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There may be no more impactful topic over the past quarter-century than how the city of Wheeling handled its police and fire pension issues.
This past Tuesday morning, as I read Eric Ayres' story on the current state of Wheeling's police and fire pension funds, I recalled my first real introduction into municipal pensions -- and their problems -- in the early 2000s. I found a news story I wrote in October 2000 outlining how the city then was being required to ingest additional money into the funds -- at the time, the annual contribution was about $750,000 each -- and then another story from February 2001 quoting then-Mayor Nick Sparachane saying that if the police and fire pensions were not controlled, it was going to force scaling back of both departments.
Wheeling at that time had a $50-plus million unfunded liability in those pension funds. Projections then were that taxpayers would be contributing $1 million annually into each fund by 2003, and more than $3 million into each fund by 2010.
It's important to consider that Wheeling's general fund budget at that time was $21 million -- about half of where it sits today. Spending 7-8% of the general fund budget on the police and fire pensions -- with that set to grow to 12-15% over the coming years -- would have limited Wheeling's ability to do many of the things (property acquisition and demolition, facade improvement programs, etc.) that have led us to today.
When current City Manager Robert Herron arrived in early 2002, the police and fire pensions funds' unfunded liability had risen to about $60 million. Both funds were about 5% funded.
The city -- and its taxpayers -- were headed toward a financial cliff that could have led to cuts for public safety forces.
Now, consider where we are today.
Those two pension funds -- again, each were only about 5% funded in 2002 -- are now fully funded. The fire pension has more than $83 million in assets, while the police fund has nearly $58 million. The city also has another $5.7 million sitting in a bond contingency reserve fund.
That didn't happen because of luck, or due to some unexpected windfall. It happened because city leaders -- starting with then-Mayor Sparachane and Herron and continuing, administration by administration, over the ensuing 25 years -- recognized a looming financial disaster and found ways to keep chipping away at the problem. Wheeling used the tools available under state law to gradually improve the funding position of both pensions.
City officials also worked with former Delegate Erikka Storch, R-Ohio, and other lawmakers to draft and push legislation that eventually allowed Wheeling to sell $42.2 million in pension obligation bonds in 2020.
The timing worked out perfectly for the taxpayers.
Had Wheeling remained under the pension financing plan it used through 2012, Herron said taxpayers today would be spending more than $8 million annually for the police and fire pensions -- about 20% of the city's total general fund. When Wheeling switched to a new pension financing plan that it used through 2020, even though it saved money from the prior plan, the annual contribution to both funds had already reached $5 million annually.
Today, debt service on the pension bonds that led Wheeling to be able to fully fund its pensions is about $2.2 million annually. That's nearly $6 million less than what taxpayers could have been paying if city leaders had simply followed along with other municipalities and kicked the can down the road.
And that's the difference here. City leaders could have easily shied away from the problem. But that wasn't allowed to happen.
One person is due much of the credit for this change in the city's pension position -- Bob Herron.
When he arrived in Wheeling on Feb. 25, 2002, Herron sat out immediately to help Wheeling tackle issues such as this. And while other cities our size have struggled to keep effective top leadership, Herron has remained a constant here, working daily to improve Wheeling.
I will say this: Bob Herron is an extremely effective city manager. That doesn't mean Wheeling is without its problems or that city government gets everything right. And it surely doesn't mean that we won't continue to hold Herron's feet to the fire on important matters. But when you consider where other cities similar to Wheeling stand today -- both financially and from a leadership standpoint -- well, residents here should recognize just how fortunate they are. There's something to be said for steady, effective leadership that has helped a city confront its problems rather than simply waiting for someone else to deal with them.
At a broader scale, topics such as this also prove government is capable of tackling important issues. Wheeling's pension saga is an example of elected officials and administrators across multiple administrations sticking with a difficult problem whose payoff would not fully arrive until years later.
That's what good leadership looks like. That's what good stewardship of the taxpayer's dollars looks like.
Wouldn't it be nice if our appointed and elected leaders at the state and national level actually put issues important to the people first, instead of themselves?
John McCabe is editor of The Intelligencer and Wheeling News-Register. He can be reached at jmccabe@theintelligencer.net.