The town’s pension-plan saga continues.
At the Longboat Key Town Commission’s regular workshop Thursday, April 15, commissioners discovered that an early-retirement incentive, which no employees took advantage of, is coming back to haunt the town.
Foster & Foster actuary Brad Heinrichs explained the state mandates that actuaries assume everyone who’s offered an early-retirement incentive will take advantage of the offer.
“When zero people took the incentive last year, we are talking about a huge finding difference for this fiscal year,” Heinrichs said.
And that funding shortfall? $3 million.
But Heinrichs and town Finance Director Tom Kelley explained to the commission that only another $200,000 will be needed to fund the town’s three under funded pension plans this year if the state is agreeable to a calculation change.
At Heinrichs’ urging, the town will ask the state to disqualify the latest pension actuarial impact statements, because none of the 17 eligible employees took advantage of early retirement.
Then, the town’s contribution would fall to $2.2 million, and the town would use $400,000 it set aside in last year’s budget to satisfy pension bills to decrease the amount owed to $1.8 million.
“That’s the lowest we can go if the state approves this,” Heinrichs said.
And, because the town already budgeted $1.6 million to fund the pension plans, the commission would have to come up with approximately $200,000 more than they planned for this fiscal year.
Police pension board trustee and retired actuary Arnold Malasky was upset to hear the news.
“We knew none of these people was going to take retirement before the budget was approved in September,” Malasky said. “It seems to me we should have reflected that instead of saying the budget’s now wrong.”
Kelley, however, took offense to Malasky’s comments.
“I didn’t have the valuation reports when I did the budget in September,” Kelley told Malasky. “That’s something the actuaries should have told me and you yourself didn’t know, either.”
St. Denis told the commission the town would hold special meetings with the pension boards and ask them to make adjustments to the latest valuation reports.
St. Denis also agreed to delay a $108,000 pension study and said that a new firefighter contract proposal submitted to the town last week should also be considered before the town moves forward.
Commissioners agreed with the delay, especially after hearing from Malasky and police pension board trustee Michael Seamon, who both told the commission the study should not be paid for until the
Legislature potentially makes changes to town pension plans statewide.
Kelley’s report continued with the news that property values are expected to drop another 10% this summer, bringing town tax revenues down $768,000 heading into next year.
And Police Chief Al Hogle will be asking for two more police officers in next year’s budget after two positions have been eliminated over the last two years.
St. Denis also told the commission during a budget presentation that he believes he needs both a police chief and a fire chief to oversee each department and does not believe a public-services director overseeing both departments will work or save much money.
The commission agreed with the town manager’s assessment and also agreed to look into a suggestion by Mayor George Spoll to possibly eliminate the fire marshal position.
The budget process, which will officially begin at a budget workshop scheduled for 2 p.m. Wednesday, May 5, is a top priority for commissioners.
Said Commissioner David Brenner: “We are looking at another $500,000 shortfall heading into next year. I suggest we find ways to address it.”
St. Denis also told commissioners the millage rate would have to be raised from 1.4903 mills to 1.6453 mills to maintain services for the 2010-11 fiscal year. If not, services would have to be cut this summer.
Said St. Denis: “I need to know whether you want to maintain the level of service or make more cuts before I present you with a preliminary budget June 1. We are very tight now.”
Commissioner Robert Siekmann said he did not want to cut the town’s level of service.
“I don’t think we can go any lower in our level of service because we are already not happy with our reduction of officers,” Siekmann said. “We have done everything we can.”
The commission will formally give the town manager a decision on whether town staff should maintain services by increasing the town millage at its first budget workshop.
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