It's natural that City Council members would like more of the $5 billion municipal employees' retirement nest egg invested near home.
It's too bad that at the yearly pension budget hearing, they had to hear Board of Pensions and Retirement chief Fran Bielli remind them that Philadelphia would need an additional $6 billion to keep the plan from running out of money. Taxpayers would face a much larger bill than today's $600 million annual pension pay-in.
Not much room for experiments. But that doesn't stop Council members from questioning.
Asked Council President Darrell L. Clarke: Since they did poorly last year, can we pay private money managers less?
We just fired most of our hedge funds, cutting last year's $28 million fees nearly in half, Bielli said.
Asked Cherelle Parker and Derek Green: Is it time to hire more non-white-male money managers? Parker cited reports showing "emerging" investors at small firms tend to post bigger profits.
Yes, we have experts scouting them, said Bielli. "The board's first and foremost obligation is to hire good investment managers," he added.
Allan Domb asked: How much does the DROP early-retirement program really cost?
We don't quite know, said city Finance Manager Rob Dubow. The last estimate - a cumulative $230 million - is from 2010.
Helen Gym asked whether the city can dump stocks of companies that closed local plants (a long list). And, she asked, how much of the plan is invested locally?
About 12 percent, Bielli said.
Why not the other 88 percent? Gym asked.
Maybe local firms don't apply, said Bielli. Maybe they don't produce. "The bar is whether they are performing."
Bobby Henon asked whether the pension plan's fat deficit makes it a target for state takeover.
"We are still exempt," Dubow said, though stricter legislation is pending in Harrisburg.
The plan was last near solvency (assets 80 percent of liabilities) in 1999, after borrowing $1 billion in an expensive bond issue. It's now 45 percent.
"We can't earn our way out," Dubow told Council. Better returns would help. But the big cost is too many long-lived retirees for the money set aside.
What to do? The city is urging unions toward savings plans and limited pension guarantees. And funding: The sales tax is scheduled to help.
Plus, Domb says Council and the Kenney administration are open to:
Selling delinquent business tax and utility liens to professional collectors. Domb says that could raise $100 million, plus tens of millions yearly.
Updating real estate appraisals annually. New appraisers would more than pay for themselves.
Taxing underappraised land beneath Center City's tax-abated new-construction projects. Domb ballparks that benefit at $15 million a year.
Boosting court and sheriff's fees, which Domb said are frozen at 1980s levels. "We could make the courts self-funding," freeing $50 million a year.
I reminded him Councilman David Oh and others tried to sell similar schemes. This time, Domb insists, "we're getting 110 percent cooperation."