SPRINGFIELD – As the city’s pension fund continues to grow, the City Council considered a bond authorization of $755 million before eventually delaying the vote during the council’s April 25 special meeting.

Ward 7 City Councilor Timothy Allen, who served as the council’s representative during the pension bond analysis process, discussed the progress made on addressing the pension fund. Allen said he reviewed the pension process alongside Chief Financial Officer TJ Plante and an external financial team.

Allen maintains that the city continues to make good decisions in addressing the pension fund’s overstretched expenses.

“We didn’t create the problem, but we have to fix it…We’ve made consistently good decisions on the pensions during the 12 years I’ve been on the council. We’ve gone from 26 percent funded to 35 percent funded, but we have to keep on that path of pension responsibility,” said Allen.

Plante discussed updates regarding the pension process. He explained that the bond authorization would allow the city to make informed decisions on addressing the pension fund as interest rates continue to rise.

“The authorization of $755 million allows us to keep going forward,” said Plante.

If approved, Plante said the city would decide whether to pay the full $755 million bond toward the pension fund, pay part of the bond or ultimately decide not to use the bond. Plante considered the request a “unique solution” as the city’s current pension payment plan will require a significant annual increase of expenses. Brockton, Quincy and Andover represent communities that adopted a similar approach, according to Plante.

The annual baseline bond payment estimates to around $60 million, although that figure could change as interest rates rise. Linda Bournival of KMS Actuaries said that the bond would pay off pensions until 2037.

The council aired mixed sentiments about the bond authorization request. City Councilor At-Large Tracye Whitfield believed that the pension fund review process feels “rushed,” noting that future bond payments could be a struggle if an economic recession occurs. The councilor also expressed concern about the city’s undecided plans.
“I can’t vote on something that I don’t even know what I am going to be voting on. I don’t know what these scenarios are,” said Whitfield, who considered approving the vote as a “gamble.”

Ward 6 City Councilor Victor Davila expressed support for the bond authorization proposal as an avenue for getting ahead of the pension fund. “I think it’s a plan and they’ve done their due diligence on…It’s an obligation to ensure that the people who have spent their life working for the city are taken care of,” said Davila.

City Councilor At-Large Jesse Lederman described the pension fund as “the monster under the bed of municipal government.” Due to rising yearly costs of funding the pensions, Lederman supported the bond as a “safeguard” for continuing payments.

City Councilor At-Large Justin Hurst stressed that the vote should not be approved until Plante and his financial team finish their risk mitigation plan. “My biggest frustration is that nobody knows [about the pension fund plan]…we need time to convey this information to our constituents to see what they want,” said Hurst.

Hurst ultimately called for Rule 20, which ended all discussion on the subject matter. The councilor cited the city’s under-discussed processes, such as for the Elm Street redevelopment project, as a reason for the council and constituents to receive more information about the request.

Updates on the pension fund bond authorization request will be discussed in a Finance Subcommittee meeting.