By Nick Woodruff
STILLWATER, Okla. —
The city of Stillwater is not close to having a Detroit-like financial meltdown and has steady control of its financial situation.
City officials want residents to know it is far away from filing for bankruptcy like Detroit, said Marcy Lamb, Stillwater’s chief financial officer. Lamb said without committing fraud and someone getting past many watchdogs, it would be hard for the city to slide into desperate financial straits.
Cities in Oklahoma have someone watching their every move, Lamb said. Due to the Open Record’s Act, someone would have to manipulate the numbers and lie about the city’s financial situation before it became bankrupt. Lying and going unseen for a long time would be hard to do, she said.
Lamb said one thing Detroit got wrong was pension plans. She said when Detroit had to borrow money to pay pensions, it should have raised a red flag.
“Detroit was on a define benefit program,” Lamb said. “Even though it is made to work, it’s hard to adjust for many different factors and when Detroit borrowed to become whole again, someone should have realized they were in trouble.”
Stillwater uses a different retirement program, called a define contribution plan. The city requires employees to contribute 6 percent to a pool. The Oklahoma Municipal Retirement Fund administers the pool. Lamb is part of the OMRF board and said it is a responsible board when it comes to managing money.
If the city was to hire someone to operate and take responsibility for the city’s retirement program, it would be too expensive, Lamb said.
Lamb said the city is not responsible for paying its employees the same amount every month until someone dies. She said employees are shown what they have from the fund and what they contributed additionally, and the employees are responsible for managing the money they have accumulated when they retire, not the city.
Even though Lamb said the retirement funding won’t get Stillwater in trouble, she also said Stillwater’s debt is in good standing, too. She said in Oklahoma, if a municipal entity wants to take on debt, it must show how it plans to pay it back.
There is an Oklahoma statute that limits cities from borrowing without a plan to pay it back. Detroit took on debt to cover operating expenses, and Lamb said Oklahoma wouldn’t allow a municipal entity to take on debt to cover operations.
“They (Detroit) take out debts and they don’t have revenue to pay them back,” Lamb said. “It’s like they must have not been looking at things realistically.”
Lamb said Stillwater has one thing going for it that Detroit didn’t. Diversity keeps Stillwater healthy financially, she said.
Detroit is known for the automobile industry and when car-makers started incorporating machines and laying off people, it started to lose population.
“They lost their main employee,” Lamb said. “Hundreds of thousands of people just got up and left. That has a huge impact on any city.
“Stillwater is diverse and doesn’t depend on one employer. I just don’t see Stillwater having a scenario like that one.”
A big reason Stillwater has nothing to worry about, Lamb said, is that residents are smart when choosing leaders. She said throughout the years, she has worked with great city officials.
She said who the people elect is important and the city of Stillwater and its residents have done a good job electing city officials.
“Stillwater is citizens helping citizens,” Lamb said. “I’m a citizen and the other elected people are citizens. All the citizens in Stillwater are willing to help each other out and this plays a huge role in financial stability.”