Flint gets another $50m to help the pension fund | Top stories

FLINT, Mich. (WJRT) – $220 million from the state contributed to Flint’s pension fund to help keep the fund afloat and prevent the city from running out of money.

ABC12 News first reported last Friday that $170 million has been set aside for the fund.

The state is now injecting an additional $50 million, bringing the total to $220 million. It will suffice to bring the pension fund to 60% capitalization.

These extra dollars will take even more pressure off the city’s budget; a budget that was on the verge of being destroyed according to Rob Widigan, the city’s chief financial officer. “It was close, much closer than I would like.

Widigan can breathe a little easier now, knowing that the town has been saved from bankruptcy. “If this package had not come to fruition, the next fiscal year would face a deficit of over $15 million.

$32 million of the city’s approximately $55 million operating budget is used to cover retiree and bequest costs. There are 1700 retirees and 500 active employees. This represents approximately one employee for every four retirees. The mounting costs had the budget on the verge of collapse. “Having a $40 million or $30 million payout that’s not sustainable,” Widigan said.

Although there are fewer employees contributing to the pension system, the city still has an obligation to honor the pensions of retirees.

“Hard-working employees and retirees, so that’s an expense or something that we can adjust.”

In next year’s budget, the state of Michigan earmarked an initial $170 million to inject money into the city’s struggling pension fund.

While that’s a significant amount, it still wouldn’t bring the fund up to the state-mandated funding of 60%. This week, the city reported that there was money allocated in the fine print.

It was another $50 million set aside. With additional funding totaling $220 million, the city’s pension fund would be 60% funded. This will reduce the City’s contribution to the fund by almost 40%.

Mayor Sheldon Neeley said next year’s pension payment will be around $19 million instead of the planned $40 million.

“It would allow us to provide more services to the residents of this great city,” he said.

Dolores W. Simon