Yesterday, I told you about Allentown's $51 million pension funds deficit, which was minimized by Allentown Mayor Ed Pawlowski during budget hearings. He dismissed dire warnings from City Controller Bill Hoffman as "speculation. ... No one knows which way the market is going."That was then. Hizzoner is whistling a different tune these days, claiming ''[n]o one saw this tsunami that has taken over the country, that has affected the state and us at the local level.''
Pawlowski should have a few words about that tsunami with Northampton County Council member Charles Dertinger. In Northampton County, the pension funds deficit is hovering around $70 million. To make matters worse, the county will also be paying somewhere around $15 million in a swaption deal that went sour.
To deal with little problems like this, Council Prez Ann McHale suggested replacing its current four-person finance committee with a committee of the whole at last night's Council meeting. Her justification? "We are facing difficult and tough financial times right now." Her idea was heartily endorsed by Council member Ron Angle. He loves meetings. But he noted his support is "probably enough to sink it on its own."
That's exactly what happened. By a six to three vote, Council rejected McHale's idea. Only Joe Capozzolo and Ron Angle agreed with McHale.
Lame duck Diane Neiper flatly stated, "I don't go for it." Rev. Mike Dowd explained that every council member is already free to attend every committee hearing. That's certainly true, but only committee members have a vote.
Here's what I believe Dowd and Neiper were really thinking. "Look Ron, damn it, we listen to you enough. If you tell us you voted against that swaption just one more time, we're coming after you. Why don't you get another damn radio show?"
Charles Dertinger was probably thinking the same thing, but just had to offer a ridiculous explanation that dismisses the gravity of pension fund deficit and the swaption liability. "These are paper problems. This is not $70 million we need to make up tomorrow. We're not looking at a doomsday sequence here."
Actually, we are. Dertinger, like Mayor Ed at budget time, has his head in the sand. A few months down the road, Charles will be saying nobody could have predicted this financial tsunami.
After Dertinger was done, a tsunami erupted, but it came from the mouth of Council member Ron Angle. "The reality of the $70 million deficit is that it has to be made up in a five year stretch. It's not a paper loss; it's a real loss." He's right. But then Angle mentioned, about 700 times, that he voted against the swaption. I can't be sure from where I was sitting in the peanut gallery, but I could swear that Neiper actually started singing.
McHale should have pulled a Pawlowski and proposed a committee of fifteen "outside experts," most of whom are campaign contributors.
16 comments:
Once again Stoffa is cooking the books now that he squandered the Reibman surplus he was given. Sad that a new Executive has to clean up after he and his administrations incompetence.
Dertinger's attitude toward the budget deficit tells me that we need to vote for someone with some genuine financial skills, Bruce Gilbert a fiscal conservative with a background as an MBA and experience as a bank vice president. Time to clean house at County Council
Tell us about this photo, please.
Oh, please, vote for a Bank Vice President because they've done such a fine job with private sector. R's just don't get it.
Charlie Dertinger is one of the best Councilman. He will compete with Ferraro to be top vote getter in this election. I think Charlie's point is that the market is down now, but we have the money now and into the foreseeable future to pay retired people their benefits. Thank God, if and when the time comes to actually do something about the Pension shortfall, Charlie will be there and Ron will be gone. Because the difference between Ron and Charlie is that Charlie is a grown up who will take action and Ron will just tell you he predicted and vote no to the solution.
Anon 8:02, The photo is a fake.
Anon 2:11, Let's drop the nonsense. Stoffa will easily be reelected. Ann (64%) McHale hasd no prayer, something I sure she has just learned bc she's running a poll. Time to drop the politics and concentrate on government.
"I think Charlie's point is that the market is down now, but we have the money now and into the foreseeable future to pay retired people their benefits."
Oh, really? Actually, even 2010 will be a challenge. In addition to the pension deficit and swaption, the county will be paying debt service on a new bond. it will be paying for a new, $20 MM park in Allen Township that it will have to staff yearly w/ between 5 to 10 employees.
Your statement, just like the baloney from Charles and Mayor Ed, ignores reality.
You had it right, who would want to be around loudmouth low class Angle? Council is not paid enough to put up with him. People are trying to seve the public for a measley $7500 annual pay. Nobody in their right mind would want to work with him and take his abuse and listen to his grandstanding.
to Bernie,
thanks for photo information.
didn't know.
It is not just NC. Many pension plans in the state and country are underfunded. The PA teachers retirement fund is Billions in underfunded accounts. Many in the country are the same way. Mega thousands of private company pension plans are the same way because of mismanagement and just plain greed by the companies who were allowed to borrow against them. These will VERY SOON be all dumped on the govornment to be bailed out. Hey the govt started this bailout crap... now everyone will jump on the band wagon. The trouble is... this one will break the bank!!
In the case of public employee pensions being "dumped on the government", that is a good thing. The PBGC doesn't payout anywhere near the commitment of the plans it assumes. So the taxpayers win, and government employees are brought back to reality, to face the consequences of demanding unsustainable pension benefits which outpace those of the majority of people who fund them.
stop giving stoffa false hope. ann mchale will win hands down.
How did Stoffa lose 70 million dollars ?
"These will VERY SOON be all dumped on the govornment to be bailed out. Hey the govt started this bailout crap... now everyone will jump on the band wagon. The trouble is... this one will break the bank!!"
Truth be told, the "bank" is already broke, if we could ever classify the PBGC as a bank to begin with. Defined benefit plans should have been jettisoned in the late 70's / early 80's in favor of defined contribution plans, which are owned BY THE EMPLOYEE rather than the employer sponsored-pension plan.
One of my big fears about the what-now-appears-inevitable-societal-collapse, is what happens when state and local public servants, particularly the police, realize their retirement savings have ceased to exist? Do they continue to do their jobs? Do they begin operating (officially or unofficially) as a para-military group, seeking tribute from locals for "protection"?
Many conservatives fear a strong centralized Federal govenment. I fear that we may have given too much power to those at the local level.
Just a few days ago the nations largest credit union has gone bust...Its not going to stop. Rendell said himself there will have to be a huge tax increase to get the PA teachers retirement fund solvent again. So how do the taxpayers win? And the fed? They are bailing out banks with fake money, its billions of dollars that do not exist. "just a paper problem"!.
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