Finance director: City has $80M gap to fill in pension system - Action News 5 - Memphis, Tennessee

Finance director: City has $80M gap to fill in pension system

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The city says a tax hike is a last resort. The council received an earful about massive cuts they would need to make to prevent that tax hike. The city says a tax hike is a last resort. The council received an earful about massive cuts they would need to make to prevent that tax hike.

(WMC-TV) - The City of Memphis has an $80 million dilemma, which is how much the finance director says the city must pay into the pension system.

The city says a tax hike is a last resort. The council received an earful about massive cuts they would need to make to prevent that tax hike.

"To be honest, I'm sick to my stomach," said Memphis Fire Association President Thomas Malone.

Memphis unions and the city administration are at odds over how much of the employee pension fund is under-funded by the city.

"We have an $80 million gap we have to fill," said Memphis City Finance Director Brian Collins.

Collins says their actuary found the pension has $709 million in under-funded debt, but the fire union's actuary says it is actually $301 million under-funded.

"We either have to raise taxes or we have to come up with monies from other sources," said Memphis City CAO George Little.

The city laid out 21 cuts that would help them find money to pay for pension reform, and the cuts would dig deep. It would include "civilianizing" some police officers, cutting fire department staff.

"They're talking about cutting for the next five years? That is ludicrous. As a taxpayer, I am mad as hell that would even come on the board," said Malone.

The council decided to hire their own actuary to settle the dispute over how much the pension is under-funded.

"I think it's a good idea to have a party that doesn't have a dog in this fight, so to speak," said Memphis councilwoman Janis Fullilove.

Other council members say they will need to get as much information as possible as they approach this.

The actuary would cost about $20,000. Council members say that is a small number in the scheme of things.

"No matter how you slice it, no matter how you dice it, we've got to get leaner and we've got to get meaner," said Little.

To see Collins' Pension Benefits Reform Presentation to the Memphis City Council, click here.

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