June 10–Escalating costs to keep local pension fund coverage for police and firefighters is continuing to be a drain on the city of Joplin’s general fund despite 10 years of work to shore up the retirement fund.
The city’s 2018 fiscal year budget for the general fund totals more than $28.3 million. Of that, employee costs for wages and benefits take up nearly three-fourths of the budget for that fund, or about $21 million. Operational costs are about 20 percent, or about $5.7 million.
The city’s finance director, Leslie Haase, this past week identified the pension fund as one of the major issues hampering the city’s financial sustainability in a presentation to the City Council on options to cut costs. One of those was a proposal to move public safety employees out of the pension fund and into a state retirement plan and Social Security.
Council is scheduled to take up more discussion of the options at a work session at 5:45 p.m. Monday.
The city for a decade or more has been making changes to try to prop up the pension plan. Those changes included raising the city’s annual contribution from 17 percent of payroll to around 30 percent. Lump sum payments totaling $2.5 million were added.
“Over this 10-year period, the cost to the city has been $11.8 million,” Haase said.
The average contribution by the city per employee is now up to $12,000 a year, an increase of about $6,200.
“This explains a lot of financial issues with the city,” she said, including the difficulty in having money to grant raises.
City officials said in 2009 the city could afford to make those contributions at the 30 percent level for only a short time, she said.
“The city is going to see more pressure on our contribution rates over the next couple of years,” she said.
Haase told the council the increased payments into the fund are not accomplishing what they were intended to do, which is raise the percentage of money on hand to pay out benefits. Instead, the city’s costs continue to rise.
If the proposal were adopted, new employees and current employees who choose to do so would be moved to a state retirement plan, LAGERS, and Social Security. They would make a 10 percent contribution, but 6.2 percent of that would be paid into Social Security and the remainder of the contribution would be offset by a 3.8 percent raise. The city would have to establish a funding source to fund the pension plan until all of its existing obligations were paid.
The city’s cost to make the annual contribution to a new type of retirement plan could reduce the city’s costs by as much as $1.09 million a year depending on how many employees participate and other variables.
The city’s other employees are covered by LAGERS.
Council member Phil Stinnett said city officials since 1998 have talked about moving out of the plan and into a LAGERS fund.
“It’s always been the dollar figure to do it has always been the reason it was never pursued. However, if we do not find a way to get to static, fixed, understandable dollars … we are going to go down the path that is unsustainable,” he said.
Fire department pay
The city adopted a policy in 2012 on overtime paid to employees who are called back in to work after they leave a shift to cover for an absence. One of those is callback pay, which gives an employee at least three hours of time-and-a-half when they are called back after a shift to work.
The fire department schedules its shifts a year in advance but still assesses callback pay instead of the regular shift pay even though the extra shifts are scheduled in advance. The fire department callback pay for last fiscal year was $407,780 versus police callback pay of $70,233, according to the report.
Fire Chief Jim Furgerson said that because that department works 28-day schedules, firefighters have already worked their regular schedule when they are assigned extra duty, and the bump in overtime is justified. He said department heads reviewed the policy in recent years and agreed it was appropriate under the policy.
It also is proposed to move the police department to a 28-day work schedule rather than 40-hour weeks.
Personal use of vehicles
A number of city employees are using city vehicles to drive home, and that is not being counted on W-2 forms as compensation. Joplin does not have a policy addressing the practice of employees taking home the city-owned vehicles they use for work. The practice has been criticized by the state auditor.
Currently, 71 city vehicles are driven home — 58 of those by police department employees and the others by members of the fire department, public works, parks and the animal control division of the health department. Some are driven up to 100 miles round trip per day. Those vehicles are fueled and maintained by the city at a cost of $142,000.
It is proposed to reduce the number of police officers who are authorized to use a city vehicle for personal driving home and to limit the use to a 12-mile radius of the city.
Police Chief Matt Stewart said the practice spreads the city’s vehicles out, so they are not all located in one area and are vulnerable to a tornado if one hit. Also, certain officers, such as detectives, can save time going to calls because their vehicles are loaded with the equipment they may need to use if called out instead of having to drive to the station, load a police car and then go to a call.
City options to cut costs
A number of options to be decided by the City Council to reduce city costs are proposed:
–Reduce the number of K-9’s. The department has increased the number from three to five. The dogs cost about $21,500 each and the annual cost of having the dogs is about $70,000, which includes extra pay for the handlers who must spend time when not on duty to care for the dogs. The recommendation is to not replace two dogs when they are retired and keep three K-9 positions. Estimated savings is $22,500 a year.
–Reduce the number of motorcycles. The department has expanded the number of its motorcycles from one to four. The leases cost $18,200 a year plus $5,000 each for supplies and equipment. They are used for parades, escorts and traffic enforcement but cannot be used to transport people arrested or during inclement weather. The option recommended is to keep only two motorcycles for parades and escorts. Savings estimated at $11,600 a year.
–End clothing allowance of $540 a year for police officers who wear regular streets clothes rather than uniforms. There are 34 officers who receive the perk toward the cost of regular clothes for the job, which costs taxpayers $18,360.
–Close Iron Gates City Hall, which formerly was used as an exercise hall for police. That is now available in the Public Safety Training Center. Saves $2,500 a year.
–Evaluate the cost and uses of fire department vehicles to determine a long-range plan for the proper type of equipment to use. Costs vary according to the type of the vehicle and the department now has a variety of trucks. No specific savings amount can be determined until a plan is developed.
–Sell tanker truck.
–Reduce minimum staffing from four firefighters to three at several stations.
–Move the operation costs of the Joplin Athletic Complex to the parks and stormwater quarter-cent sales tax fund if voters approve continuation of the tax when it is next up for election in 2022. That is estimated to save $600,000 to $700,000 a year in the general fund.
–Pay off Joe Becker Stadium debt of $1.775 million at the first available payoff date, which is October 2019, if there is a large enough fund balance in the general fund to cover the debt. That would remove $150,000 a year from the general fund to make payments for debt that extends 20 years.
–Enforce travel policy and establish policies on buying uniforms and paying for memberships and publications. Some departments are overriding the city’s travel policy, which allows department heads and managers to attend one national and one regional conference a year. No more than two employees allowed to attend the same conference or training session. A uniform policy would name the departments covered by the policy, the types and number of uniforms, the cost and replacement of uniforms. A membership policy would specify that they meet a position’s requirements. These items cost taxpayers $450,000.
–Cut phone costs by going to internet phone service to reduce yearly costs by $50,000 to $100,000.
–Eliminate holiday, vacation and sick pay for seasonal workers and steps in the pay plan, making one hourly rate for all.
–Reduce the number of pool vehicles used by information technology, Convention and Visitors Bureau, the City Council and public works departments from four to two to save $2,500 in gas and maintenance costs a year.
–Cut the annual payment to the Joplin Area Chamber of Commerce for economic development services by $50,000 to $200,000. Talk about setting caps on any future increases.
–Cap the annual subsidy to the Joplin Historical and Mineral Museum at $150,000 to save about $40,000.
–Explore reduction of lobbyist services by $18,000. The lobbyist represents Joplin in regard to state legislative issues.
The council also was presented with some options on raising taxes, such as a proposed use tax and considering an increase in property tax.
This article provided by NewsEdge.