The reality is most citizens are woefully uninformed about what's going on at City Hall until something blows up. The politicians just want to get re-elected and they spend all of their time and energy doing magic shows to keep the uninformed appeased and in the dark. The news media knows that most people don't want to be informed as much as they want to be entertained, so they only publish/broadcast stories that show things going wrong (because bad news gets watched/read). And even then they almost always go after low hanging fruit.
When politicians start over promising services they run up against the reality that there is not enough money in the treasury to cover the bills. Administrators get pressured to produce more income or reduce spending. (God forbid they tell the citizens the truth and cut services or increase taxes, because either of those two are a sure fire way to get un-elected.)
The bottom line is that common sense is completely absent in the decisions that are made. Everybody is talking out of both sides of their mouth and doing the opposite of what they say they are trying to do. And when money is involved - logic leaves the building.
So you wind up with city services that are often just a sham that is either operating understaffed and underfunded, or is a glitzy cover up that is over funded and overstaffed in order to distract you from the stuff that isn't working very well. If something blows up and the media notices, they just shift funding and manpower until it looks good again.
I've seen entire functioning divisions created to address a problem, disbanded or reduced to transfer people and assets to someplace where there is another problem, and then brought back to bigger than ever five years later because the old problem was out of control again. It's psychotic crisis management. Not only are millions of dollars wasted, but the citizens are the ones who also pay the price in screwed up service. Sometimes they pay with their property, and sometimes they pay with their lives. But meanwhile, the politicians who created the mess keep getting reelected because they haven't raised taxes and they keep pulling off the magic show.
And the current pension crisis is just more of the same.
To the taxpayers and voters they said "Hey, we can keep services at their current superior levels without raising taxes. Pleeease reelect me", and to the employees they said "Pleeeease stay, we can't replace you. We'll give you a mediocre raise but we'll make your retirement golden if you'll just stay a few more years."
Who is to blame? Well, I would go to sleep with a big smile tonight if we all agreed that first thing tomorrow we were going to string up all the politicians. But who bought the pig in a poke? Was it the employee who entered into a contractual agreement that stipulated everything in black and white, or the voters who kept reelecting people who sold them BS by the ton?