Pension Concerns Dominate Work Session Tuesday

Back in their saddles following an August hiatus, members of the Falls Church City Council reviewed a daunting work plan for the coming months leading to the adoption of the next annual budget in April 2012. City Manager Wyatt Shields presented the draft plan at this Tuesday’s Council work session, an updated version of the plan initially crafted at the Council’s Aug. 3 mini-planning retreat.

Critical challenges for the Council are in the areas of working with the School Board on the budget – with the first big moment being a joint work session with School Board members on Nov. 1 to include discussion of a revenue sharing approach – the status of retirement and pension plans, and the prospect for adding parking in the downtown part of the City.

Tonight, Councilman Ira Kaylin will represent the City at an important meeting of the Northern Virginia Transportation Council in Arlington that will include a discussion of the proposed trolley line that is designed to bring light rail from the Pentagon along Columbia Pike and up Route 7 to Tysons Corners.

Among other things, the News-Press has learned that the rail could bypass Falls Church by detouring off Route 7 at Seven Corners to route through Merrifield. Merrifield’s current mixed use development explosion and the superior clout of Fairfax County politically are considered to be factors, along with the prospect that Falls Church could find itself unable to widen Route 7 (Broad Street) sufficiently to accommodate the line.

But while future light rail may be on the agenda this week, along with Arlington’s plans for a west entrance to the East Falls Church Metro station, it is other matters that will come before the Falls Church Council in the next months which will be more urgent.

In particular, there is the matter of unfunded pension liabilities, a problem directly attributable to the national economic malaise that has eroded the value of the City’s pension fund investments, as it has almost everywhere.

Tuesday, Falls Church Council member Johannah Barry cited a report by Michael A. Fletcher on the front page of Tuesday’s Washington Post on the pension crisis developing in Rhode Island. Only 48 percent of the state’s pension system is funded now, and it is worse in some localities. Last month, the city of Central Falls, Rhode Island, with 19,000 residents not that many more than Falls Church, filed for bankruptcy, according to the Post account, in part because its pension costs were unsustainable. As a result, retirement checks to former police and firefighters were cut by more than half, at the same time the retirees were facing large increases in their health care coverage costs.

Kaylin told his F.C. Council colleagues Tuesday that he intends to meet with leaders of the Virginia Retirement Service (VRS) in Richmond soon to get a read on the health and solvency of the state’s system. He said it may help get a better handle on what the City might expect to face by the spring, although it was noted that recommendations from the VRS seldom get much respect from the State Legislature.

Kaylin suggested that some City officials involved in human resources and financial matters accompany him to the meeting.

An important date for the Council on such matters is tentatively set for Oct. 3, when the annual reports on the City’s pension and retirement plans are due to be presented at a Council work session, and a discussion with City’s volunteer Retirement Board and the Employee Benefits Task Force on changes to the pension plan to provide for sustainability, and general compensation policy.

While there have been salary freezes for City employees each of the last three years, a leading official of a major regional jurisdiction commented to the News-Press this week that resorting to a pay freeze is something that can work in a crunch one time, but to resort to it more often is not wise, due to morale and related factors.

Prior to the pension and retirement discussion, however, at the Council’s Sept. 19 work session it will receive the Fiscal Year 2011 Year-End Report and assessment of the City’s overall financial condition from Finance Director Richard LeCondre. Then, capital funding and fund balance levels will be considered, along with revenue stabilization options. An initial report on revenue sharing options with the City schools will also be presented by the Council-Schools liaison committee.

In same meeting, a budget calendar will be adopted for the coming year, with budget guidance to begin Nov. 1 at a joint Council-School Board work session. The Council is expected to define core City services, based on its “vision and values” statement, by Nov. 22, and by next spring to agree to a 20-year facility plan for the schools and general government.

While revenue sharing options with the School Board will come up at the joint session on Nov. 1, it will not be until early 2013 that a study may be conducted on the consolidation of the general government and school operations, something that will require agreement from the School Board before proceeding.

In October, a public hearing will be scheduled on the subject of identifying the “highest priority opportunity areas” for new development in the City. The goal will be, by next spring, for the council to adopt updated land use plans based on an assessment of that.

By this December, a major review of the City’s inter-jurisdictional contracts, with possible amendments, will be conducted. This, Shields told the Council Tuesday, will involve some big ticket items.

The City’s efforts at reducing carbon emissions, adopting a watershed plan, and improving regional cooperation on water service issues will also be ongoing, with the adoption of a regional water supply plan due in October.

Also in October, the Council hopes to adopt a plan for use of the City’s affordable housing funds, and to update the City’s affordable housing policy by next February.

By next May, the City hopes to kick off a Downtown Business Partnership Initiative aimed at improving the business environment, addressing regulations, signage, trees, parking and aesthetics. The development of a plan to increase public parking in the downtown area – either through a public-private partnership or municipal financing – is expected by next June.