The Atlanta Journal-Constitution reports that the city is
expected to spend more than $100 million — about one-fifth of its general fund
budget — on pensions in the fiscal year that ends June 30. By comparison, in
2002, Atlanta spent just $36 million on pensions. Reed described the costly
pension system as “the toughest challenge the city faces right now,”
according to the news report.
The nine- to 11-member panel will be led by John C.
Mellott, the former publisher of the Atlanta Journal-Constitution. Mellott, who
retired from the newspaper early this year, is a certified public accountant
who held several senior financial roles within Cox Enterprises, the company
that owns the newspaper.
Reed said he hopes to announce the members of the entire
panel shortly after Christmas, and that he is working through whether members
of the city’s unions and employee organizations will serve on the panel.
The newspaper said Reed pinned much of the blame for the
rising pension costs on the City Council, which approved changes to the pension
system in 2001 and 2005 to help Atlanta catch up after years of underfunding
its pension plans. During his campaign he said he would consider changing the
time employees could become vested from 10 years to 15, and look into
whether the city could enter Social Security to reduce pension costs.
In June, the City Council approved changes proposed by
outgoing Mayor Shirley Franklin that reduced how much the city spent on
pensions this budget year by about $15 million. Franklin was one of several big
city mayors who last year called on the U.S. Treasury to use some federal
bailout money to help local governments with pension costs (see Mayors to U.S. Treasury: We Need Pension Help from Bailout).
Also during the financial crisis, Atlanta officials asked state legislators’ permission to diversify pension fund holdings (see Atlanta Seeks Pension Diversification OK).