The Atlanta City Council will have the opportunity Monday to vote on a sweeping pension overhaul that may fix its $1.5 billion pension shortfall.
Ten votes are needed, and late last week several people -- from both the administration and the City Council -- estimated that at least nine council members are ready to vote yes. A poll of council members was inconclusive, as several council members did not want to publicly reveal their hands.
“I don’t think there are 10 votes for any proposal on the table right now,” City Council President Ceasar Mitchell said. “But I believe we have the opportunity to come up with a decision that the employees and taxpayers can live with.”
In addition to Monday's council meeting, where pension legislation is on the agenda, the council has, as a buffer, also set a special work session for Tuesday to answer lingering questions. Mitchell has also called for a special council meeting Thursday where a pension discussion and vote would be the only item on the agenda.
That means that while a vote can happen Monday, it could be pushed back to Thursday -- which would still beat Atlanta Mayor Kasim Reed’s deadline of June 30.
“It appears that council is working hard to move forward on this much needed reform, said Sonji Jacobs Dade, Reed's communications director. "This is too important of an issue for the administration to take anything for granted at this point.”
But after last week, when the Finance Committee forwarded a proposal to the full council with no recommendations -- after the council had previously agreed to wait until fully vetting an alternate proposal by Councilwoman Felicia Moore -- anything is possible.
If 10 votes can be secured, there is nothing to stop someone from calling a vote.
The plan on the table, a proposal by Councilwoman Yolanda Adrean, combines a traditional pension plan that promises reduced benefitswith a 401(k)-style retirement plan that shifts more risk to employees.
It calls for a 1 percent multiplier plus up to an 8 percent fully matched 401(k), with only the first 2 percent mandatory. A recently hired police officer, for example, could expect the defined benefit portion of his pension to be 25 percent of his pay after working 25 years, with the remaining coming from defined contributions, depending on how much they put in.
The proposal also would reduce future cost-of-living increases of retirees’ pensions.
New hires would be funneled into the 401(k)-style plan only. Future employees would enter into a Social Security retirement program as well. For new employees, the city would match employees' contributions up to 8 percent; a 2 percent contribution by both the city and employee would be mandatory.
Moore’s plan calls for employees to contribute 5 percent more toward their retirement packages, which would have saved much of their future benefits. Her plan would require a 13 percent contribution, while Adrean’s called for 10 percent. Under both plans, an employee would have to contribute 13-14 percent to retire with benefits close to what they get now.
City workers loved the Moore plan, but Reed’s administration called it catastrophic.
Six other council members joined Adrean in signing her proposal: Keisha Lance Bottoms, Howard Shook, Alex Wan, Aaron Watson, H. Lamar Willis and Ivory Young.
Councilwoman Carla Smith is also ready to vote for it.
Moore and Councilmen C.T. Martin and Michael Julian Bond have indicated they would vote against the current plan, and Natalyn Archibong said Friday that she is not ready to vote on it.
The three wild cards appear to be Councilman Kwanza Hall and Councilwomen Joyce Sheperd and Cleta Winslow.
A spokesman for Hall said he is interested in a proposal that would include elements of Moore's plan.
Phone calls to Sheperd and Winslow were not returned Friday.
If the plan wins approval, it would mark a new chapter in the city’s gyrating approach to its pensions.
In 2001, the city decided to close its largest plan -- the general staff’s plan -- to new hires to cut costs. But the city reopened that plan a few years later and then boosted benefits for that plan and separate plans for police and firefighters without figuring out how to fund them.
Those decisions, along with the recession that began in 2008, swelled the pension plans’ total deficit to $1.5 billion by 2009 and saddled the city with annual bills of more than $100 million to keep the plans afloat.
Atlanta's pension struggle is similar to those being fought by the state of Georgia, several metro area counties and a number of major U.S. cities. Atlanta joins a handful of large cities and scores of smaller ones -- mostly in California -- that have crafted plans to cap swelling pension bills.
Closer to home, the state’s two largest pension plans were at least $10 billion underwater in 2009, but state officials and pension experts say they’re in better shape than many pension plans -- including Atlanta’s.
Some large metro Atlanta counties -- including Cobb, Fulton and Gwinnett -- and one of the state pension plans already have attempted to cut costs in ways similar to Atlanta. DeKalb County is considering a hybrid plan similar to Adrean's.
Pension scorecard
A poll of Atlanta City Council members on Councilwoman Yolanda Adrean's proposal to overhaul the city's pension plans is inconclusive because some members chose to keep their stances private. But several people on the council and in Mayor Kasim Reed's administration say there are nine votes in favor. Indicators, based on interviews and prior votes, at this time, break down the voting this way:
For the plan
Yolanda Adrean
Keisha Lance Bottoms
Howard Shook
Carla Smith
Alex Wan
Aaron Watson
H. Lamar Willis
Ivory Young
Against the plan
Natalyn Archibong
Michael Julian Bond
C.T. Martin
Felicia Moore
Wild cards
Kwanza Hall
Joyce Sheperd
Cleta Winslow
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