Dear Mark Meyers,
My sincere hope is that Norton Shores employees and
residents will avoid a similar fate.
My belief is the city's financial situation is perilous and
decisive action must be taken soon.
I was disheartened to see only one city council person
attend our meeting last week.
Perhaps I was using incorrect email addresses when sending
the invitation.
Would you be able to forward this note to all on the council
and any others with an interest in helping repair these pension funds?
My thoughts relating to our Friday, Sep. 9, 2016 meeting
about the current Norton Shore pension and retiree health care underfunding:
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How we got into this mess is not nearly as
important as is the
plan to get on track to fully fund the promises made to Norton
Shores employees. My understanding, as of our last meeting, is that no plan
currently exists. Is that correct?
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You and your team have made certain adjustments
to employee compensation but I have not seen your analysis of exactly how these changes will
help (or hurt) the goal of full funding. Do you have that analysis?
Will it be made available to the council?
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Your Internal Memo dated 9-14-2016 (attached)
shows "additional contributions per fiscal year" to the pension fund
totaling approximately $1 million from 1998-2013. (16 years. Approx.
$62,500/yr.) An additional $500,000 for FY 2015 with the same promised for 2016
and 2017. Are the 2016-2017 amounts locked into the city budget?
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Given that an additional $500,000 is only 2% of the "best
case" ($24,619,315 using 7.25% rate of return) net pension
liability, do you believe that $500,000 additional per year above the required
deposit is adequate to bring the pension fund to your goal of 80% funded?
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Even with "additional contributions…",
the city pension
underfunding rose from 2005-- $10,211,605 to 2015-- $20,334,449. Almost a
double in 10 years.
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The retiree healthcare fund mess is not just an
"old" problem. Since 2010, the retiree health care (OPEB) annual recommended
contribution has been underfunded each year by the following amounts:
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2010-$1,278,640
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2011-$1,791,622
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2012-$1,619,208
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2013-$1,083,302
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2014-$1,110,535
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2015-$1,615,229
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Almost $7 1/2 MILLION dollars has been diverted from retiree funds
in just the last six years. With an upward trend in the last three. Why
did this happen?
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Clearly, many believe this is a very serious
financial situation. Is this on any upcoming city agenda?
Below are questions from my last letter that remain
unanswered.
I'm sure that the council would be interested in the
answers.
As would I and other Norton Shores residents and business
owners.
Questions from previous letter:
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If the city suffers serious financial problems
because the retiree funds are underfunded, will current retirees be affected?
Current employees?
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The annual required contributions to the retiree
healthcare fund had declined precipitously in recent years. Why?
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The "funded ratio" is 4.35%. With over
$38 million underfunded. Are you comfortable with this? Why/Why not?
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Why do you use 8.25% return when your money
managers show expected returns of 2-6.56% ?
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What have been the pension fund investment
returns for past years?
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You have plans to fix underfunding. Are they
written? What are they?
- ·
Will citizens be able to attend meetings to
discuss this issue?
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Muskegon county posts their employee contracts
online. Will Norton Shores do the same?
- ·
Are there any other pension programs or retiree
healthcare programs other than these?
- ·
Are the city councilors liable personally for
serious mismanagement?
- ·
Is there something that we citizens can do to
help the situation?
- ·
Are any new hires offered defined benefit plans
and/or retiree healthcare benefits?
- ·
Have you considered looking into other cities
that have 100% funding?
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Are you willing to meet together with other
cities to understand and adopt similar pension and health programs.
- ·
How can we approach this issue as a team?
(Citizens and the council they elected serving together)
A final observation.
Whether the government requires a municipality to compute
and/or make available to the public that computation of financial data, it is the responsibility of that public body to utilize "real" numbers to make
certain that every spending item has a corresponding and equal revenue stream.
And it is incumbent upon each and every council member to
demand a regular review and accounting to make certain that promises made to
employees will be fulfilled.
Whenever one commits the spending of money, either right now
or in the future via an employment contract, there is an implied responsibility
to make sure the adequate funds will be available when needed.
Signing union or other contracts, knowing full well there is
no revenue stream to fulfill your side of the bargain is, in my opinion,
immoral.
It may also be criminal.
Thank you for your time.
I am readily available to meet with anyone to discuss these
matters.
I look forward to receiving your response.
Jim Riley
"...Norton Shores City Council came to a decision to draft an ordinance preventing dispensaries from opening, plus setting fees and fines.
