By Tim Pallesen
Delray Beach taxpayers are facing a $93 million debt to pay the pension benefits of the city’s police officers and firefighters.
The debt has grown 276 percent since it was $33.6 million in 2007, forcing city commissioners to either cut pension benefits or raise taxes.
“A $33 million hole has blown up into a $93 million crater that will continue to get worse if we don’t change how we do business,” Mayor Cary Glickstein told commissioners in City Hall chambers packed with police officers on July 9.
“We are seeing pension plans bankrupting cities. We have to address it,” Commissioner Shelly Petrolia agreed.
“This pension plan is a financial train wreck right now,” Petrolia said. “We’re plummeting deeper and deeper into a financial hellhole and it must stop.”
Many city pension funds have suffered because their income from stock market investments hasn’t matched the return that was projected before the recession.
But the commission’s pension adviser alerted them that their police and fire pension fund scores an “F” on a state grading system because of its unusually high debt ratio. “The unfunded liability has grown dramatically,” attorney James Lynn warned.
Glickstein and Petrolia criticized the investment decisions of the city’s Pension Board. But Commissioner Adam Frankel, who serves as the Pension Board’s vice chairman, drew applause from police officers when he vowed not to cut pension benefits.
“Our city needs to be competitive with other cities,” Frankel said. “We need to support you guys.”
Police union representative Gary Ferreri told commissioners that Delray police officers are exploring job opportunities elsewhere because they fear that their pension benefits might be cut.
“We understand that pension reform is needed,” Ferreri said. “We ask that it be fair.”
Commissioners made no decision about what to do about the debt. Glickstein said the subject will be discussed again during city budget talks this summer.
Comments