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From YouTube: Municipal Pension Press Conference - 3/4/15
Description
Mayor William Peduto & Auditor General Eugene DePasquale. discuss legislation to address Pennsylvania’s growing municipal pension crisis.
A
My
name
is
Eugene
DePasquale
of
Pennsylvania
auditor-general
here
with
mayor
Peduto
and
his
team.
We've
recently
completed
our
audit
of
the
Pittsburgh
three
municipal
pension,
which
would
be
police,
fire
and
non-uniformed
and
we're
here
today.
As
you
know,
we've
we
talked
about.
We
announced
the
beginning
of
the
audit,
and
this
is
where
I
first
talked
about
our
municipal
pension
report
and
so
we're
here
to
talk
about
not
only
the
completion
of
the
audit,
but
where
things
stand
in
Pennsylvania,
where
they
need
to
go.
A
The
the
starting
point
that
you
should
realize
with
the
completion
of
our
audit
is
that
the
city
of
pittsburgh
has
done
everything
just
about
that.
We
have
asked
them
to
do
in
the
past
and,
financially
speaking,
is
actually
doing
more
than
has
been
asked
as
far
as
putting
revenue
into
their
pension
from
parking
and
casino
sources
of
revenue.
A
They
lower
their
anticipated
rate
of
return
and
they
are
again
putting
more
money
in
and
even
the
mlo
obligate
municipal,
mandatory
municipal
obligation
would
require
them
to
do,
and
even
with
that,
they
are
still
following
behind
their
funded
ratio,
which
is
sort
of
the
percentage
of
their
unfunded
liability
when
from
sixty-two
percent
in
2011
the
fifty-eight
percent
in
2013.
This
is
largely
due
to
the
fact
that
the
city
lowered
its
investment
return
assumption
from
eight
to
seven
point
five.
A
But
having
said
that
again,
I
would
I'm
going
to
stress
this
a
couple
times
putting
more
money
in
than
they
were
required
to
do
and
doing
practically
everything
that
they've
been
asked
to
do
and
in
a
booming
stock
market
and
where
we,
you
know
the
last
couple
years,
we've
had
a
booming
stock
market.
Certainly,
in
the
period
of
this
audit,
the
two
period
of
two
year
period
of
this
audit,
the
stock
market
has
been
increasing,
still
falling
behind
as
a
January
first
2013,
the
pittsburgh
pension
funded
assets
of
675
million
of
assets
and
liabilities.
A
The
amount
needed
to
meet
current
and
future
pension
obligations
is
one
point,
one
six
billion
dollars
this
issue.
The
issue
with
the
financial
stability
of
municipal
pensions
is
not
just
a
Pittsburgh
or
a
big
city
issue.
It
is
a
statewide
issue
and
frankly,
it
is
a
national
issue.
Once
again,
I
am
calling
on
the
state
legislature
to
take
action.
I
was
heartened
by
the
governors,
including
pension
reform
in
his
budget
address
yesterday.
I
believe
he
knows
this
is
an
issue
that
needs
to
be
addressed.
I
have
been
happening,
pension
challenges
all
over
the
state.
A
A
There
is
just
shy
of
eight
billion
dollars
in
Pennsylvania
of
unfunded
municipal
pension
obligations.
Now
the
reason
why
I
believe
not
just
from
a
financial
standpoint
but
from
a
moral
standpoint,
why
the
legislature
and
the
governor,
certainly
working
in
partnership
with
mayors
of
Republican
Democratic
mayor's
all
over
the
state.
Why
we
need
to
address
this
saw
what
happened
in
Detroit.
City
declares
bankruptcy
goes
before
bankruptcy
judge
and
the
retirees
who
were
basically
banking
on
that
money.
A
Bankruptcy
judge,
orders
them
to
get
ten
cents
on
the
dollar.
The
human
toll
on
that
is
devastating
people
lose
their
homes.
The
economy
is
damaged
in
those
areas.
