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Federal Judge could oversee a solution to Cincinnati's pension mess

Jay Hanselman

Cincinnati Council could vote next week on an ordinance that would essentially let a federal court mediate a permanent solution to fix the city's currently under-funded pension system.  

Mayor John Cranley introduced the idea Tuesday during a city hall press conference.  

One item up for negotiation could be the compound cost of living adjustments some city retirees now enjoy.  Changing that has been a thorny issue.

“It doesn’t do city council a lot of good to vote to do something difficult like retroactively changing someone’s cost of living increase if that vote is overturned by legal appeal,” Cranley said.  “So then you’ve got the worst of all worlds, we’re you’ve made a tough vote politically but then you don’t even get the savings.”

Cranley compares such a negotiation regarding the retirement issue to the collaborative agreement from 2002 that settled a number of pending racial profiling lawsuits filed against the city and its police department.  

Other negotiating points will likely include retiree health care and the city's yearly contribution to the pension system.  The latest proposal could also transfer $100 million from the health care trust of the retirement plan to the pension side to help with the current shortfall.

Cranley wants action on the pension issue before bond rating agencies come to town next week to essentially give the city its credit rating for the coming year.  The city is expecting a downgrade, which means it will cost the city more to borrow money.  The ratings agencies have said they're looking for a permanent fix for the pension problem.

“They’re big question is ‘do you have the political stomach to make the cuts necessary to get the system funded?’” Cranley said.  “This vote of City Council would show that we’ve got more political courage than most cities in this country.  That will be a very powerful message and will have ended the political challenges.”

Council's Budget and Finance Committee will discuss the issue Monday and could vote on the ordinance calling for federal mediation.

Jay Hanselman brings more than 10 years experience as a news anchor and reporter to 91.7 WVXU. He came to WVXU from WNKU, where he hosted the local broadcast of All Things Considered. Hanselman has been recognized for his reporting by the Kentucky AP Broadcasters Association, the Ohio Society of Professional Journalists, and the Ohio AP Broadcasters.