Letters to the Editor: May 29 – June 4, 2014
City of F.C. Pension Plans Are Volatile, Expensive & Obsolete
I read the Letter to the Editor in last week’s News-Press from Jan Hertzsch who wondered why anyone would object to using $11 million from the water sale to fund pension obligations and came away with some slightly different concerns.
First and foremost is, why are we still offering a traditional pension plan to City employees in this day and age? I doubt there is a more volatile, expensive, and obsolete form of employee benefit available that is single-handedly capable of creating financial havoc for the City. The best managed plans in the world cannot fully protect against low discount rates, market adjustments and the resultant increase in funding obligations and on-going liabilities. I suspect there are other applicable types of retirement benefits, like cash balance or 403(b) plans, which would adequately provide for City employees without the associated uncontrollable elements found in the current plan.
Why not freeze the existing plan and switch to a form of benefit that is more quantifiable and manageable? And while I am not familiar with the specific funding level of the current plan, why place $11 million in a benefit plan where, as I understand it, the funds become irretrievable for any other uses, even if the existing plan ultimately becomes fully or over funded?
That doesn’t seem to make much sense or represent the optimal use of the sale proceeds.
Falls Church Needs More Than Just Great Schools
I don’t know about everyone else in “The Little City,” but I know that my taxes went up almost $1,000 for this year’s assessment. I have gone before council on a couple of occasions recently and complain that giving the school every penny they want without consideration for city infrastructure needs, is unsustainable. And, now we have added on to residential taxes another tax, disguised as the infamous “Stormwater Utility Fee.”
The residents of Falls Church pay a higher tax rate than any other adjacent jurisdiction. Why shouldn’t those who move to this community because of the schools pay for the privilege of sending their children to world-class schools.
Only 25-33 percent of Falls Church households have children in our school system. Yet, the schools account for around 50 percent of the city annual budget. If we can charge households for water that they don’t use, why can’t we charge households for the use of the school system by residents who have children in them? It worked fine when we needed money to pay for upgrades to our stormwater system.
For the 66-75 percent of the households that don’t have children in the schools, our return on our investment has eroded. We need more than just schools to build a sustainable community in “The Little City.” Every developer who proposes a project in Falls Church must give voluntary concessions to the school system. Falls Church needs more than just great schools.
Edwin B. Henderson, II
FCNP Editorial Doesn’t Understand Economics
The editorial of “Don’t Give $ to the Banks!” in last week’s News-Press contains some incredibly flawed understanding of economics. The notion that “the City’s money can be doubled in value by simply being deployed for federally-matched transportation purposes. That’s not the lame seven percent the retirement fund option presents, but a 100 percent yield!)” justifies its spending by the fact that it’s federally matched. In other words, one of the wealthiest counties in the nation, benefiting heavily from all of the money that flows into this area from the rest of the country, wants to take some more. Maybe given the current economy, now might be a time to show America that one percenters aren’t always selfish?
Second, putting the money into transportation is not investment, it’s spending. Yes, I understand the importance of capital spending, but good luck paying for a pension liability with a repaved road or bike trail. If anybody at the News-Press doesn’t understand this I would invite you to join me at Mad Fox so that you can match my beer investments for me. I would happily accept that 100 percent yield!
Letters to the Editor may be submitted to [email protected] or via our online form here. Letters should be limited to 350 words and may be edited for content, clarity and length. To view the FCNP’s letter and submission policy, please click here.