MORGANTOWN, W.Va. — The current pension plans for the City of Morgantown firefighters and police officers are now closed for future hires, as allocations will be made to account for the insurance funds of city employees.
The Morgantown City Council voted 6-0 (Councilor Louise ‘Wheez’ Michael was not in attendance) to formally close the city-supported pension plans for city police and firefighters for future department hires as part of a move towards the West Virginia Municipal Police Officers and Firefighters Retirement System. This was supported as part of two separate ordinances passed on second reading during the council’s regular meeting Tuesday that were joined by a measure that would increase the city municipal fire service fee and a resolution that would separately fund the City of Morgantown Employee Life and Health Fund. The moves aim to curb city liabilities related to pension and insurance premiums that are already as high as $118 million, just to support the city police and firefighter pension funds alone.
“The two primary reasons for doing this are, number one, securing the participant plan’s benefits, and number two, to minimize the financial impact to the city,” said City of Morgantown Finance Director Jonathan Furgison on the switch towards the state pension system. “We respect our taxpayers and our residents enough to make sure that we are going to fund this in a way that’s not going to put a financial strain on the city,” he said.
The ordinances passed by the council to move to the State Municipal Police Officers and Firefighters Retirement System will have future hires of each department placed under the “Optional-II Financing Method.” This will require an annual contribution from the city to be no more than six percent per year that will coincide with direct financial contributions valued at around $10 million from sales tax being held by the city. According to Furgison, the moves will save the city at least $1.5 million in annual costs, a drastic difference in comparison to the 107 percent contribution that the city accounts for current and retired firefighters and police officers in the “Alternate Plan.” The payments to the state municipal pension fund will also be made in timely increments by the city as part of the move.
“I’m anticipating that we’re actually going to receive an invoice or a notice (by the state) that we’re going to have to pay either on a monthly or an annual basis,” said Furgison on how future payments would be approached towards the state plan. “I believe it’s going to be monthly, but when it comes due, we will go pay that,” he said.
Furgison also presented the annual reports for both the city police and firefighter pension funds during the meeting in order for both funds to receive a portion of the WV Surcharge Tax on insurance. Approximately $18.3 million in assets were reported for the City Police Pension and Relief Fund as of June 30, 2024. Approximately $16.9 million in assets were reported for the City Firefighter Pension and Relief Fund, with an additional $150,000 reported as the fiscal year 2025 contribution towards the municipal plan by the city.
The ordinance to increase the Morgantown Municipal Fire Service Fee by approximately 15 percent was also passed by the council on second reading in a 6-0 vote. The fire fee increase is expected to add approximately $611,000 per year in revenue, with the majority expected to go towards the active city firefighter pension funds. Funds will also be added to extra staffing and equipment allocations that are supported by the city fire fee.
“The objective of this increase is to help transition the fire pension over to the state’s Optional-II funding method, and also the secondary objective, to address rising operational costs,” Furgison said on the need to increase the city fire service fee.
The council also passed a resolution (in a 6-0 vote) that would allow for approximately $3.31 million to be allocated from the City Fiscal Stabilization Fund towards the general fund to support the City of Morgantown Employee Health Insurance Plan. According to Furgison, this was recommended due to an influx of large-scale medical claims that has resulted in the city needing to borrow funds allocated towards other parts of the general budget to cover over $1 million in costs. To prevent similar influxes in the future, representatives from each of the city departments are also expected to begin meeting regularly in 2025 to discuss insurance plans rolling into Fiscal Year 2026 as the City Fiscal Stabilization Fund is returned to whole before the end of the year.
“With the volume of claims over the past six months, we have depleted the city’s cash reserves,” said Furgison. “We’ve actually borrowed approximately $1.4-$1.845 million from the general fund temporarily, and that was just to meet the needs of our actual cash disbursements for claims,” he said.
The plans for the city in regards to the currently funded municipal pension plans for current (and retired) Morgantown police and firefighters are to have them both fully funded by 2038. This will coincide with the monthly meetings that are expected to take place within the City of Morgantown municipal departments (BOPARC, Public Works, etc.) starting this January in order to prevent a move towards a commercial insurance provider, something all members of council appeared to have opposed during Tuesday’s meeting. With a portion of the over $118 million in liabilities for the city now covered, Furgison expects the tough financial talks to continue as 2025 kicks into overdrive.
“We cannot predict that this is going to continue to be a high-spend trend, if this does continue to be a high spend every month, we’re going to have to make some tough choices,” Furgison said.