Herbst: Stronger financials, stronger future
To the Editor:
When we took office four years ago, I knew that the town’s pension fund represented a clear and present danger to the taxpayers of Trumbull. Funded at only 27%, the financial rating agencies warned us that this could compromise Trumbull’s overall fiscal health.
I’m often asked by Trumbullites, how did we get to this point? In the 1990’s, when the economy was booming, decision makers at the time determined that funding the annual required contribution (ARC) was not a priority, delaying the inevitable. Each year, the Town’s unfunded liability grew. In the 2000’s, even when contributions were increased, those contributions could not keep up with the number of employees that were pension eligible and retiring. This problem was 25 years in the making and anyone who thinks it can be solved in four years is delusional.
I couldn’t help but shake my head in disbelief last week when I read former Board of Finance member Tom Tesoro’s critique of my administration’s handling of the Town’s pension fund. You would have never known from reading Mr. Tesoro’s letter that he consistently rubber stamped budgets that underfunded the Town’s pension plan. Mr. Tesoro knew the recommendations of our actuaries and chose to ignore them. Don’t take my word for it — go look at the budget votes and the actuarial reports. But true to form, last week Mr. Tesoro again confirmed his habit of claiming to have all the answers, but offering no solutions.
Short term we have taken corrective action to stop the bleeding:
1. A 92% increase in pension contributions in the operating budget;
2. Finally achieving the annual required contribution in the Town’s pension plan for the first time in a generation;
3. 9 labor agreements that now carry defined contribution plans for new hires, which will take new employees out of the traditional pension system and reduce the Town’s unfunded pension liability;
4. A diversified investment strategy that is seeking to grow the fund.
These collective actions are the reason why Standard and Poor’s upgraded Trumbull’s Bond Rating to a AA+ — one step away from the coveted Triple AAA. Long term, to make sure this problem never happens again, my administration has recommended and the Town Council has agreed to impanel a Charter Revision Commission to develop charter language which states that the Town must fund the annual required contribution every year. This is about math, not politics. We are going to honor our financial obligations and make sure that Trumbull’s creditworthiness is strong and growing stronger each day. A stronger financial outlook means a better Trumbull. It’s that simple and that big.
It’s time for my colleagues on the other side of the aisle to stop with their temper tantrums on the editorial page of the Trumbull Times every week. The people of Trumbull elected us to do a job and it’s time to get it done. To quote my late football coach, Jerry McDougall, it’s time to lead, follow or get out of the way.
Timothy M. Herbst