The City of Berea will pay at least $580,000 more annually for non-hazardous retirement benefits for its employees in the next fiscal year. That is a certainty. But it may pay an additional $550,000 every year for a total of $1.1 million if the city enrolls police and fire personnel in hazardous duty retirement coverage. $550K or $1.1 million. Council members were presented with that financial dilemma Monday night when officials met in a special called meeting to discuss Berea’s participation in the County Employees Retirement System (CERS). The city has been enrolled in non-hazardous coverage since 1992.
Monday’s session consisted of a presentation by City Administrator Randy Stone, followed by questions and comments from council members. Points addressed at the meeting included:
Councilman Steve Caudill suggested the city should offer hazardous retirement duty benefits to police officers and firefighters so Berea can continue attracting and retaining a qualified group of first responders. The program enables first responders to retire as much as 5 years earlier than non-hazardous duty employees, theoretically allowing the city to maintain a younger stable of police officers and firefighters.
When informally polled by council members Tom Schultz and Billy Wooten, first responders indicated they want hazardous duty retirement benefits.
Caudill noted Berea is the only entity in the county that is not enrolled in hazardous duty coverage.
Councilman Jim Davis cautioned there’s no way of knowing how much CERS program costs will increase next year, adding that once cities are enrolled in the hazardous duty program, they can’t drop out.
Bluegrass Health declined to continue as the city’s health care provider next year. Until bids are solicited, it is unknown how much health care will cost the city and its employees in 2018-2019.
Councilman Ronnie Terrill suggested the city should wait until after the upcoming legislative session to determine whether enrolling in hazardous duty is in the best interests of the city.
Councilman Jerry Little, while not opposed to joining the program, stated city leaders should know how much it will cost and how the city will pay for it before enrolling.
Stone said because he doesn’t anticipate an increase in the city’s revenue stream, council would likely have to consider a number of options for funding the yearly rate hike, which would not be less than $1.1 million annually if the city enrolled in the program. Options include cutting expenditures, paring back current staffing levels, doing away with the city’s rainy-day fund, cutting certain equipment purchases, or possibly exploring increases in property and/or insurance taxes.
If there are increased retirement costs in the coming years, Little questioned whether that could necessitate personnel cuts, and if so, whether having fewer police officers and firefighters could potentially endanger public safety.
The council directed Stone to assemble budget projections to determine the potential costs of the program, and to present said report to the Audit and Finance Committee.
The council’s Audit and Finance Committee will discuss the matter again in a future meeting to determine if the city should enroll in hazardous duty retirement coverage program before the next fiscal year.