Yet, that excuse — that a can’t-miss, tasty option isn’t on the table — won’t fly. A doable pension solution for the city’s cops and firemen has to be found, and none too soon. Time is ticking away.
We trust that the gravity of this situation isn’t lost on the Anniston City Council, particularly the two councilmen, Ben Little and John Spain, who did not attend last week’s meeting with representatives of the two departments.
The problem stems from the pension plans’ design and the Great Recession of 2008. The truth is cold, yet simple: More money is being paid to retirees than is coming into the system through contributions and investments. That won’t work long-term.
The program lost nearly $5 million in 2008. State law doesn’t allow for changes in the plan’s contributions or benefits as the economy ebbs and flows. Anniston cops and firemen, meanwhile, do not pay into Social Security; the city-mandated pension program is their only retirement income.
Last week’s meeting revealed no quick, obvious fix; neither is there reason to sugarcoat the problem. Each of the three possible solutions that have been discussed requires the city to increase its contributions to the beleaguered pension fund.
Anyone aware of the city’s fiscal health realizes Anniston’s checkbook is already tapped out. As City Finance Director Danny McCullars said, “At the current budget and revenues, it’s impossible to do anything we’ve been talking about.”
If a decision had to be made today, the best option would likely see the police and fire pension program — now valued at $21 million — buy into the Retirement Systems of Alabama. That’s a program with stability and a fair level of public confidence.
Yet, even the RSA option has nasty byproducts: The city would have to write an annual check for $3.6 million to the program for a lengthy period of time, and cops, firemen and retirees would see their benefits cut by approximately 15 percent.
That’s not good for the city, which can’t afford the extra expense unless new revenue is brought in to its coffers, and it’s not good for cops and firemen, either — even if supplemental pension programs are secured. We have to ask: Would residents welcome a 1-percent sales-tax increase as a remedy to this pension predicament?
The nightmare scenario for the city would be for this problem to become a double-whammy of negativity. It’s bad enough that cops and firemen may have their pensions slashed. If some of the city’s best cops and firemen decide to leave Anniston — or retire early — to escape this crisis, then the police and fire departments would suffer, as well.
This isn’t a personnel matter. It’s a dilemma that could affect everyone in the city. The City Council would be wise to give it the attention it deserves.