Wait for it, seven o six fifty five KERCID Talk Station, A very Happy Tuesday special. Tuesday, We've got Tim Rivers American Ghula Chronicles. We've had him on the program a couple of times. He'll be on at seven point forty now that Hunter Biden has been pardoned, because of course they were all just picking on him and had nothing to do with his criminal reality. How about the January
sixth prisoners, what's in store for them? We got the inside scoop with bright Bart News political reporter Wendell Huza bow Is going to join us in an hour talk about guess Hunter Biden, and then Daniel Davis deep dive on Russia, Belarus, Georgia, and then my friends at OHC the Cancer Special. It's going to be talking about the blood cancers that'll happen at the end of the next hour. In the meantime, welcome back. Always a real distinct pleasure
to have Men's Studio. Todd Zenz a recently pending op ed piece which appeared in the paper version of the cincinn Inquirer. He is a West Prices so Resident retired Inspector General the United States Department of Commerce. After thirty one years of conducting audits and investigations of federal officials, programs and operations. He remains a certified fraud examiner and
he knows things financial clearly. Todd Zenz Are welcome back to the fifty five KRC Morning Show, tackling the problem of well City of Cincinnati finances, most notably the still ongoing and yet to ever be resolved pension problem. Welcome back, my friend. I love having you in studio. Thank you, Brian, good morning, and I certainly appreciate you taking the laboring or and staying up on what is really a very
very challenging financial situation. You and I can talk all day long about the problems facing the City of Cincinnati. I mean we were talking off air, most notably about the backlog of just simple fundamental basic things like road repairs that mc up and get closer to it a little bit. It's just a simple core service, something that acts as a financial draw because people are inclined to want to move into cities with good infrastructure. You let
your roads deteriorate over deckage. You went up with a four hundred million dollar backlog. They're supposed to do X number of millions of dollars of road repairs each year, and every year they kick the damn can down the road. Well, welcome to the pension program.
That's exactly right, Brian. They're doing the same thing. They're kicking the can down the road. And even when they get surplus money like they did this year sixty five million dollars, instead of applying that to the pension liability, which is an eight hundred million dollars shortfall eight hundred million, they decide to put four million of that sixty five million towards the pension liability and they spend the rest.
I think there's about five hundred thousand dollars left of that sixty five million that they haven't applied yet.
And where does that money go off to. It's a random decision by the mayor that hey, I'm going to spend it over here. And I mean, this isn't the power of the purse resting in the hands of Congress type situation. With that money, it's like we've got a dictator who can just decide on his own terms where the money's going to be spent.
Well, the way it was reported is that they broke they broke it down into three different buckets. The mayor got to recommend spending, the city council got to recommend spending, and the city manager got to recommend spending. But I must say that the money that the city manager spent all went towards not all, but most went towards public safety. The other things were all what we call pet projects.
The mayor wanted to spend three hundred thousand dollars renovating City Hall and you know things like that.
Real important stuff, very important, like the Bengals getting new locker rooms for the players. It in yours to everyone's benefit when that kind of thing happens, doesn't it. That's right, great, great expenditure, taxpayer dollars, they're per ball. So in order to tackle this challenge, which, as you point out in your op ed piece, and I applaud you for it,
Cincinnat Council must attack pension liability more aggressively. The Cincinnati Futures Commission, now they remember when they rolled out the report all the things that the city needs to be doing or the things that they should be looking at by way of righting this ship. And weren't they the ones that said this was the most concerning threat facing the City of Cincinnati, or pension liability.
Yeah, that's right, if you read the report. Unfortunately, this was towards the back of the report. The report's very difficult to read in the first place. But they identified
three threats, they called them threats. The most concerning is the pension liability, And basically the issue is that eventually it's going to eat the general fund alive, that by the time we get down the road ten, fifteen, twenty years, the pension liability, if it's not fixed, is going to eat into the general fund to the point where we can't afford basic operations. In addition, they're going to be they're going to have to reduce benefits even more than they have already.
Well, it can a parallel be drawn to our national debt of thirty seven trillion dollars, because more and more of that goes to debt service, eating into the rest of the revenue that's supposed to fund things like Social Security, Medicare, Medicaid, et cetera.
Right, Well, we already borrow money to the point where we spend one hundred and forty million dollars a year servicing our debt on our bonds. So this debt is even beyond that. This eight hundred million dollars is even beyond that, and they're they're just contributing pennies to the thing every year compared to what is required to make it solvent.
Pennies directed at the most concerning threat facing the city.