I
believe
we
should
have
the
courage
in
Pennsylvania
to
act
before
that
happens
in
every
day.
That
goes
by
every
day.
The
problem
gets
more
financially
difficult.
Again,
I
want
to
applaud
the
mayor
and
his
team
on
the
great
work
they
have
done,
using
parking
tax
revenue
and
casino
revenues.
Basically
pouring
money
into
the
system.
We
have
some
cities,
city
of
Bradford
Pennsylvania.
A
We
repeat
that
one-third
of
all
their
general
tax
revenue
goes
into
just
to
pay
their
mandatory
municipal
obligation,
so
that's
before
they
pay
one
cop
one
firefighter
before
they
fix
one
park
bench
one-third
of
their
general
fund
revenue
pays
for
their
mandatory
municipal
obligation
for
their
pensions,
but,
as
I
said
before,
what
Pittsburgh
is
doing
now
simply
is
not
enough.
We
all
need
to
work
together.
The
mayor
talked
a
little
bit
about
it,
but
Republicans
and
Democrats
from
the
local
government
side
mayor's
from
all
over
the
state
are
working
together
on
this
issue.
A
We
need
a
comprehensive
solution
to
this
and
again
I
want
to
commend
the
mayor
and
his
team
for
moving
in
the
direction
that
we've
asked
him
to
move.
There
are
a
couple
other
issues
on
benefit
calculations
that
we
did
find
in
our
audit.
That,
from
a
previous
audit,
had
not
been
corrected
through
ordinance
and
it
would
take
an
ordinance.
The
mayor
and
his
team
has
now
drafted
those
ordinances,
I
believe
they're
working
with
City
Council,
now
on
making
sure
that
those
ordinances
go
through.
A
So
that's
it
so
that
the
benefit
calculations
can
be
more
in
line
with
what
we
feel
are
the
appropriate
benefits
moving
forward
so
with
that
is
certainly
the
mayor
and
his
team
are
going
to
offer
a
few
comments.
I
appreciate
you
being
here
and
then,
when
they're
done,
I'm
going
to
be
more
than
happy
to
take
any
questions
about
this
or
anything
else.
You
want
to
talk
about.
B
B
What
we
need
to
know
is
that,
while
the
pension
is
an
obligation
we've
made
to
employees,
it's
also
a
financial
black
hole.
The
way
the
pension
is
structured
is
that
last
year
we
put
11.3
percent
of
our
budget
into
the
pension.
This
year
we
put
12.9
percent
into
our
budget,
but
that
doesn't
sound
like
a
big
leap,
but
you
need
to
remember
that
we
actually
increased
our
budget
because
of
truth
and
budgeting
by
28
million
dollars.
So
if
we
had
kept
the
same
budget
level,
we
would
be
increasing
to
around
thirteen
percent
every
year.
B
I
expect
this
to
go
up
as
as
a
percent
of
the
city
operating
budget,
and
unless
we
make
some
changes-
and
there
are
many
changes
that
can
be
made,
we
cannot
possibly
continue
to
do
this.
We
can
get
to
situations
like
Scranton,
where
we
are
putting
where
we
would
be
required
to
put
in
half
the
budget
or
more
into
pension
obligations.
That's
just
not
acceptable
to
the
taxpayers.
It's
not
acceptable
to
the
pensioners
because
it
risks
their
benefit
long
run
and
it's
not
an
acceptable
way
to
run.
C
Thanks
first
I
want
to
thank
the
Auditor
General
for
doing
this,
not
only
for
Pittsburgh
and
not
only
for
the
older
communities,
all
throughout
the
state
of
Pennsylvania,
but
for
all
Pennsylvanians.
We
have
a
system,
that's
broken
and
the
system
needs
to
be
reformed.
You
know
we
we
did
all
that
we
could,
within
our
first
year
in
office,
to
be
able
to
take
care
of
the
things
that
we
have
the
ability
to
take
care
of
without
asking
for
any
help
from
any
outside
source
over
this
next
year.
