Council rejects pension-debt-cutting plan

The Minneapolis City Council rejected a change in state law that would have reduced its pension fund debt by $24 million over 30 years.

The 8-5 vote Dec. 23 might seem odd, but those speaking against the plan said they wanted a more comprehensive fix to the city's pension problems.

The three city funds are the Minneapolis Police Relief Association (MPRA), the Minneapolis Firefighters Relief Association (MFRA) and the Minneapolis Employees Retirement Fund (MERF).

MPRA lobbied for the bill at the Legislature - over city objections - that extended city payment deadlines. While it saved the city an estimated $24 million in the long term, it also included pension raises that cost an estimated $12 million.

The bill gave the City Council the option to vote it down, and the majority did.

Councilmember Paul Zerby (2nd Ward) said the city's savings was not a sure thing, and approving the deal would end any city leverage to get other pension reforms, recommended by a blue ribbon panel led by Jay Keidrowski, former state finance commissioner.

Among other changes, it recommended merging MPRA into a statewide retirement plan.

Mayor R.T. Rybak opposed the law change and favored going back to the Legislature. He said it was unfair to give raises to one group of retired employees at a time the city is reducing its police force and giving employees small raises. He and others said approving the deal would pass on problems to the next generation.

Ways and Means Chair Barb Johnson (4th Ward) supported the plan. She said it was not a perfect solution, but "it is a solution that gives us some relief. We cannot ignore that."