Yeah, there's definitely a disconnected futures Commission. Their solution, the only solution they came up with was to take the pension fund and get it to a point. Right now, it's sixty eight percent funded. They want to get it up to eighty percent funded. And if they feel if they do that, they can negotiate with the Ohio Retirement System Public Employee Retirement System opers OPERS and therefore offload
the pension fund to the state. Now, it's very complicated, very controversial, because you don't you don't know how the two plans compare at this point. But that's their only solution. And in order to do that, they want to raise four hundred million dollars three hundred and ninety million dollars to bring that pension fund up to eighty percent funded and well, and had that been.
Paying into the pension fund on an appropriate level in the previous couple of decades, we wouldn't have this challenge to start with, and we wouldn't have to worry about unloading it on the rest of the Ohio tax payers.
Right What's interesting is that right now the pension system is governed by a federal lawsuit settlement called the Collaborative Settlement Agreement from twenty fifteen, where the city agreed to bring the pension system to full funding one hundred percent funding by twenty forty five. They gave them thirty years to get there, and we already know, Brian, that they're not going to make it. They're not going to come anywhere close.
It's a pre existing function of government. It's like, you know, you got X number of things that you gotta pay for every year and that pension is one of them. Just ignore the hell out of it. And then they have to go to federal court and enter into a settlement agreement that gives them an additional thirty plus years to get to write this ship. And yet they haven't lifted a finger in an effort to even comply with that. Yeah, they're not going to make it, and so are we
governed by idiots? Is that what this comes down to, are they all just financial illiterates, or if I was under that pension pro I would be screaming bloody murder about this. What I mean, those who have to rely on this pension system. Where are they? Where's the revolt? Yeah?
Might Well, that's where this collaborative settlement agreement came from twelve years ago, is that people got so upset like the ASSME union's individual retirement retirees. So that's where the collaborative settlement agreement came from in the first place. And based on the agreement, it looks like the people could come at them again for not complying or not living up to their agreement. They could probably reopen the thing. I would like to think so, so we'll see what happens.
It's like, I don't know what the terms of conditions of the collaborative agreement are, but if you've been given X number of years, it seems to me there are probably certain benchmarks that you must accomplish along the way, because you can't just wait till the thirtieth year and then say, well, oh, that's right, we should have been painted to this pension thing because we were obligated to do it thirty five years yars ago or whatever.
Yeah, the agreement doesn't really specify specific amounts that need to be.
Well, there is a failure in terms of entering into the agreement.
Yeah, but it does. It does allow certain things to reopen negotiations or reopen the settlement agreement, you know that the judge can approve. And this failure to be on track for one hundred percent by twenty forty five, I think falls into that category.
I would make that argument. It seems like a winner. I'm not going to call it a no brainer, given the complexity of the situation.
But I think the reason that this happens is I don't know that their financial illiterates. I think that's probably part of it. But I think they just spend money on their constituents. They spend all these these things on their constituents.
But aren't the pensioners their constituents.
Yeah, but that's a that's a smaller number, I think.
But screw them, they're retired, basically, isn't that the attitude?
Well, let's just look at the last few weeks.
All right, let's pause on that note. We have a nice foray or entry to start off hitting the ground running. When we bring back, Todd Zenzer again check out the op ed piece, since any council must attack pension liability more aggressively. Actually, I think I would have been a little more aggressive in the wording of the op ed piece, Todd, stick around you right back after I mentioned plump tye plumbing. It's always plumbing done right confidently. Call my friends at
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It is nine first one to Wether forecasts partly cloudy started that day, it'll be mostly sunny later. I have thirty four over night down to twenty three of a few clowns Tomorrow for listener lunch, mostly clotty. It'll be windy, but I high have forty two wintery snow mixed kind of thing going on over night down to twenty degrees. And on Thursday it's going to be a sunny day with a high of twenty seven twenty one degrees. Right now traffic time. Chuck from the UC Traffic Center.
You see how weight Ball Center offers comprehensive obesity care and advanced sergeic co expertise called five one three, nine three, nine two two sixty three. That's nine three, nine twenty two sixty three. Crews continue to work with a couple of wrecks set bound seventy five at Hoppel and the Western Hills Viaduct. Traffic backs to seventy four. King is shut down between Reading and Burnet due to a wreck at Harvey Chuck Ingram on fifty five krs the talk station.
Seven twenty and Happy Tuesday to you. Brian Thomas in studio with Todd Zenzer. He knows his stuff when it comes to audits and things financial of us A Department of Commerce. Thirty one years as the Inspector General, he still remains a certified fraud examiner, And basically it sounds to me like what we're dealing with is a bunch of financial fraud or at least massive in competence on
the part of the City of Cincinnati. Pension liability outstanding total in the whole six hundred and eighty million dollars, right, something like that.
