Category: City of Birmingham

Woodfin to present city budget with changes in funding for pensions, infrastructure, transit

Mayor Randall Woodfin will present his proposed FY 2019 operating budget to the Birmingham City Council during its regular meeting Tuesday morning. Though Woodfin had provided some input on the FY 2018 budget, which was passed last December after months of delays, this will be the first budget that his administration has overseen from the ground up.

Due to the city’s new “zero-based” budgeting strategy, the proposed budget will be built on the Woodfin administration’s assessment of the city’s budgetary needs rather than the previous year’s budget. Among other things, the proposed budget will feature changes to the city’s funding for pensions, infrastructure, and transit.
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A Hole in the Balance Sheet: Birmingham’s Impending Pension Crisis

Birmingham Mayor Randall Woodfin’s transition report, “The Woodfin Way,” features assessments of most major issues facing the city’s nascent administration. But during the March 15 presentation of those findings, one issue in particular drew murmurs of alarm from the crowd: the Transparent and Efficient Government Committee’s finding that the city has been underfunding its city employee pension plan for more than 15 years, leaving a pension liability of $750 million.

“On the surface, the (city’s) finances don’t seem so bad,” said the committee’s co-chair, Daniel Coleman, during the presentation. “We’re close to a balanced budget, we’ve had small deficits, but we’re able to cover those. But if you look back at the next level, we’re creating new deficits, big deficits that won’t go away — holes in our balance sheet.”

The nature of the presentation meant that Coleman was unable to address the pension liability issue with any real depth, drawing cries of frustration from the audience, a large portion of which consisted of city employees.

“You want to break that down?” yelled an audience member at the end of Coleman’s presentation. But by that point, Woodfin was moving on to the findings of the next transition committee, leaving open the question of just how dire the pension issue is and what can be done to fix it.
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