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Nov 2, 2009 2:54 PM
by: markofgrace
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Registered:
1/23/08
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Re: Post pension sales tax questions here
Posted:
Oct 30, 2009 11:14 AM
in response to:
concerned
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QUESTION:
What kind of a petition do we need to get in order to bring a reduction of promised benefits to a public vote. I am sure there is some type of petition that will need to be circulated. This might be a solution to help solve problems that taxes will not completely address. This is a little give and take. Sounds fair to me.
ANSWER:
The Pension benefits are defined in the City Charter, and so any changes to benefits already earned would require amending the Charter. City Charter Section 19.28 set that process. A petition to amend the Charter would require valid signatures from not less than 10 percent of the current number of registered voters within City limits to go to a ballot.
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Posts:
22
Registered:
1/23/08
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Re: Post pension sales tax questions here
Posted:
Oct 30, 2009 4:13 PM
in response to:
lifeloans@hotma...
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QUESTION:
Question on the statement that the city can not move new employees into the Lagers plan until there is enough revenue to support the existing plan and pay the Lagers contribution on new employees. Does the City intend to pay their 35% contribution on the Tier 1 pension fund and then pay in addition to that the contribution rate for the new employees.
ANSWER:
Yes, the City would continue to pay the 35 percent of payroll rate for the employees remaining in the current self-funded plan, mainly those in the Tier 1 plan. The City would pay the LAGERS rate for new employees and Tier II employees who move into that plan. Currently, the LAGERS rate is be estimated at 14.5 percent of payroll for Police and 19.3 percent for Fire employees. LAGERS has a specific plan called L-11 for public safety employees. The City would not pay both rates on any employees; they would pay the rate for whichever system the employee is in.
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Posts:
3
From:
Springfield, MO
Registered:
10/29/09
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Re: Post pension sales tax questions here
Posted:
Oct 30, 2009 4:13 PM
in response to:
lifeloans@hotma...
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Just a thought. I believed that this forum would be answered fairly quickly since the tax vote is coming Tuesday. I guess we will have to make our decisions without feedback. I am going to see what information I can get through public record to see if any of the questions that have not been answered are available.
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Posts:
22
Registered:
1/23/08
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Re: Post pension sales tax questions here
Posted:
Oct 30, 2009 5:35 PM
in response to:
Lindsay
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QUESTION:
Why has there never been an independent audit of the police/firefighters fund. This would explain to the citizens of Springfield in detail exactly what happened to this fund. Where the money went, who did it and when. And also, would enforce the idea that city leaders are not hiding anything or protecting each other.
ANSWER:
Police Fire Pension Plan has an independent audit annually. This audit verifies the information on the financial statements is accurate and complete. The audit also reviews the calculation and payment of pension benefits. In addition to this audit, the Board of Trustees contracted for a performance audit in 2005. This audit reviews the investment results for the Plan to determine if Plan assets were invested appropriately for the targeted investment return. The results of this performance audit included some suggestions which were incorporated in the new investment policy statement and asset allocation adopted by the Trustees in 2006.
This question gets to the heart of one of the biggest misconceptions about the pension shortfall. There was never a stack of money that was taken from anywhere, by anyone. The plan is more than $200 million underfunded due to several factors:
• Changing actuarial assumptions based on longer lifespans and retirement years.
• Changes in benefits made in lieu of salary increases.
• Poor market returns due to a relatively conservative investment strategy. This strategy was changed in 2006, as noted above. It's worth noting that the returns we are talking about here pre-date the current recession by several years.
• During four fiscal years in this decade, the City did not contribute its full recommended level of funding. This equates to about $10 million in today’s dollars for the total of those four years. It's worth noting that the City has now contributed the full $10 million amount back into the fund, using money it recently received from settled lawsuits with telecomm companies.
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Posts:
22
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1/23/08
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Re: Post pension sales tax questions here
Posted:
Oct 30, 2009 5:49 PM
in response to:
concerned
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concerned - Please understand that we are dealing with each question as they come in and we attempt to get the right answers with as much as detail as possible, which takes some time. We are trying to answer as quickly and as accurately as possible because, as you noted, the election is now just a few days away. I believe all of your questions to date have been answered. If not or if you have more, please just let us know.