Actually, the pension liability is up over eight hundred million.
Oh oh, here, I am misplacing a couple one hundred million dollars. But that's what the City of Cincinnati does. You're getting ready to walk in through some extraditional points on this. We took a break, Todd, So let's talk about it because you and I were engaging in this
discussion on the break. And in spite of the fact that the pension is just woefully underfunded and it is under the subject matter of a federal settlement agreement, that's right, and we're not compliance, apparently they still ignore it.
Well, they are ignoring it. That's that's the issue. They're continuing to kick kick the problem down the road. You know, they just spent sixty five million dollars of the surplus. So but over the last three weeks they've come in for a proposal of three hundred and twenty five thousand
dollars for a program a base in California. It's probably got probably got a handful of cities that are participating for to try to attack youth violence, youth gun violence and the idea is to actually pay certain youth to.
Not commit run to behave that's right.
So that's three three, that's three hundred and twenty five thousand dollars.
It's just an insane societal regression.
And then we've got half a million dollars that the city council wants to spend on mental health, a mental health program for transgender youth. They've got, uh there was the Vice mayor was on the radio just the other day about historic preservation of North Avondale and she's suggesting that the city council can pay for stained glass windows for homes in North Assondale. I mean, it's it's you're making this up. I'm not making that up. No, I
heard it myself. So the idea is that there's a lot of things to spend money on.
That silence was me just in a state of absolute disbelief. I apologize.
There's a lot of worthwhile things to spend money on. It's never ending. But the point is that dispension liability is a threat to the city and they're not doing anything about it.
Well, and you just mentioned I'm not having to go with transgender youth and their mental challenges. I can certainly acknowledge that they probably do. But I just got done going through the Congressional the summary of the COVID nineteen Select Subcommittee Report, and it talked about one of the consequences of the lockdowns and the lack of education was a fifty one percent increase in girls twelve to seventeen
committing suicide. Wow. Yeah, you know, that is a broad much broader than the challenges of the transgender youth, which don't make up a sizable chunk of the population. That challenge in and of itself alone sounds like a more justifiable thing to try to take a stab at.
But you know, this is the city of Cincinnati. How what are they supposed to What do they think they could possibly do? Yeah, like four million dollars a year to the Green Cincinnati Plan. It's like, is that really? Is that really gonna do anything for the environment?
Absolutely not, absolutely not, But they keep spending. They just dedicated what is it, five hundred thousand dollars for a green bank.
And that's the hell's a green bank.
The green bank is another kind of quasi agency that the city's going to set up in order to be a clearing house for money devoted to climate change.
Okay, and everyone who might think that's a great idea. Again to the Wall Street Journal Bjorn Lombourg's op ed piece, climate change colonialism keeps poor countries impoverished. And his point is a brilliant one. You know, if you even want to look at the weather related deaths that have gone on, even if you want to draw a parallel between climate change and weather. Extreme weather took an average of nine
thousand lives each year over the past decade globally. Yet they are spending literally billions of billions of dollars in programs that do absolutely nothing for the impoverished countries that they claim their saving through their green projects. This is a global level talks here. Now we're moving down to the Cincinnati City area level, as if what our carbon emissions are collectively in the city have anything to do with anything.
That's right.
I agree with you, Brian toddszens aer hold On. We're going to continue this conversation one more segment. First, the word for my great friends at Fast and pro Roofing outstanding folks. They are. They cannot be beaten in terms of the beautiful work that they do. Fast and Pro Roofing known for the excellence and quality of their work. It is truly superior. But before the work comes the free roof inspection. And that's where you got to worry. If you're working with some of the roofing company, I
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Your Channel nine first warning weather forecast. Partly cloudie started to day with most to send us guys at some point later thirty four for the high, end of twenty three overnight with a few clouds, windy and cloudy tomorrow for listener lunch raycial chili forty two degrees mix the snow and uh kind of wintery mix overnight twenty for the low, and then on Thursday we're going to see a high of twenty seven with sunny skies. Right now it's twenty one degrees.
