout, the state would take over the fund and require dramatically higher annual pension payments.
At Mr. Ravenstahl's suggestion, the board also asked Mr. Lamb to amend his report at this point and list the bailout as a pension fund asset. Mr. Lamb said he would consider it.
The plan's value was about $332 million on Dec. 31. The "net present value" of the 30 years of parking tax revenue is about $239 million. In total, then, the fund's value is about $571 million, according to the pension board. While officials still are calculating the fund's liabilities, Mr. Kunka said he believes the fund will exceed the 50 percent funding level and avoid state takeover.
"Our goal is to get the state to agree to that," Mr. Ravenstahl said.
The valuation report will be sent to the state Public Employee Retirement Commission, which will make its own determination of the fund's value and decide whether a takeover has been averted.