Council rejects pension-debt-cutting plan

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January 10, 2005 // UPDATED 1:47 pm - April 26, 2007
By: Scott Russell
Scott Russell

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 opponents said they wanted a more comprehensive pension fix.

The three city funds are the Minneapolis Police Relief Association, the Minneapolis Firefighters Relief Association and the Minneapolis Employees Retirement Fund.

The police fund lobbied the Legislature - over city objections - to extend city payment deadlines. While the bill saved the city an estimated $24 million, it also included pension raises worth 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 approving the deal would end any city leverage to get other pension reforms, recommended by a blue ribbon panel.

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 when the city is reducing its police force and giving employees small raises.

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."