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Sunday, January 3, 2010

Municipalities Tackling Pension Costs ; how will Wallingford move into the future?

The story Municipalities Tackling Pension Costs was online at the Courant.com at http://bit.ly/6189IO written by reporter BILL LEUKHARDT

It is an interesting read and I would recommend it to folks.

Below are some highlights but I do recommend that you follow the link above and read Mr. Leukhardt’s entire story.

  • Ten years ago West Hartford's pending pension obligations were $13 million. Now, officials say, the figure is closer to $25 million.
  • Local government is playing catch up to the changes that were made by “Main Street” businesses in the 80s.
  • In 2006, almost 80 percent of state and local workers nationwide aged 25 to 64 were covered by a pension, compared with only 45 percent in the private sector, according to data from Boston College
  • 80 percent of those public sector workers with retirement coverage had a defined benefit plan. In private industry, "more than 60 percent of [pension] participants [are in a] defined contribution plan," according to the Center for Retirement Research.
  • 28 of the state's 169 municipalities have some version of less-expensive 401(k)-type plans for workers in place of traditional pensions
  • Avon made the jump in 1997
  • Currently, 25 percent of the town's workforce is on the old system, and 75 percent is in the new plan
  • Avon’s contribution into the 401(k) plans is a third of the cost of the defined benefit system they were in.

It is something that I believe Wallingford is going to have to look at more closely in the near term and take action on it.

I am not sure if we even engage in this at all presently – phasing out pensions in favor of 401(k) plans that have employees putting in their own salary where the municipality matches it up to a certain percentage.

With all the talk that I hear and the conversations discussed about the pension, it not being fully funded, and the pension commission itself and so forth I assume “no” but I’ll stand corrected if I am in error on that.

The main issue with pensions in general is that they increase over time as workers retire at higher levels of pay and this is reaching a level that Wallingford is going to find additional difficulty in sustaining going forward.

The only way that they can is by raising taxes; that is given. At what point the taxpayers choke on this is anyone’s guess.

When you couple the cost of all the other services in town with this added and increasing burden you just know progressive planning and action must be taken now.

Wallingford and her taxpayers are going to need to put more and more money into the pension plan year over year for the workers going forward so that the fund is fully funded. This needs to occur so that the plan can pay out to retirees as it should.

And those promised benefits SHOULD be paid; a deal is a deal and a promise is a promise.

Considering moving new hires to a 401(k) system has at least one major benefit – once you know what you’re going to pay out (e.g. match the first 5% of the employees’ investments dollar for dollar). Your expenses become much more predictable year over year.

Yes, this will have to be negotiated with the labor unions but it can be done, especially in this economy.

“Avon’s contribution into the 401(k) plans is a third of the cost of the defined benefit system they were in.”

If we could just save 50% let alone 67% we MUST take a look at it.

It will take many years to change everyone over by attrition so the initial savings is going to be minimal and it will slowly grow.

The savings will come and those of us that stay in Wallingford into our older years will get some benefit of this lower cost and through the need of less taxes due to the change from the current obligation.

Future residents and businesses will reap the larger rewards.

None of it will happen until we start work today.

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FROM WALLINGFORD - It’s your town

As originially published online at MyRecordJournal.com and in the Sunday Record Journal print edition on January 3, 2010

There was a lot of activity in Wallingford over the course of 2009.

Updating the town website in compliance with House Bill No. 6502, parking issues on Center and Main streets and downtown in general, dredging project at Mackenzie Reservoir, to name just a few - there was a lot on Wallingford's plate at the beginning of the year.

The 2009 budget came along with work on the Reskin Drive bridge (which is still not completed, much to the chagrin of the residents in the area).

There was the cease-and-desist order given regarding the publishing to the web of the Government TV-produced-programs in April which included Town Council and other public meetings, despite the purchase of brand new remote-controlled cameras in the Town Council Chambers.

Charter Revision hearings were held and the finished topics were given some input from the council and the people. The final questions were delivered to the electorate where they were effectively summarily dismissed by the voters that turned out.

While it was one of the lowest voter turnouts in recent history for a local election, the ones that did come out spoke loudly - "steady as she goes on the charter; we are content with the governing playbook for the town."

Regardless of whether it was low turnout, charter revision questions, lack of a Democrat candidate for mayor or the fact that it was partly cloudy - voters changed the makeup of both the Town Council and the Board of Education for the next two years.

So, where are we headed for 2010?

Unfinished issues, such as the Choate proposal to build the Environmental Center and asking for the closure of Old Durham Road, will likely resurface.

Issues with downtown are still open for discussion and action - from the parking situation which hasn't gotten any better to the new overlay district being proposed.

There is the issue with the Police Department's needs for expansion. This will not occur this year; it needs further discussion because actions need to take place ahead of any proposed work.

Is the Wooding-Caplan property to be used for this cause, or another piece of property elsewhere?

If another property is chosen, you still have to address "what do we do with Wooding-Caplan"?

Budget season will be on us a lot faster than most would like, and with the education portion of the budget greater than 60 percent of the entire budget, it is going to be a difficult pill to swallow.

Wallingford will have to deal with local taxes in conjunction with less available state funding for prior programs.

How the upcoming revaluation will affect the mill rate and whether it impacts homeowners or businesses equally or throws one out of the current alignment with the other remains to be seen.

Wallingford has famously worked to budget to a certain degree the expected spend for the year and tries to hold that line, sometimes cutting back or out something to keep from going into the red.

The taxes need to be collected in order for spend to occur; this is going to be a big challenge this upcoming year, unlike anything Wallingford has seen in recent memory.

There are a lot of other things that are going to be coming up over the course of the year that I don't have the space to present.

Your say of what is to happen with your town didn't end at the voting booth this past November - it was just the start.

Make sure you stay informed and engaged all year. Make it a point to have your voice heard either to your representatives or through them. Have them base decisions which are representative of what you want. Do not have them make the decisions for you.

It's your town - get informed, get involved.

Democrat and Republican caucus information for Wednesday January 6, 2010

This is a follow up to my post http://bit.ly/5iQ7Rr regarding the notice of caucus to endorse candidates for election to the Democratic Town Committee of Wallingford which is to take place on January 6, 2010, at 7:00 p.m. at

Dag Hammarskjold Middle School, 106 Pond Hill Road, (Districts 1, 2, 3, 4, 8 & 9)

and

James Moran Middle School, 141 Hope Hill Road, (Districts 5, 6 & 7)

to endorse candidates for election to the Democratic Town Committee and to transact such other busi­ness as may be proper to come before said caucus.

An article titled Routine caucuses expected was published in the Sunday January 3, 2010 edition of the Record Journal which included information regarding the Republican caucus which I did not have.

According to the article the Republicans will hold their town-wide caucus at Brothers Restaurant, 33 North Cherry St., at 8PM. on January 6, 2010.

My big thing is for people to get informed and get involved and that applies to everyone – Democrat, Republican and all of the smaller parties and independent and unaffiliated voters as well.

I wanted to make sure that now that I have this additional information for the Republican caucus that I post it up.

I personally do not have any other information regarding the details of the Republican caucus other than what was posted in the paper but I am certain that if you have questions you can reach any of the the Republican councilors or councilor-elect members and they would be sure to assist.