MORGANTOWN, W.Va. — Members of the Morgantown City Council will meet with leaders of the city firefighters and police pension boards to contemplate moves to address fully funding both plans.
The council agreed to meet with members of both pension boards during their regular meeting Tuesday as part of the placement of a multi-layered plan to address the funds on a future agenda. The decision was made after a presentation by City of Morgantown Finance Director John Furgison, who encouraged the council to consider a variation of city fire service fee increases, a reexamination of sales tax fund allocations, and potential cuts to programs to go along with a move to the State Municipal Pension Plan to prevent costly liabilities and fully cover both pensions.
“We’re looking at paying those pensions in full and not changing our liability on those pensions,” said Morgantown Deputy Mayor Jenny Selin. “And setting up new hires on the state plan so we’re not adding to our liabilities.”
In the presentation to the council, Furgison explained that the city needed to consider a multi-faceted proposal due to a combination of fund allocation errors that occurred over several years. This includes the lack of a transfer of city one percent sales tax funds towards the pension funds affecting interest earnings as well as an ongoing decline in contributions to the firefighter and police pension funds as a whole. Those factors resulted in not only a projected future liability of over $118 million for the city to address ($68 million for the police pension fund, $50.2 million for firefighters) but also lost state contributions that are covered if the city maintains a 107 percent contribution to the current pension plan.
“I don’t want you thinking there was money lost,” Furgison told council members. “But we lost the opportunity to make an additional $500,000- it wasn’t millions of dollars.”
Furgison also mentioned that the city liabilities to cover both current firefighters and police on the pension plans and future employees on the state plan would be costly. Early projections to account for employees and retirees over the course of 38 years would cost the city just over $4 million per year, approximately ten percent of the city budget. While he mentioned recent movement of the approximately $10 million in allocated sales tax funds to a money market account as a partial remedy that has taken place, the variation of fee increases and potential long-term cuts will need to be considered by the city.
“We are talking about a significant increase in how much we are contributing to this, and we’re talking small dollars,” Furgison said. “But the reality is we need to do something different than we’re doing now.”
If the city made the move towards the State Municipal Plan (an over 91 percent contribution reduction from the city plan) as well as raised the city fire service fee, the city is projected to cover approximately $2 million of their annual obligations. As a result, Furgison mentioned that city capital improvement projects and some aspects of city services (BOPARC was mentioned multiple times) could be at risk of seeing cuts. An issue that is figured to impact the city sooner rather than later.
“Now, we need to come up with an additional $2 million per year, per plan, and we have to figure out what gets cut—that’s the reality,” Furgison said.
The city council, members of the city police and firefighter pension boards, and city staff are expected to be in attendance for those meetings where Furgison encouraged placing all options on the table. He not only listed BOPARC as an area that could be in line for budget cuts but also for city funds dedicated to the demolition of dilapidated homes and other capital improvement funds. With over $100 million in projected liabilities for the city, Morgantown City Council is asked to be ready to make tough decisions fast.
“The reality is that we will have to make some real, significant, hard decisions about what gets cut,” Furgison said. “That’s what we’re really talking about—$4 million per year.