Friday, August 22, 2008

Retirement fund issues plague Duncanville budget cycle

By Brian Allen of Best Southwest Citizen

DUNCANVILLE — It’s not unusual for a number of angry citizens to storm Duncanville council chambers to debate an important issue. But at the Aug. 19 city council meeting many of the people crammed into City Hall had already spent most of the day there. That’s because they were city employees protesting potential cuts to their retirement benefits.

Council chambers filled to overflowing with current employees, retirees and their families. Joining them were citizens concerned about what might happen if valued city staff are part of a mass exodus pending the outcome of this budget cycle.

Those dedicated and experienced city staffers are a plus when serving citizens, but that experience is coming at a price. In a presentation outlining the problem, City Manager Kent Cagle explained that the average age of Duncanville city employees is 42.8 years and they have an average tenure of nearly 15 years.

Texas Municipal Retirement System problems have made news statewide as the fund has been so poorly managed officials running it didn’t know how much (or little) was in it. Cagle said in several instances retirees would receive an extra check toward the end of the year because of how well the fund was doing. Over the past year, state and city officials have learned the fund is not doing well at all.

The city manager said TMRS suffered from a bad investment plan using only bonds and inadequate actuarial methods. Expecting and seeing blank looks from the audience Cagle used an analogy many in the current economy can relate to.

“It’s like you refinancing your home mortgage every year,” he said. “You keep pushing the cost off and this masks the true cost of the program.”

Seventy percent of Duncanville’s budget is personnel and Cagle said expenditures are rising much faster than revenues. Employees contribute 7 percent of every paycheck into the system and the city matches employee contributions into at a 2-to-1 ratio.

But complicating the matter are annually repeating service credits calculated at the average of an employee’s last few years with the city. Cagle said since they’re calculated as if employees paid that much into the system their entire career, the service credits yield a huge imbalance. Also factoring in cost of living adjustments these employees would stand to receive (under the current system, at least) after leaving the city and more problems emerge. Duncanville also has investment in Social Security, driving the city’s costs for sustaining retirement benefits higher.

Current and past employees came forth asking city officials and staff to figure out someway to maintain benefits. They noted that they work for salaries often lower than their counterparts in other local cities but planned on the retirement when they made the decision to stay.

Fireman Mike Ryan said the job Duncanville employees are doing can be seen and should be rewarded.

“You don’t see a lot of houses in Duncanville burnt to the ground,” he said. “You can walk around our sister cities and see that.”

Ryan said he questioned other firemens’ loyalty when they left the city that trained them to work somewhere else. Now, Ryan said, he questions the city’s loyalty to its employees.

Recent retiree and regular contributor to the BSW Citizen forums Keith Bilbrey spoke as well. He spent 23 years with the city, the last several as its spokesman. This night he spoke on behalf of the city’s employees past and present.

“There’s times we were here there were lean times,” he said. “There were times where we didn’t get much of a raise, some years none at all. And while staff positions weren’t cut, some positions went unfilled. And I can’t tell you the number of times as an employee, you heard it tonight, that we had to do more with less. All we’re asking as retirees, don’t ask us to do that again.”

This wasn’t an action item for the council, as two public hearings are required before they approve their budget. They discussed the possibility of a tax increase to help out. But a change to the tax rate would require yet another public hearing and no doubt draw some taxpayer ire. As with most of the problems facing cash strapped cities these days, there will be no easy resolution to this one.

Pegasus News content partner - Best Southwest Citizen

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