C
What
we
need
to
do,
or
two
major
things,
number
one
is:
we
need
to
have
a
strong
partnership
with
our
nonprofits,
mainly
the
the
large
institutions,
to
be
able
to
pay
their
fair
share
into
a
new
program
in
number
two.
We
need
to
get
common-sense
pension
reform
completed
in
Harrisburg,
and
let
me
be
clear
about
it,
because
the
Auditor
General
knows
it
by
the
numbers.
I
know
it
from
the
conversations
with
other
mayors
and
council
members
from
across
Pennsylvania.
Without
reform
from
Harrisburg
older
communities
throughout
Pennsylvania
will
face
pension
crisis
and
inevitably
bankruptcy.
C
Number
two
for
new
hires:
only
the
shift
to
a
cash
balance,
hybrid
plan,
a
balanced
and
financially
sustainable
approach.
That
includes
acts,
aspects
of
both
a
defined
benefit
and
a
defined
contribution
plan
number
three:
it
authorizes
an
optional
457
plan
as
an
additional
employee
retirement
tool.
Number
four:
it
requires
pensions
to
be
calculated
on
base
pay
in
only
a
small
percent
of
overtime.
This
will
curb
the
practice
of
spiking
we're
increasing
the
final
average
salary
with
excessive
overtime
in
unused
sick
or
vacation
days
number
four:
it
removes
the
pension
benefits
from
the
collective
bargaining
process.
C
It
establishes
a
pension
plan,
portability
options
for
new
hires.
So
if
you
should
work
for
the
city
and
then
go
to
the
county
or
work
for
one
municipality
and
then
work
with
another,
your
pension
plan
would
be
able
to
follow
you.
Oh,
it
improves
the
job
and
pension
security
for
uniform
unions,
those
that
are
in
police
and
fire
which
have
their
own
face.
The
same
challenges
to
be
able
to
sustain
that
pension
plan
for
their
existing
employees
without
any
changes
to
new
employees
will
never
be
able
to
see
the
pension
plans
fully
paid.
C
C
Without
change.
Without
common-sense
reform
from
Harrisburg,
the
state
municipal
pension
plan
is
doomed
to
fail
and
we
are
not
given
the
authority
nor
the
power
nor
the
options
by
the
state
legislature
to
be
able
to
control
what
that
journey
is,
and
we
can't
kiss
completely
tax
people,
because
all
we'll
be
doing
is
forcing
them
out
to
the
newer
areas
with
less
of
a
burden
because
they
didn't
have
the
employees
years
ago.
It's
a
cycle
that
will
hurt
not
only
older
communities
but
all
of
Pennsylvania
in
creating
an
unsustainable
environment
for
all.
C
A
Ordinance
is
it
was
specific
about
the
ordinances
with
the
benefit.
Calculations
had
not
been
done
from
our
previous
audit
that
again
did
not
get
completed
and
that,
but
we've
seen
now,
we've
worked
with
them
on
their
now
dry.
They
may
be
completed
and
ready
for
council
submission
I'm,
not
sure
about
that.
But
those
were
the
items
that
that
had
not
been
completed,
that
we
wanted
to
see
that
they've.
Now
that
they've
not
begun
the
process
of
getting
those
to
count.
Council
and.
B
E
A
Think
if
this
is
done,
right,
I
think
it
would
be
would
be
minimal
at
best.
I
think
you
know
bowman
you're
talking
about
broadly
speaking
for
the
future
of
the
city,
and
I
can
tell
you
what's
happening
in
some
other
cities.
I
think
look
I
grew
up
here.
Pittsburgh
is
some
of
the
best
parks
in
the
world.
You
know,
if
you
end
up
putting
having
to
put
more
money
into
the
pension,
that's
less
money,
that's
available
for
parks,
less
money
available
for
public
safety,
more
fire,
more
police,
so
the
quality
of
life.
A
If
this
is
not
tackled,
the
quality
of
life
for
the
whole
city,
I
think
would
be
would
be
in
very
parallel
shape
without
addressing
this
in
a
fair
and
common-sense
way.
