Reed creates panel to reform pensions

By Eric Stirgus

The Atlanta Journal-Constitution

Atlanta Mayor-elect Kasim Reed announced Tuesday he's forming a panel to tackle Atlanta's costly pension system, which he described as "the toughest challenge the city faces right now."

The city is expected to spend more than $100 million -- about one-fifth of its general fund budget -- on pensions in the fiscal year that ends June 30. In 2002, Atlanta spent just $36 million on pensions.

"It's crippling our city," Reed told reporters.

Reed said he hopes to act on some reforms within his first 60 days in office. He said the problem could prevent him from enacting some of his plans, such as hiring more police officers. The Atlanta Journal-Constitution highlighted the city's pension challenges in its Atlanta Project series in September.

The nine- to 11-member panel will be led by John C. Mellott, the former publisher of the AJC. Mellott, who retired from the newspaper early this year, is a certified public accountant who held several senior financial roles within Cox Enterprises, the company that owns the AJC.

Reed said during the campaign he'd consider changing the time employees could become vested from 10  years to 15. The mayor-elect has also said he'd look into whether the city could enter Social Security to reduce pension costs. Reed said Tuesday he will look seriously at those options.

Reed talked about the city's pension problems early and often during the campaign. He pinned much of the blame for the rising pension costs on the City Council, which approved changes to the pension system in 2001 and 2005 to help Atlanta catch up after years of underfunding its pension plans. Mellott said the panel will offer solutions, not look at the past.

"It will be forward-looking," he said.

In June, the council approved changes proposed by outgoing Mayor Shirley Franklin that reduced how much the city spent on pensions this budget year by about $15 million.

Reed said he hopes to announce the members of the entire panel shortly after Christmas. The mayor-elect said he is working through whether members of the city's unions and employee organizations will serve on the panel.