QUINCY — A city councilor is accusing a colleague and the mayor’s administration of “unscrupulous” politics surrounding the council’s decision to approve a $475 million, 30-year bond to pay down the city’s pension obligation.
“I wouldn’t exactly call it dirty politics, but I would call it creative. It just looks wrong on every level,” Councilor-At-Large Anne Mahoney said.
Councilors Monday night approved borrowing the money by a vote of 6 to 3 — exactly how many votes were needed for the measure to pass. At a meeting of the finance committee earlier this week, the vote on the measure was 5 to 3. Councilor Chuck Phelan did not participate in the discussion out of worry over a conflict of interest, and thus became the deciding vote Monday night.
“I am actually a retiree, so I did what I was supposed to do, I went to the law office and asked if I could vote on it per the Mass. ethics law,” Phelan told a Patriot Ledger reporter Monday. “I listened to the whole process right through, but did not participate.”
The city solicitor’s office ultimately told Phelan last Friday that his pension would in no way be effected by the vote and that he could participate, he said. Phelan recently retired as the city’s IT director.
Mahoney said it was “suspicious” for Phelan to go on the record as not being able to vote, then “magically” get approval and cast the deciding vote. She asked when Phelan first reached out to the state ethics commission through the city solicitor’s office. He said in May.
“I’m in shock,” Mahoney said. “The real disappointment that I have in our city and in the way they work is that they will change the rules when they don’t get what they want. This person (Phelan) had no participation in anything, then at the last minute came in with a hail-Mary. … He came out of the woodwork to save this administration, the administration he used to work for.”
Chris Walker, chief of staff to Mayor Thomas Koch, said nothing nefarious occurred.
“He asked for an opinion, he watched the deliberations, he got his opinion and he voted ‘yes.’ I can’t imagine being that dead set against saving literally tens of millions of taxpayer dollars, that I would go to such lengths as to concoct malicious motives,” he said. “Councilor Phelan’s participation was reviewed by the solicitor, outside council and the state ethic’s commission. There was no issue. … By extending that logic, Ms. Mahoney should not have been voting on this because she is also entitled to a pension.”
Phelan said he voted “yes” because he wanted to stabilize and lower the pension payments made by the city each year.
“If we don’t do anything, it’s going to erode the budget,” he said at the meeting. “I think it comes down to a simple question: Do you want to pay 7 percent interest or 2 percent?”
Koch asked the city council to approve the bond request for $475 million to fully fund the city’s pension plan, which is currently an outstanding liability. Koch says the bond would save the city tens of millions of dollars every year and make pension fund payments a predictable, steady expense.
Gov. Charlie Baker has told all cities and towns in the state they must fully fund their outstanding pension liabilities by the year 2037. The current plan to pay it off would make payments for the pension system the largest single non-education budget item by 2037 — somewhere in the realm of $65 million that year, Eric Mason, the city’s chief financial officer, has said.
The mayor’s proposal would exchange the current system of paying down Quincy’s pension liability – in which the city’s retirement board essentially sends a bill at the start of each budget season – for a bond financing plan that would fund the pension system all at once.
Instead of the annual budget appropriation, which increases every year and is susceptible to market swings based on the investment performance of pension funds, the city would fund the entire system and pay back the debt on a set schedule with a set interest rate.
Councilors at a meeting of the finance committee last week made several amendments to the mayor’s request, including language to investment the money in Mass. PRIM, an investment service for public entities.
The committee ultimately approved the appropriation with those two amendments out of committee by a 5 to 3 vote. Phelan abstained.
When the bond came up for a vote at the full council Monday, Walker said the city’s bond counsel was “worried” about the language that restricted the borrowing to a 20-year bond. Before the final vote, councilors agreed to adjust the language back to say it would be paid back in a time “not to exceed 30 years.”
“They changed the game. Something came out of committee as one thing, then left council as another,” Mahoney said. “Every part of that meeting was odd, and there is something wrong with it.”
Mahoney, Council President Nina Liang and Councilor Ian Cain voted against the appropriation.
The mayor’s proposed FY22 budget relied on the passage of the bond, and several regular budget hearings were postponed as councilors debated. The finance committee will meet to discuss the proposed FY22 budget at 5:30 p.m. Wednesday and Thursday.
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Reach Mary Whitfill at firstname.lastname@example.org.