So,
yes,
I
think
that
there
is
some
give-and-take
with
all
this
with
on
the
employee
side
of
it.
But
I
think
that
if
this
is
done
in
the
fairway,
this
would
still
be
a
very
attractive
place
for
people
to
work.
There.
F
C
C
C
C
Be
basically
that
there
would
be
representatives
from
each
that
would
look
on
an
annual
basis
of
what
the
city's
needs
are
and
where
the
goals
of
not
only
dealing
with
the
past
but
trying
to
build
towards
the
future
and
just
as
the
promise
board
works
and
creating
a
program
that
would
work
in
the
similar
way.
But
at
this
point
the
details
of
its
still
are
forthcoming.
There's
just
been
the
general
discussion
back
and
forth
between
the
four
institutions
and
and
our
administration.
C
D
C
My
lifetime,
that's
what
I
say
when
I
talk
about
an
LRT,
no
I,
you
know
it's
a
we're
good
for
the
next
five
years
on
swimming
with
our
head,
barely
above
the
water,
but
in
order
to
be
able
to
do
much
more
than
that
and
looking
at
something
that
goes
beyond
are
just
basic
operating
and
capital
budget.
We
need
that
partnership
with
them.
C
I,
don't
know
if
I
can
say
the
same
without
the
reform
coming
from
Harrisburg
in
the
next
five
years
by
the
trajectory
that
the
auditor-general
is
shown
for
this
city
and
the
examples
that
he
has
been
able
to
highlight
in
other
cities.
I,
don't
think
we
have
that
type
of
time
frame.
We
have
to
get
that
done
immediately.
C
I
can
get
a
list
for
you
this
afternoon.
Pennsylvania
Municipal
League
has
a
bunch
of
signatories
on
to
it,
including
myself,
and
there
are
a
number
that
were
a
part
of
a
group.
A
few
years
ago,
called
the
cities
in
crisis
committee,
great
name
for
a
group,
but
who
also
all
signed
off
on
it.
I
think.
A
I,
don't
want
to
speak
for
them,
but
I
do
know
that
I'm,
not
the
statewide
chamber,
not
that
they're
opposed
to
this,
but
the
local
chambers
in
each
of
these
communities
have
been
a
vigorous
part
of
this
discussion
as
well.
I
mean
to
be
blunt,
a
lot
of
Mayors
are
Democrats
and
audit
chamber.
Folks
are
all
right:
it's
not
a
hundred
percent
on
either
side,
but
does
it
show
that
you
know
this
is
an
issue?
A
That's
breaking
down
all
the
ideological
barriers,
because
I
do
know
that
you
know,
for
instance,
the
community
I
live
New,
York
City,
Mayor
Bracy
is
a
Democrat
most
of
the
chamber.
Folks,
not
all
most
are
Republican,
but
they
have
both
been
a
part
of
these
discussions.
You
know
not
so
much
during
the
party
ID
of
the
Greater
Pittsburgh
chamber,
but
I
know
that
Dennis
jablonski
in
his
group
in
the
Greater
Pittsburgh
chamber
is
certainly.
A
F
A
A
So
I'd
like
to
think
that
when
the
mayor
and
I
stood
together
in
eyeliner,
first
ever
statewide
municipal
report
that
showed
the
liability
at
that
time
was
6.7
billion
that
helped
raise
the
stakes
we
did
that
to
be,
but
we
timed
that
up
with
a
key
port
in
the
in
the
gubernatorial
race
to
make
it
part
of
that
discussion
and,
and
so
as
we
move
forward,
I
need
to
be
relentless
on
the
public
relations
side
of
it
to
be
born.
But
now
we
have
real
numbers.
A
I,
don't
know
how
any
legislator
in
the
Scranton
area
cannot
be
cannot
be
part
of
a
pension
solution.
When
there's
when
there
are
municipalities
staring
bankruptcy
in
the
face.
