FAYETTEVILLE -- City Council members had too many concerns and unanswered questions Tuesday to decide the fate of a failing firefighters' pension fund, prompting the mayor to call a special meeting before the end of the month on the question.
The council took no action on a proposal to hand over administration of the Fayetteville Firemen's Pension and Relief Fund, which benefits 51 retired firefighters and their widows, to the much larger Arkansas Local Police and Fire Retirement System. The state organization says the city must approve the transfer by the end of the month or else wait until next year, so the council will meet Oct. 30 to try to get a final vote up or down.
Meeting information
Fayetteville City Council
• When: 5:30 p.m. Friday, Oct. 30
• Where: Room 219, City Administration Building, 113 W. Mountain St.
• On the agenda: The council could take a final vote on the ailing Firemen’s Pension and Relief Fund.
Aldermen said Tuesday they were agonizing over the decision. Firefighters deserve and were promised the benefits, but the plan could cost taxpayers an unknown amount of money or could even be unconstitutional, aldermen and the city attorney said. Some council members suggested a public vote, perhaps to increase the 0.4 mill property tax going to the fund. All agreed they weren't ready to decide.
"This is the worst I've felt about a position since I've been here," Alderman Justin Tennant of Ward 3 said. The state plan relies too much on hopeful financial forecasts and wouldn't be "a good business decision," he said.
"Hope is not a strategy," Tennant said. "That's a horrible position to be in, and it's a horrible position to put us in."
The pension fund's board sent the proposal to the City Council last month, viewing the state system, often called LOPFI, as the best bet to keep the fund from running out of money. Members receive between about $1,300 and $73,300 a year.
An actuary said the city might not have to contribute any more money to the fund under the LOPFI plan, but he used forecasts for revenue and investment returns many city officials have called overly optimistic.
City Attorney Kit Williams said Tuesday a court could also find the transfer to LOPFI unconstitutional. The Arkansas Constitution proclaims local governments may not "obtain or appropriate money for, or loan its credit to, any corporation, association, institution or individual."
If Williams is correct, similar transfers across the state could also come under court scrutiny.
Alderman Alan Long of Ward 4 said he asked the state attorney general to provide an opinion on the transfer and hoped to hear back before the Oct. 30 meeting.
Williams has long clashed with the pension board over whether the city is responsible to prop up the fund if it fails -- the beneficiaries have said the city is obligated, while Williams disagrees.
"It's looking like we're going to court," no matter what the council decides, Alderman John La Tour of Ward 4 said.
Several beneficiaries and their supporters came to Tuesday's meeting to say there should be no question over whether to transfer the fund and keep benefits flowing. The people getting benefits depend on them and suffered physical and mental wounds in the line of duty, many said.
The benefits, set at 90 percent of ending pay, are still slightly lower than today's firefighters can expect, and the city pays more toward today's pensions than it did for the old fund, said Pete Reagan, a fund trustee. The fund stopped taking members in 1983.
"We did the same job as current firefighters, worked the same 56-hour week," Reagan said. "I cannot see why we should be treated differently."
No one disagrees with those points, La Tour said, but the City Council has a "sacred duty to guard the public purse."
"This is the dilemma we're in," La Tour said.
In other business, the council endorsed a $426,000 project to build restrooms and improve the parking lot at Gordon Long Park and a $3.4 million project to expand the city's recycling and trash collection facility.
City staff members said the trash facility is cramped, inefficient and smelly. The contract with Benchmark Construction would more than double the floor space while making the entire structure more efficient, city engineer Chris Brown said.
La Tour and Long voted against, with La Tour criticizing the cost and the fees that pay for it.
NW News on 10/21/2015