Herb Bergson is a progressive who's championed the rights of minorities and vowed to end homelessness in Duluth. But he also promised to try to plug the gap between the projected costs of retiree health care and what's been set aside to pay for it.
Twenty-five years ago, the city faced a financial crunch. City officials asked workers to forego a wage increase, in favor of health benefits when they retired.
Since then, the city has basically offered health insurance for life to all city employees. No one knew the cost of health care was going to go through the roof. Now, the city's long-term liability for that care amounts to something close to $300-million.
A task force studied the issue and recommended 14 actions last December. Bergson's critics say he hasn't followed through. Bergson says others are to blame.
Bergson negotiated concessions from the union representing supervisors. He says the city council made a big mistake by rejecting it.
"Whether it was the pressure of one union to block it, or it was certain city councilors who didn't want to see credit to the administration, the fact remains it wasn't accepted," Bergson says. "And we shouldn't be punishing the citizens of Duluth for politics. This problem is bad and it's got to be fixed."
That concessionary contract was controversial, both among the supervisors and among other city workers. Alan Netland is president of AFSCME Local 66, which represents 500 city employees. He says the union vote on the contract was conducted unfairly.
"There was no secret ballot on that vote, and it was done as kind of an end-run on all the rest of the unions," Netland says.
Netland says the unions have been suggesting cost-saving measures, but Bergson's administration has been ignoring them.
Bergson also lashed out at the state legislature. The state senate failed to approve a measure that would allow the city to set up a trust fund to earn higher interest rates to help pay the bills.
"It was more about who would get credit than who would fix it," he says. "Why else would they care? It was only for Duluth. The language said this was selectively for Duluth and it didn't cost the state a nickel. Why wouldn't they support that?"
And Bergson criticizes State Auditor Pat Anderson, who's been sounding off on the city's problem. She's won headlines for warning that the city could face bankruptcy if it doesn't act quickly. Anderson says the city needs to think about selling off some of its assets.
“It has utilities, and other assets. There needs to be at least a discussion about whether some of those assets should be sold off to pay part of this liability.”State Auditor Pat Auditor
"It has utilities, and other assets," she says. "There needs to be at least a discussion about whether some of those assets should be sold off to pay part of this liability."
Anderson acknowledges other cities may face the same problem. Until now, it's been easy for governments to ignore the matter. But starting next year, federal law requires them to show the liability in the books, although it doesn't require money to be set aside immediately.
Anderson says Duluth is the only city she knows of that has such a generous retiree package. But many cities are just starting to study their own situations.
One of Bergson's toughest critics is city councilor Jim Stauber. He says Bergson's decision not to run again provides an opportunity to make progress.
"At least when he comes to council with any proposal or leadership in resolving this, we'll know he's not looking at 'how can I appease certain political unit that's going to be endorsing me for my second run,'" Stauber says. "We know that it'll be coming from purely a best wishes for the city of Duluth standpoint."
But Stauber doesn't promise as much for his fellow council members. He says councilors are always getting pressure from interest groups.
"Often I know councilors struggle with that when they get pressure from things they don't believe is right. I'm not up for re-election, which makes it easier for me to avoid those and do what's best," he says. "Hopefully those councilors that'll be up for election next year will stick to their guns and say 'what is best for the city of Duluth' and not 'what's best for me politically.'"
The task force that made the 14 recommendations will report on how well -- or how badly -- they're being implemented, at the end of this month.