Certainly
I
know
that
the
mayor
has
been
as
good
as
can
be
and
reaching
out
to
ledge
the
legislators
in
this
area.
I,
don't
know
how
legislators
are
going
to
look
that
you
know
their
voters
in
the
eye
is
we're
moving
forward.
A
If,
then,
if
this
isn't
addressed,
and
we
have
I
believe
an
ally
in
the
governor's
office,
who's
going
to
be
working
collaboratively
to
try
to
get
this
done,
and
certainly
we've
seen
the
majority
party
in
Harrisburg,
you
have
a
Democratic
governor,
Republican
legislators
that
have
become
more
interested
in
this
issue.
Again,
a
lot
of
the
Republican
legislators.
Don't
represent
cities,
that's
just
no,
it's
just
what
mathematically
it
is,
but
a
lot
of
them
have
begun
to
become
more
interested
in
the
issue.
To
reason
number
one
I
think
some
have
disc
included.
A
It's
the
right
thing
to
do
to
is
there's
just
a
financial
component
of
it.
If
a
city
goes
bankrupt
by
the
Pennsylvania
Constitution,
all
municipalities
are
technically
creatures
of
the
state,
which
means
the
state
would
then
have
to
deal
with
the
liability.
So
again,
the
decision
you
need
to
make
as
a
legislature
is
when
do
you
want
to
deal
with
the
consequence
mayor
if.
E
C
The
nonprofit
contribution
that
we
putting
together
is
not
based
on
the
operating
budget
in
the
day-to-day
operations.
It
will
help
us
to
take
care
of
our
our
long-term
debt
issues,
our
capital
budgets
and
our
our
pension
plans.
It
also
allow
us
to
make
the
needed
investments
we
need
to
within
neighborhoods
that
haven't
seen
growth,
job
opportunities
and
helping
to
spur
even
more
growth
in
the
areas
that
we
see
growth,
technology,
medicine,
education,
so
the
discussions
were
having
with
them
is
not
for
their
role
to
be
able
to
fill
a
hole
within
the
budget.
C
We
did
that
last
year
when
we
created
the
new
budget
and
we
had
to
come
up
with
over
30
million
dollars
in
new
revenue.
We
did
that
we
made
sure
that
we'd
be
on
solid
ground,
so
that
now
moving
forward.
That
would
be
a
benefit
to
help
us.
However,
the
pension
problem
is
only
getting
bigger,
it's
like
being
in
a
boat,
that's
taking
on
water,
and
you
have
the
same
bucket
in
a
bigger
and
bigger
hole,
and
the
boat
keeps
sinking
faster.
C
If
we
don't
get
to
the
resolution
and
the
state
legislature
fails
to
act,
it
won't
only
be
Pittsburgh.
It
will
be
Washington,
PA
and
Butler,
and
wilkes-barre
and
Scranton
in
Erie,
in
meadville,
in
Johnstown
and
every
other
older
community
throughout
this
state,
because
the
present
system
that
they
have
is
destined
to
fail.
F
Is
it
fair
to
say
that,
just
back
on
that
subject
again,
a
health
care
provider
like
a
ukmc
could
provide
the
city
with
a
sort
of
in-kind
service
for
say
health
care,
and
that
would
free
up
money
from
the
general
operating
budget
to
put
in
the
pensions
is
that
is
heaven
without
good
way
to
cook
example.
That's.
C
C
C
One
last
thing
I
want
to
put
on
the
record,
because
the
question
wasn't
asked
to
me:
why
do
you
think
it's
actually
going
to
get
done?
Because
for
the
first
time
we
have
a
quarterback
in
Harrisburg,
that's
taking
it
on
a
full
responsibility
of
making
it
get
done,
and
it's
somebody
who
can
walk
into
the
governor's
office
is
an
ally,
but
simply
that
the
same
way
walk
into
Republican
leadership's
office
with
respect-
and
that's
our
state
auditor
general
and
that's
what's
been
missing.