published Friday, December 20th, 2013

Chattanooga City Hall backs off draconian cuts plan

David Brooks, center, points to potential changes being made to pensions while speaking with Bill Melhorn, right, and other concerned retirees at the conclusion of a Fire and Police Pension Board meeting days after Police Chief Bobby Dodd and his command staff stated that they will retire. There has been a significant increase in the number of public service employees retiring this year.
David Brooks, center, points to potential changes being made to pensions while speaking with Bill Melhorn, right, and other concerned retirees at the conclusion of a Fire and Police Pension Board meeting days after Police Chief Bobby Dodd and his command staff stated that they will retire. There has been a significant increase in the number of public service employees retiring this year.
Photo by Dan Henry.

Pension plans side by side

Minimum retirement age

Current None

Task force plan 55

Pension Board plan 50

Third option* 50-58 for new hires

Employee contribution

Current 8% or 9%

Task force plan 12%

Pension Board plan 9%

Third option* 13%

Cost of living adjustment

Current 3%

Task force plan 1%

Pension Board plan Market value

Third option* Hold 2 years then 1%

DROP

Current Yes

Task force plan No

Pension board plan Yes

Third option* No, for new hires

Savings to city

Current n/a

Task force plan $400 million

Pension board plan $126 million

Third option* Not calculated

*City officials say this plan will not be used

An idea to hike Chattanooga fire and police employees' pension contributions by 40 percent or more and set the retirement age at 58 provoked a frenzy in the ranks Thursday, though City Hall denounced it and a city consultant said it wasn't seriously being studied.

In front of firefighters and officers attending the regular Fire and Police Pension Board meeting, fire Capt. David Brooks, who is part of Mayor Andy Berke's pension reform task force, waved a sheet of paper he said came from the mayor's office. The proposals included setting the retirement age at 58 for new hires -- there's no minimum age now -- and raising employee contributions from 8 or 9 percent of salary to 13 percent.

Several employees said the boost essentially would be a 5 percent pay cut. Anger sparked throughout the room as police officers and firefighters huddled around Brooks to look at the paper in his hand and snap photos with their cellphones. One firefighter called the cuts "raping him."

Pension Board President Chris Willmore called the scenario unacceptable and said he was disappointed it was even suggested.

Later Thursday, city Chief of Staff Travis McDonough said the scenario didn't come from the mayor's office and he doesn't believe such changes would be good for the city.

"It's one-millionth of the discussion," McDonough said. "That's not where the task force will wind up."

Consultant Vijay Kapoor, whose PFM Group was hired by Berke, said some task force members -- he wouldn't say who -- had asked if the board's actuary, the Segal Co., could find out how much such changes could save the city. He said the scenario was suggested but never actually studied.

"You can take it and throw it in the trash; it's not being considered at all," he said.

Kapoor said he's now withdrawn his offer to run the numbers, but he didn't say the task force wouldn't use some part of the scenario in an overall plan.

Berke has said the city needs to shore up the pension fund, which has a $150 million unfunded liability. He gave his hand-picked task force a deadline of Dec. 31 -- recently extended to Jan. 31 -- to come up with proposals.

Talk of reducing what the consultants have called rich benefits has roiled fire and police ranks. So far 43 officers and firefighters have announced retirements this year, more than double the annual average. Earlier this week, police Chief Bobby Dodd said he and three of the four officers in his command staff would leave at year-end. Dodd could have stayed on at least four more years.

Berke told the Times Free Press he found out Sunday afternoon that Dodd planned to retire. Dodd said he's leaving for a private-sector job.

Of the officers and firefighters who have retired this year, 28 have done so since Nov. 1.

Firefighters at Thursday's meeting who have worked with the department for four years said they would consider leaving if the scenario they saw was passed.

Sgt. Tim Tomisek, president of the International Brotherhood of Police Officers chapter here and a member of Berke's task force, said losing the top administrators adds pressure to find a solution that is fair for everyone.

Tomisek also said the latest scenario came from the mayor's office, and it made him question whether the task force can reach a consensus. He said he is frustrated that the administration has rejected a plan by the pension board projected to save the city $126 million.

"I was very optimistic at first," he said. "Now I don't know if [the mayor's office] wants us to come to a consensus."

But McDonough said he believes the task force is moving toward an agreement.

"We've made great strides," he said. "Something everybody agrees to now is, there has to be changes made."

The task force must reach consensus by Jan. 31 and present its ideas at the Fire and Police Pension Board's Feb. 7 meeting.

If the board approves the changes, they go into effect. If the board rejects the proposal, Berke will have to go to the City Council for approval and then the public will decide by a referendum vote.

Contact staff writer Joy Lukachick at jlukachick@timesfreepress.com or 423-757-6659.

about Joy Lukachick...

Joy Lukachick is the city government reporter for the Chattanooga Times Free Press Since 2009, she's covered breaking news, high-profile trials, stories of lost lives and of regained hope and done investigative work. Raised near the Bayou, Joy’s hometown is along the outskirts of Baton Rouge, La. She has a bachelor’s degree in mass communication from Louisiana State University. While at LSU, Joy was a staff writer for the Daily Reveille. When Joy isn't chasing ...

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