Order to pay firefighter's pension $17.5 million the latest blow to city finances

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wwltv.com

Posted on April 9, 2013 at 5:40 PM

Updated Tuesday, Apr 9 at 5:41 PM

Katie Moore / Eyewitness News

NEW ORLEANS -- Mayor Mitch Landrieu said Monday he will appeal a judge's ruling that the city has to pay $17.5 million toward the firefighters' pension fund.

However, if that appeal is unsuccessful, both the mayor and experts say it would be difficult for the city to handle financially.

“It's just another major financial hurdle that the city's gonna have to deal with,” Landrieu said Tuesday.

A Civil Court judge ordered the city to pay $17.5 million to the firefighters' pension fund, something Landrieu said could put the city on shaky financial ground.

“This is just the smallest piece of that judgment. There's another one that's out there that's about $150 million,” he said.

The Bureau of Governmental Research conducted an extensive study of pensions and their affect on local governments last year, including the New Orleans Fire Department Pension system.

“This is not a one-time obligation. To get that fund fully funded, it's going to be a huge outlay year after year after year,” said BGR CEO Janet Howard.

New Orleans Firefighters Association President Nick Felton says while the union members are pleased with the decision, they hope it will jump start negotiations with the city that he says broke down last summer.

“We're willing to get to the table and work out a resolution to this that is gonna be in the best interests of the citizens and the firefighters,” Felton said.

When asked about whether negotiations broke down, Landrieu said, “The firefighters' negotiations with every mayor for the past 20 years have been broken down because it is a gargantuan amount of money laid on top of a system that just does not work.”

The judge's order comes as the city is facing two other looming court orders from the feds: the consent decrees for the NOPD and the Orleans Parish Prison.

If required to pay all three, the city could take about a $40 million hit.

“That's a very, very significant problem,” Howard said.

Landrieu was asked if the city had a plan if all three of the judgments come due at once.

“There is no plan b," he said. "I've said when I was running for office and I say whenever I talk about this, we have a broken system.”

Even so, Felton says the city still owes the pension compensation after fighting it for decades.

“Reasonable people can come up with solutions,” he said, referring to the possibility of a renewed negotiation with the city.

Two bills are currently pending before the state legislature in Baton Rouge to change what the city calls some of the problems with how the firefighters' pensions are handled.

 

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