Pension crisis to hit city’s FY 2019 finances hard — to the tune of $800,000
By JIM BROOKS
Nelson County Gazette / WBRT Radio
Tuesday, Sept. 12, 2017 –– The state pension crisis will have a larger-than-expected budgetary impact on the City of Bardstown’s Fiscal Year 2018-19 budget.
Bardstown Mayor Dick Heaton shared a copy of a letter he received last week from John Chilton, the state budget director, that details projected mandatory pension contribution increases that will be required for the fiscal year beginning July 2018.
Daniel Jeffries, the city’s recreation director, discusses the bid for adding an accessible entrance ramp for the COBEC building gymnasium.
Heaton called the newly revised required pension contribution figures “shocking” due to the large increase and their potential negative impact on the city’s budget.
City employees participate in the County Employees Retirement System (CERS), and according to the letter, the required pension contributions for non-hazardous duty employees will increase 50.47 percent for FY 2018-19. Pension contributions for hazardous-duty employees — which includes firefighters, EMS and police — will increase by 60.62 percent.
In dollars and cents, the increase represents an additional $800,000 the city will need to pay to the retirement system in Fiscal Year 2018-19.
The letter notes that the increases are expected if the Kentucky General Assembly takes no action on the pension crisis at a proposed special session expected later this year.
The revised contribution numbers were calculated after the Kentucky Retirement System board lowered its expected rate-of-return on its investments (from 7.5 to 6.25 percent), and reduced its payroll growth numbers from 4 percent down to 2 percent.
The KRS board says the higher pension contributions will have an immediate impact to decreases the CERS’ unfunded liabilities — retirement benefits the CERS does not have funds to actually pay out.
Heaton noted that the increase is not a one-time increase, nor will it be phased in over time. County employees and a number of public school employees are also covered by the CERS, and their budgets face similar mandatory pension contribution increases, he said.
With so much concern regarding the pension crisis impact, Heaton said the county’s state legislators — Sen. Jimmy Higdon and state Rep. Chad McCoy — have scheduled a Town Hall meeting to discuss the pension issue.
The Town Hall meeting with Higdon and McCoy has been set for 7 p.m. Tuesday, Sept. 19, 2017, in the auditorium at Bardstown High School.
COBEC HANDICAP ACCESS RAMP. The council unanimously approved a bid of $62,800 from Dave Cook Construction Inc. to build a handicap accessible ramp that will allow all visitors to access the gymnasium at the COBEC building, 219 East Muire Ave.
The building has an elevator that works; however, there are several steps that go up into the gym that required a wheelchair lift that required a staff member to be available to operate the lift. The new ramp will be on the west side of the building and provide direct access into the gym.
LENGTHY CLOSED SESSION. Once its regular meeting business was concluded, the council held an executive session to discuss “proposed litigation against the City of Bardstown regarding a presentation of an offer of settlement and discussion concerning the offer of settlement.”
The exact nature of the discussion was not clear, though initial comments to the media from participants was to expect a fairly short executive session.
Not long after the closed meeting began, Councilwoman Kecia Copeland and Bardstown attorney Keith Sparks and a second attorney left the council chambers. Some time after that, City Attorney Tim Butler left the council chambers to meet in private with the attorneys. He then returned to the council chambers. Butler made approximately half a dozen trips in and out of the closed meeting — presumably for additional discussions with the attorneys.
After approximately 2 hours and 20 minutes, Heaton reconvened the regular meeting and announced no action had been taken during the executive session.
NEXT UP. The Bardstown City Council next meets at 7 p.m. Tuesday, Sept. 26.
