MORGANTOWN, W.Va. — Morgantown City Council and members of the police and fire departments are working through options to fund pension plans for first responders at a rate the city will be able to afford. The city met with members each pension board Tuesday night to hear options to deal with an unfunded pension amount of about $118 million between both pension funds.
City councilors are considering keeping current firefighters on the plan they were hired in with and to stop accepting new employees. The current plan requires the city to make annual payments totaling 107 percent of the total payment made the previous year. New employees would be enrolled in the state pension plan where payments are determined by a third party.
Councilors addressed holding the 0.25 percent portion of sales tax revenue that is specified in Morgantown City Code 733.13. Deputy Mayor Jenny Selin and Assistant City Manager Emily Muzzarelli each said the money was being held because they were looking for an option to meet the needs of the firefighters and the city. It was estimated the money held for a two-year period could have made an additional $500,000 in interest income if it had been invested in the current pension plan.
“What I’m saying is the money has not been spent on anything else; it’s sitting there,” Muzzarelli said. “We all agree that maybe in a different fund it could have made money; it could have lost money, but it could have made money.”
Seventh Ward Councilor Brian Butcher did not express optimism on the future ability of the city to collect sufficient revenue to meet the obligations for the plans. One scenario requires the city to pay a total of $2 million annually to each pension an amount that would equal about 10 percent of the total city budget.
“I’m concerned about WVU declining enrollment and revenue sources for cities being taken away, and we haven’t seen real excitement from the state legislature in granting us the ability to collect more revenue,” Butcher said.
An increase in the fire fee of 15 percent would raise approximately $641,000, according to Morgantown Finance Director Jonathan Furgison. Firefighter Tanner Dalton suggested a $10 user fee per WVU student that could raise another $230,000 based on a Morgantown campus population of 23,000.
“We’re not bringing new land in,” Fifth Ward Councilor Danielle Trumble said about funding the later years of the plan. “So, what are we going to cut?”
Furgison said a draft proposal is being developed by Jim Ritchie with Bolton Partners that would allocate the existing sales tax money being held and future annual payments of .25 percent. Furgison stressed this is an exploratory option that has to have approval from the Municipal Pensions Oversight Board (MPOB) due to an increased discount rate.
“That $10.8 million divided by the next 37.5 years, divided by two for two payments,” Furgison said. “We actually get a credit against how much the minimum required contribution is by the city—it gives us some flexibility.”
If the alternate plan is accepted by the MPOB, current firefighters would keep their pension, and new hires would be enrolled in the state plan. First responders said local officials have added some benefits to working that could make it easier to retain current firefighters and recruit new hires under state plan. Concerns about benefits had been raised in the past if the city were to direct new hires to the state plan.
“We’ve heard recruitment and retention was important, Sixth Ward Councilor Dave Harshbarger said. “That was one of the reasons we funded the Defense In-Depth as a training facility; we’re building a new fire station, and we’re looking at a training center for the fire department—those are things we are committed to trying to find a way to fund.”
The MPOB could make a decision in the plan Thursday. First responders have asked for an additional meeting to review the proposal if approved.