City Beat: Police, Fire hires could move to state retirement system

Springfield City Council is putting the pieces in place to shore up the Police and Fire pension if residents approve a proposed sales tax increase.

At its Jan. 26 meeting, council heard first reading on a proposal to move recent and new hires in the Police and Fire departments to the state retirement system.

The proposal would move all Tier II employees - those hired to the Police or Fire departments after June 1, 2006 - along with any new hires to the Missouri Local Government Employees Retirement System, or LAGERS.

Since the city cannot legally make changes to already-promised benefits for the Police and Fire employees, the plan would require Tier II employees to voluntarily terminate employment with the city, so they can be reinstated and moved to LAGERS.

The proposal comes at the recommendation of the city's Police and Fire Pension Task Force, which comprises representatives from the city manager's office, human resources and finance departments, the Pension Board, and the leadership of the Police and Fire unions.

City Manager Greg Burris said the proposal would move forward only if the 1-cent sales tax to fund the city's pension passes in the Feb. 3 election. That tax would take care of employees already in the pension plan, which would then be closed to new hires.

Burris also said that if the Tier II employees and new hires are moved to LAGERS without the new sales tax, the city's immediate financial obligations would increase.

"Our actuary tells us that if we close the plan and don't have the sales tax, next year's $13 million contribution jumps up to $17 million," Burris told council. "We just can't afford to close the plan without the sales tax revenue coming in."

Councilman Dan Chiles wondered if the LAGERS plan was more financially stable than the city's Police and Fire fund, which is facing a nearly $200 million shortfall.

"LAGERS is much larger, and the risk is certainly pooled," said Sheila Maerz, the city's human resources director. She said the city is further protected because payments to LAGERS - which already covers other city employees - can only rise by up to 1 percent a year.

"As someone who is in the LAGERS pension, I am very comfortable with (it) at this point," Maerz said.

Burris added that the LAGERS plan was funded at more than 100 percent before the recent drop in the stock market; the plan is now funded in the mid 80-percent range. By comparison, the city's pension is currently about 30 percent funded.

Burris also noted that staff wanted to have the proposal on the agenda now so that if the tax passes, the move can be made quickly to allow the city to start new Police and Fire training classes.

If the sales tax passes, council is expected to vote on the pension plan changes at its Feb. 9 meeting.

Land for sale

City officials are requesting development proposals for 293 acres of land near the Southwest Wastewater Treatment Plant.

The land, which the city purchased in small increments during a 30-year period, was intended to serve as a buffer zone around the plant.

The extension of James River Freeway made the buffer zone unnecessary, the city said.

Proceeds from the sale to a developer would be returned proportionally to the city's Sanitary Services Fund and General Revenue Fund. Burris recommends those proceeds be applied to the Police and Fire Pension Plan.

The deadline to submit proposals is 3 p.m. March 30. They will be judged on acquisition amount, qualifications, viability of a proposed development, quality and detail, and the potential to enhance tax bases and create jobs.