FORT SMITH -- Finding a solution to the anticipated shortfall in pension funding for Fort Smith police and firefighters is more than just about the numbers, one officer told city directors Tuesday.
Police Cpl. Matthew Holloway, president of the local Fraternal Order of Police chapter, sat listening at a city meeting as the directors wrestled with how to come up with an extra $1.2 million to keep the city's portion of the state Local Police and Fire Retirement System from running out of money by 2019.
Raising the extra money would keep the fund solvent until 2026, City Administrator Ray Gosack told directors Tuesday.
The directors have been talking on and off for months about the problem but haven't reached a decision. On Tuesday, they were finishing a lengthy discussion on obstacles and possible fixes when they asked for police and fire department input.
"It's very upsetting when you're talking about my life like it's just numbers and the men and women that have sacrificed so much," Holloway said.
He said with the low pay, dwindling benefits and a job that takes a toll on the body, officers have only their pensions to look forward to.
He proposed the formation of a committee that includes police and fire personnel to offer some possible sources of money.
Fire Chief Michael Richards said Tuesday that he couldn't recommend asking residents for more tax money before making sure that all possible spending cuts from the department were considered.
But the department budget has no extra money to cut, he said.
"The result of any cuts we make within the Fire Department is going to be service cuts, and I can't do that either," Richards said.
Fort Smith this year will pay nearly $6.4 million into the state police and fire retirement system, according to a memorandum from Gosack.
Of that, the memo said, more than $2.76 million comes from property tax revenue, $1.36 million in state insurance tax turnback funds, $521,160 from part of a sales tax for new firefighter positions, $137,000 in fines, $6,000 in interest and $1.57 million in employee contributions.
To try to close the gap, City Director Keith Lau proposed that the directors vote at next week's meeting on reducing the percentage of officers' working paychecks that makes up the basis for what retirees receive for their pension.
City directors voted in 2004 to base retirees' retirement benefits on 91.84 percent of their working paychecks. Passage of Lau's proposal would roll the percentage back to 82.32 percent, which Gosack said is what a majority of other cities in the state system give their retirees.
The change would reduce the city's contribution to the fund by $450,000 this year, making that money available to apply to the $1.2 million funding gap.
In addition to rolling back the retiree-pay percentage, Gosack recommended increasing the franchise fees for electric, telephone and gas service from 4 percent to 4.25 percent and for cable TV from 4 percent to 5 percent. The fee increases would raise an extra $554,000.
He also recommended implementing a business license fee that would raise about $1.4 million a year.
Mayor Sandy Sanders said rolling back the retiree-paycheck percentage was only a partial solution, but the directors said they were not ready to act on any additional solutions after Tuesday's discussion.
Metro on 05/28/2015