In type of traffic from the Ucum Tramping Center, you see health Weight Ball Center offers comprehensive obesity care and advanced surgical expertise called five one three nine three nine two two sixty three. That's nine three nine two two six three step found seventy five slows out of Lachland, then very heavy from seventy four to two accidents. One at Hoppel, one at the Western It is via the King is blocked up between Ready and Burnett due to a wreck. Chuck Ingram on fifty five KRC the talk
station seven thirty fifty five KRC DE talk station. We can talk to him for hours. Todd's Enzer former Inspector Jenner of the Oast Department of Commerce. You know, is what he's talking about when it comes to fraud examinations. He also knows what he's talking about when it comes to budge. It comes to allocating and properly budgeting. The City of Cincinnati well, as revealed this morning in the brief amount of time we've been talking, has an epic
failure in this regard. The pension system is woefully underfunded. And I want to go back just briefly tied to the idea the since Any Futures Commission put out, which again the Sinceinni Futures Commission said, this is the biggest gravest threat the city is facing, this pension liability. In an effort to deal with that, if they write the pension a little bit, they bring this hole down to four hundred million, then somehow opers would be willing to
take it over. Well, like, ohiopen and I'm as as an Ohio tax payer and I don't live in the city of Cincinnati. I'm like, this is the hole you dug yourself in. Don't put that liability on me. Why would operhs even agree to take it?
Yeah, well, I'm not really sure why they would take it, But I don't know that the Futures Commission was all that confident because they think that just getting to that amount would get them to the negotiating table. It's not that it would seal the deal or anything like that. That's just to get talks going with the pension, the state pension system.
But that would also bring them closer to compliance with the consent decree they entered into the federal government, which is supposed to be doing anyway.
That's right, So they should probably go ahead and try to reopen that agreement if they give themselves a little more time and be more aggressive about bringing that bringing that up.
But then we wouldn't be able to buy new steamed glass windows for the folks in Avondel.
Yeah. The other issue though, is this is regionalizing the waterworks and whether that is even a possibility.
How would that help because so far, as you've explained, and we've been over this before with the sale of the railroad, they're just selling literally everything is not nailed down to make to meet their obligations presently, right, And that goes with the pension because right now the pension's paying out more than it is taking in.
That's right. They've got four thousand people taking out or beneficiaries that are using the retirement system, and they've got three thousand people paying in. In addition, they the pension Board, which is an agency of the city, the pension Board has to sell its assets. It's reported to the city that it has to sell its assets in order to even pay benefits and expenses. So they're eating away their investment portfolio in order to actually pay their bills, and
so that reduces their investment income. And they right now, according to their financial report, uh, they're one of the highest pension systems in the country. I think who are using their investments to pay their bills, are eating into their investments to pay their bills.
Which obvious stating the obvious imperils their ability, I mean more rapidly each year because the city clearly is not replenishing what is being paid out. They haven't prioritized even maintaining some even a level of status quo. It sounds like right.
And even their projections that went into that collaborative agreement said that they were going to earn seven and a quarter percent on their investments. Well they were down below seven percent. They're not even hitting that target. So they've got a lot of issues. It's kind of a downward spiral, and nobody's really worried about it.
I guess all right, let us just paint a somewhat bleak scenario which looks like the trajectory we were on while the council people and the city manager and the mayor all fiddle. What happens when the pension runs out of money?
Well, I don't know that it's going to run out of money.
It's going to have to Well they're they're eating principle up as we talk, apparently, So I what is it? What is the future for the city? Sense? Any look like if this problem is not fixed.
Well, they're going to start reducing benefits fairly early, earlier than failure. And I don't really know the answer to that, Brian.
I think they're going to have to find some way to shore up the liability, to reduce the liability, and they're going to have to reopen their collaborative settlement agreement to give themselves more time to get there if they can, if they can, And I really think that the city just has to start putting money into that pension liability to ward off what we're talking about, instead of spending it on stupid things, on all these pet projects and
all this social welfare spend. And they've got to start prioritizing their spending. It's as simple as that. And yeah, I think it's a real problem for the for the people that have to rely on that pension system.
I clearly want to be there. I sure as hell wouldn't want to be there either. So anyhow, well, you've shed a huge bright spotlight on a problem that every one of the cities should be talking about, certainly those in elected capacity, and they should prioritize this as numero unum,
just like the Cincinnati Futures Commission did. Boy, they thought the sun shined out that since a few future Commission's bottom until you get to this particular component in their chapter in the in the report, uh, and you realize that, no, we are on a downward spiral that doesn't look like it's going to be fixed.
Their recommendation was for the mayor to appoint a task force to even look into this issue. He hasn't even done that.
Todd Zenzer, you're a brilliant man. I appreciate what you're doing on behalf of the citizens of the city of Cincinnati, whether they appreciate or not. Uh And hopefully more competent people will be elected to deal with the problem. Seventh thirty seven fifty five Kurcity Talks stations, stick around, tim rivers, American ghul Loog chronicles. We're gonna see if anything's gonna happen to the January sixth prisoners now that Hunter Biden
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