Mike
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22
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1/23/08
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Re: Post pension sales tax questions here
Posted:
Nov 1, 2009 7:49 PM
in response to:
Mike_Brothers
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Here are a couple of questions we received via e-mail from Markofgrace.
QUESTION:
1. On 10/12 the City Attorney affirmed “State and Federal law requires City to administer money the way the ballot is written…all ordinances can be changed…The only unmovable piece is what goes in the ballot language.” The ballot language proposed Nov.3 states: “solely for the purpose of providing revenues for the Springfield Police officer’s and Firefighters Pension” System”. In accordance to state statue the wording “System” the city has used includes the lawful expenditure of revenue for Operation of Public Safety departments, pension programs, and health care for employees and pensioners of the public safety departments. The ballot language further states: said tax to sunset upon the pension System fund reaching a fully funded (100%) status as determined by an independent actuarial study.
Specifically, What amounts of the total Public Safety tax revenue does the city plan to appropriate for Operation of Public Safety departments, pension programs, and health care for employees and pensioners?
ANSWER:
All of the revenue will be used for the Pension fund. While the state enabling legislation does allow broader uses for other public safety operations, Springfield's ballot language specifies that it will be used "solely" for the pension fund. If it were approved, diverting it to other uses would be illegal.
QUESTION:
2.City officials were acutely aware of the pension deficit in 2001 prior to several Council approved tax renewals being placed on the ballot. As Councilwoman Rushefsky clarified “ Council has been criticized for not paying attention to core city services… there is no more core service than police and fire.”
Why weren’t citizens made aware of the pension deficit at that time and some of the “other things” put on the back burner? Aren’t voters facing the same scenario with upcoming renewals in 2010-2011 that by passing this tax it will elevate the need to examine the the need to reduce “other things”?
ANSWER:
While the fund suffered during the market downturn after Sept. 11, 2001, it was the results of the 2004 experience study and its updated actuarial projections that more seriously affected the funded ratio. After that, a review committee was formed and that led to the changes that created the Tier II plan. Certainly, the changes made during that time were very controversial and received media coverage. The fund's performance did show improvement after those changes were made. But then the state law was changed to require cities with plans funded at less than 60 percent to make the full actuarial contribution once every five years or face withholding of 25 percent of all city sales tax revenues. The 2006 changes were going to take too long to rely on that to restore the funding level. During the review committee process and the changes to the plan, there was not any real discussion of using a sales tax to stabilize the fund. At that point, the state didn't allow cities to ask for a municipal sales tax for public safety; it was limited to countywide tax issues.
As for any upcoming renewals, voters will have the opportunity to judge each program on its own merits and decide whether to continue it if the Council authorizes putting it back on the ballot. That's one of the reasons Springfield has always used fairly short sunset timeframes for the capital improvements and transportation sales taxes so that the City would be accountable for its performance in those programs.
-Louise Whall, Public Information
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Posts:
1
From:
springfield
Registered:
11/2/09
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Re: Post pension sales tax questions here
Posted:
Nov 2, 2009 2:10 PM
in response to:
Mike_Brothers
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According to the actuary report released 10/09
http://www.springfieldmo.gov/boards/firepension/pdfs/actuarial_value_jun09.pdf
The AFC set to cover the .03 multiplier negotiated in 2000 was calculated at 8.5% in 04" as of 6/09 the AFC was calculated to be 7.25%. The actuary recommends effective 7/10 the Employer contribution be 57.77% and the Employee contribution be 15.34%.
In the city's declared resolution it states "if" tax passes the city will commit to only pay 35% employer contribution and public safety employees will pay 13.6% as long as the tax is in place.
So my question is does the ballot language wording "pension system" mean "if" voters
approve a Public Safety Tax Nov.3 a portion of the revenue will be appropriated to cover the remaining 22.77% Employer & 1.7% Employee contributions in addition to the $204 million unfunded liability? If so according to the ballot language "said tax to sunset upon the pension System fund reaching a fully funded (100%) status as determined by an independent actuarial study.The study states the AFC is recalculated every 5 years as such will the SYSTEM ever be a 100% funded?
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