Tuesday, December 18, 2012
BELLA VISTA — Despite the majority of the City Council expressing interest in switching to a state-run pension plan for the city’s nonuniformed employees, aldermen voted down a change to Arkansas Public Employees Retirement System on Monday.
At a work session last week, the majority of aldermen said in an informal survey they would support a switch to APERS. A 3-3 tie-vote at Monday’s meeting defeated the issue.
City Council
In other business:
• Mayor Frank Anderson will send a response letter to Property Owners Association General Manager Tommy Bailey offering to purchase the POA-owned police and fire buildings for $1.8 million. Bailey sent a letter to Anderson Dec. 3 notifying him of an increased rental rate for police station and three fire stations to more than $14,000 per month from the current $650 per month, effective Jan. 1, 2013. Anderson will offer the city purchase the buildings at market value less 30 percent for Stations No. 1 and 2, minus $400,000 for renovations at Station No. 1. The building at Station No. 3 is inadequate for future use, according to a draft of Anderson’s letter, and therefore the city would be willing to pay slightly more than the cost of the land. If the proposal is accepted, the letter said the city expects to retain the current lease agreement until closing. If the sale cannot be made, the letter states the city will proceed to vacate the buildings.
• Aldermen approved a 2013 budget of $11.5 million.
Source: Staff Report
Alderman Doug Farner made the motion, during budget talks in the meeting, to replace any funds allocated to the System with an increase in the city’s contribution to the current 457 retirement program. Alderman Dick Rooney agreed, and cited the long-term increasing expense of the System as the reason he was against the change.
Alderman Earl Berdine was the third member voting against the switch.
APERS would cost the city about $235,000 annually.
Rooney also said he was not in favor of forcing employees to join the program.
Under APERS, the city would contribute 15 percent to the employees’ 5 percent, and participation by all 30-plus nonuniformed employees would be mandatory. Under the current 457 plan, less than half of nonuniformed employees contribute the full 5 percent.
In a survey of nonuniformed employees conducted by the mayor last month, only five or six nonuniformed employees said they would choose not to participate in APERS.
Aldermen Jim Wozniak said if the city didn’t change to APERS now, it would likely not come up again. He argued the lack of a pension plan for nonuniformed employees might create a sort of “second-class of employees.”
“I can sit here for hours and tell you that you cannot live on a 401(k retirement plan),” he said.
Alderwoman Arline Hutchinson said so many city employees have remained loyal to the city, after working for the Property Owners Association for many years, and she felt they have been short-changed because they have made the choice to stay.
Instead, aldermen voted to increase the city’s contribution to the 457 plan to a 2-to-1 ratio: for every dollar the employee contributes, the city will contribute two, up to 5 percent of the employee’s pay.
If all nonuniformed employees participate fully in the 457 plan, it will cost the city about $128,000 in 2013.