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A radical change city's only hope
Consider the city's pension obligations. In addition to the $1.2 million annual payment that must be made on the bond issue to support the combined pension fund, the city owes at least another $753,000 to keep it funded. That's the minimum amount this year, but it would be wiser to pay $1.6 million now than to ensure much higher payments in years to come. So, where does a city with a declining tax base, declining population and zero growth come up with, say, $2.8 million a year for pensions? Taxation is its only resort, and the more businesses and residents are taxed, the more likely they are to pick up and leave. Tax them enough and they'll have no choice.
How did Washington get into such a predicament? It's complicated. Who's to blame? That's even more complicated, but you might start with plastic.
Fifty years ago, everything from ketchup to shampoo came in a glass container. A lot of the glass was made here. At the peak of the glass industry, Washington had 28,000 residents, many of them employed in local glass factories and spending their money in stores downtown. The city was well able to afford large police and fire departments.
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As prosperity waned, city government made poor decisions as it negotiated contracts with its unions. In 2006, for example, City Council approved a "20 and out" agreement with the fire department, then extended the contract to 2012. A firefighter, regardless of his age, could retire after 20 years of service at half pay. But that half was based on compensation distorted by overtime, so that some firefighters were receiving payment of more than their full salary, for the rest of their lives. And Council approved this despite an actuary's warning that the 20-and-out provision alone would add $540,000 in unfunded liability.
What can be done? The options aren't many and may be politically impossible. Municipal merger is the obvious solution. The city and its surrounding municipalities, which someday will face the same financial turmoil, would benefit greatly by combining police and fire services, as well as others like code enforcement, tax collection and street repair. But the prospects of that happening are almost nil. East Washington Borough, which already depends on the city's fire department, could have easily contracted with the city for police protection when the borough's chief retired recently. Instead, a new chief was hired to oversee 10 part-time officers.
Another option for the city might be a fire department that is part paid and part volunteer, operating on about half its current $2 million budget. This might seem like a radical change, but consider another possibility, and a more likely one if nothing is done: no police or fire protection in the city.
That's where the city is headed now. We hope that those elected to office and the people who put them there with their votes have the courage to acknowledge that reality.
The fire department : 11/2/2009
The firemen surely realize that their pension situation needs revamped. I hope city council tackles that pension problem as one of their priorities this coming year.
