For Michael Hancock, the first defining moment for his administration occurs next week — a month before his inauguration as Denver’s new mayor.
Hancock must decide which faction on the City Council to support in reforming the city’s pension system. He not only holds the swing vote, he wields newfound clout that comes with his mayor-elect status.
Will he use it to forge the seven-member majority needed to pass a reform ordinance? Or will he let the present deadlock linger until the next council is sworn in — a council that is likely to be even less willing to agree to the list of sensible changes to the Denver Employees Retirement Plan that both former Mayor John Hickenlooper and Mayor Bill Vidal recommended?
Those recommendations include raising the minimum retirement age for future hires to 60, requiring 25 years of service to qualify at that age instead of 20, and boosting the vesting period from five to seven years.
Five council members support the package and five have reservations, especially concerning length of service and vesting.
Since the council is two members short (one died and another resigned effective June 1), Hancock’s vote alone cannot produce a majority. But at the very least it will provide the first signals of his seriousness in tackling the long-term structural budget gap and to what extent he is willing to resist pressure from the labor lobby.
If he can actually break the logjam and produce seven votes for one side, it will say something about his leadership, too.
It’s fairly encouraging that council members are mostly willing (or resigned) to raising the retirement age from 55. Not that 60 is exactly cracking the whip given the much higher private-sector retirement age and what even some public leaders are demanding elsewhere. Just this week, New York Gov. Andrew Cuomo — a Democrat, it’s worth noting — proposed hiking the retirement age for that state’s workers to 65.
But the other changes are important too given the city’s long-term budget trouble and the fact that the pension system — which is well-managed, I want to emphasize, in contrast to some public pensions — turned to taxpayers for additional revenue in both 2010 and 2011, and is likely to do so again. And while the reform’s savings would be relatively modest at first (as is the case with many economies the city should consider), they will grow over time as the workforce turns over.
For that matter, the package is simply the fair thing to do for taxpayers and workers. A 25-year service threshold is not only reasonable, it’s less than what Denver itself had in place as recently as the mid-1980s.
That’s one reason it’s hard to take too seriously critics such as Denver auditor Dennis Gallagher, who claimed in a letter to Mayor Vidal that he was “concerned that a less desirable pension plan for new hires will make our recruiting even more difficult and that will undoubtedly be the case for every other city agency.” Rest easy, auditor. Retiring at 60 after 25 years is still a very attractive work benefit, as the polling of almost any random gathering of sexagenarians would readily confirm.
Gallagher (and some council members) also is pushing for a requirement “for employee representation or retiree representation on the Plan’s board. . . . In the spirit of Thomas Jefferson and the foundations of our democracy: No taxation without representation!” He may have a point, but it’s mostly symbolic. Councilwoman Jeanne Robb tells me that the pension board in practice always includes a retiree and employee, and that this is the case now.
Unlike some newly elected city officials, Hancock doesn’t owe organized labor for his success. In fact, two unions helped fund mailers that leveled crude attacks against him. But so far as the public is concerned, his attitude toward tackling the city’s structural budget gap is almost a total mystery. Although possibly not for long.
E-mail Vincent Carroll at vcarroll@denverpost.com. Read his blog at .
