Springfield City Council will put more than $10 million received from a lawsuit with a mobile phone company into the Police and Fire Pension Fund.
Council voted Monday night to put the entire settlement from its back taxes lawsuit with AT&T Mobility - about $10.2 million - into the fund, which would take care of shortages in the city's actuarial recommended contributions from fiscal 2004 through fiscal 2007, including interest that would have accrued since then.
While City Manager Greg Burris said the contribution would not take care of the total shortfall in the pension plan - which will be about $190 million underfunded after this payment - he praised council for keeping its stated commitment to put the settlement money into the fund even though the proposed pension sales tax failed in February.
He also said council should be commended for not settling the lawsuit earlier for less money, despite pressure from both media and local legislators. Mayor Tom Carlson echoed those thoughts.
"I think it also underscores that council's decisions on how to deal with these difficult issues has been based in principle," Carlson said. "We told the big phone company they needed to pay the tax just like the little guys. Even though they can put 100 lobbyists on the floor, we stuck to the principle that they needed to pay the tax."
The settlement stems from a suit filed in U.S. District Court in 2004 against multiple phone companies; the city settled with Sprint Nextel in September 2007 for $1.54 million, while litigation continues with AT&T's landline company and Alltel.[[In-content Ad]]
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