City officials last week discussed the “broke” City-funded pension program currently serving a small number of retired police officers and firefighters. Officials said they would do whatever it took to ensure those retirees maintained their pension until the program eventually dissolved.
“This fund is broke, meaning we ran out of funds to pay the pensioners,” said Angela Waninger, director of finance and support services. “The current administration will not let the pensioners down. So this fund is being funded by the general fund.”
According to Waninger, the current year-to-date transfer amount totaled $175,003, which had been moved from the general fund to the police and fire pension fund. For the current fiscal year — which runs from July 1, 2020 to June 30, 2021 — another $700,000 had been budgeted from the general fund to meet the pension needs for the year.
Waninger described the City-funded pension program as a “one-time transition” that allowed retired police officers and firefighters to switch from their state-funded CERS pension plan to the City’s local plan. About 80 retirees opted to make the switch and currently 35 remain on the plan, Waninger said.
More than $4.9 million represents the present value of all future payments to pensioners.
“It looks like a really large number, but we’re just biting this elephant one bite at a time, funding annually as we move forward,” Waninger said. “And that’s if there’s not COLA (Cost of Living Adjustment).
During the same meeting, officials approved presenting a 1.9% COLA to the City Commission that would add more than $12,000 to the City’s current pension balance.
“1.9% happens to be what the CPI (Consumer Price Index) was for the most recent full calendar year,” Waninger said. “At any rate, we just felt it was fair to go on and give all the members of this board the 1.9% to assist in their cost of living increases.”
Waninger said while the City wasn’t struggling to keep the pension fund afloat, the amount of money transferred from the general fund to the pension fund was “a good chunk of change.”
“It’s a cost, but it’s one that we foresaw would happen years before it did,” Waninger said. “We were able to plan for it. If you plan for it, you can usually manage it.”
Because the City-funded pension plan was a one-time option for a select number of retirees who chose it over the CERS, it and the expenses that come with it will eventually “peter out,” Waninger said.
