COLUMN: Why did Wallingford’s mayor try to add another $250,000 to pension fund?

COLUMN: Why did Wallingford’s mayor try to add another $250,000 to pension fund?

Record-Journal


What happens when the mayor and four councilors believe that the town has so much money in reserves and such a large surplus in the current fiscal year, that it’s smart to spend $250,000 for a reason that returns little or no value to taxpayers? What you get is an interesting debate like the one the Wallingford Town Council had on June 13. Fortunately, five councilors voted down the idea.

The discussion started when the town’s administration advanced an idea to add extra money to the town’s pension fund, although nobody claimed more money was needed. The mayor didn’t suggest alternative uses for the spare $250,000, such as repairs to schools, parking lots, the community pool, sidewalks, or roads.

Why, then, did this proposal get such traction? Some councilors may have thought that adding extra money to the pension would be a noble gesture. Maybe some wanted to pare down what appears to be another large surplus this year. After all, another surplus might be politically inconvenient in view of the run up of reserves in recent years. Perhaps others who have opposed large surpluses in the past believed, on strictest principles, that this expenditure would be better than adding to the surplus once again, even though it doesn’t afford any practical benefit to taxpayers.

Those who have followed my columns in this paper in the past know that I am not in favor of taxing to build reserves beyond reasonable levels. I have criticized the mayor on several occasions for backing into unneeded surpluses through loose budgets that underestimate revenues and exaggerate expenses. If, however, another big glop of money will be left over after this fiscal year — and that seems to be the implication — the money should not be spent desperately just to keep it out of reserves or just to depress a looming surplus. Any plan for extra money should be more deliberative. So, good for those five councilors who voted down this idea! (Testa, Marrone, Shortell, Fishbein, and LeTourneau.)

Why were these five right? The pension fund is healthy enough. There’s no danger of it running out of money. Extra money, more than what has been already earmarked in the budget, is not required. The comptroller said that adding extra money to the pension would be like paying a bill that doesn’t exist. The mayor has never asked for such a supplemental payment to the pension plan before. Nothing unusual has occurred that makes such a thing needed now. The town has always contributed to the pension fund the sums that have been actuarially recommended. No town official has ever publicly complained about the fund’s returns (that’s another topic for another day). The fund’s current value is about $192 million according to the comptroller, and it’s growing. The contributions to the fund, together with current gains and earnings, more than meet the payment of employee benefits and costs. An extra $250,000 would be negligible, according to the comptroller, and nobody quantified how such a small contribution would benefit taxpayers. No one tried.

The administration’s reasons for backing the supplemental payment were that it would “reassure the public” and it would make the credit rating folks smile more warmly on Wallingford, which already has an AAA bond rating. Egads! What weak arguments based upon optics.

Democratic Town Councilor Vincent Testa, on the other hand, was on target with his critique of the plan. He said that as he listened to the questioning by Republican Town Councilor Chris Shortell, the administration’s logic “went out the window.” Testa said that dire predictions of financial ruin were “getting old,” and that if, as the mayor warned, the “sky is falling” financially speaking, any extra money should go to the town’s “doomsday fund” rather than to the pension fund. He was correct on all points, and his blunt honesty was fun to watch.

Mike Brodinsky is a former Wallingford town councilor and host of public access show “Citizen Mike.”


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