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Chattanooga: Resolution reached for pension fund

By: Cliff Hightower
(Contact)

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Audio: Chattanooga City Council -- Aug. 26, 2008

The Chattanooga City Council unanimously approved an ordinance Tuesday night changing the Fire and Police Pension Fund, which has come under controversy the last several weeks over whether changing its provisions would have to go to a referendum.

The approval of the measure as an ordinance, and not a charter amendment, effectively ended speculation it would go on the Nov. 4 general election ballot, officials said.

“They took up our concerns,” said Frank Hamilton, a Fire and Police Pension Fund Working Review Committee member and the fund’s administrator, about the City Council.

The largest changes in the resolution were changing the seven-member board to an eight-member board and allowing employees to choose between two deferred retirement option programs, officials said.

The first program would increase employee contributions from 8 percent to 9 percent and allow the employee to remain under the current plan. The second program would let the employee keep the 8 percent contribution but eliminate the cost of living adjustment to the DROP benefit, have a lower interest rate and use the final average earnings at the beginning of the DROP period.

During the legal and legislative committee meeting Tuesday, city officials and fire and police fund personnel went to another room and ironed out the changes. Councilwoman Carol Berz mediated the talks.

When the budget, personnel and finance committee met the changes were finalized.

“Is everyone in agreement now?” Ms. Berz asked, looking around the conference room. “Yes, yes, yes. Good.”

Several city firefighters and police officers had packed the conference room of the City Council Building, anticipating the issue would go to referendum.

Also, in other business, the City Council in a 5-3 vote approved a measure allowing a change to the city’s charter that would call for both the council and the mayor’s office to have responsibility over the internal auditor.

Council members Leamon Pierce, Luther Shockley and Sally Robinson voted against the measure. Councilwoman Carol Berz abstained.

Mr. Pierce discovered in April that the city’s charter calls on the council to have control of the auditor. He said he thought it was the council’s duty to maintain that control. He called on council members to accept that responsibility and not pass the charter amendment.

“You’re shirking your responsibilities,” he said. “You’re giving into the administration.”

Mayor Ron Littlefield told council members that he was on the council that adopted the internal auditing charter in 1990 and it was a “beginning.”

“I think it’s time to modify and share responsibility,” he said.

But Mr. Pierce disagreed.

“If we’re going to make everything joint, we’re just an extension of the mayor’s office,” he said.

Councilman Dan Page said he would support the measure, based on the fact that if the council took over internal auditing then the mayor also would have an auditing department, creating two government entities, he said.

“There is an issue with setting up a whole new department,” he said.

Council members passed the measure on first reading because city attorneys had said Tuesday night was the deadline to get any type of referendum on the Nov. 4 general election ballot.

The council will discuss and vote again on the measure next week during a second and final reading.

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