Overly generous plans, investment losses, and optimistic investment assumptions
have resulted in underfunded plans and the possibility of tax increases. The
problem exists in most public bodies and needs to be addressed. At this point it will
only cause interested parties to dig their heels in if the discussion centers on how we got here
and who the advocates were. It's enought to know that the city's pension obligations are
seriously underfunded and have been growing much faster than the cost of living. If not resolved,
the impact on Mount Dora will be higher taxes and a larger percentage of city revenues devoted
to retirement expense and less to other areas.
Before I opine too grandly, at least some background. Before retirement I was president of two
commercial banks and owner of several businesses with several hundred employees. I'm a
Mount Dora citizen and spend over half the year in our fine city. My companies didn't have
defined benefit pension plans and neither did any of our competitors. They became relics
25 years ago. Business didn't abandon the defined benefit plans to reduce employee comfort
in retirement, they eliminated them to reduce risk of the unknown, including poor investment
performance, poorly written plans, and employee abuse. Private business, except for some huge
companies, has moved to a 401K match approach. The employer still contributes a large amount
of retirement money and the employee controls his own retierment investments. The risk of
poor performance stays with the employee and there are no plan loopholes to abuse. The employee
owns and controls the assets and can pass any remaining investments to his/her heirs.
I think the city should move in the direction of a defined contribution plan, 401K-ish, which
would allow more accurate budgeting and consistent taxation. We can't use a mulligan on past
errors or mistakes, so employees are due what is accrued. But we can end the plans, provide
an equivalent annuity for what the employee has earned to date, and start a defined contribution
plan. Let's cap our exposure and not count on outsized investment gains to bring us back into
a funded position while continuing to accrue benefits at a rate that far exceeds the inflation
rate. I hope this is of some value as you discuss the issue and manage the city's finances.
Posts
It may be that I'm technology challenged, but I think I'm on to a big conspiracy. Whenever I print, I always get a extra page with no content. It makes no difference whether I use my PC or Mac. Nor does the brand of printer change the result. This has happened for years through many computers and printers.
I don't know what happened to the text in the prior post. Some of the words were cut off, the fonts smaller, the spacing erratic, and probably some other errors. I don't have the patience to figure it out. 
The following was sent to the Mount Dora city council, but it pertains to many political subdivisions including Omaha, Nebraska where I also reside.
God I'm sick of opening the newspaper and always seeing an athlete roaring and giving a fist pump. Why should this be the face of athletics? Why are photographers and editors only enamored with this type of behavior? Lets have some originality.
If anyone needs proof of fat in government the Michael Jackson saga says it all. Government is neverland! why do we let this happen?
