ARKANSAS – Fort Smith leaders are expected to meet with state legislators Tuesday to talk about fire/police pension funding and an anticipated shortfall beginning in 2019.
At the Fort Smith Board of Directors study session, state legislators and David Clark, executive director of the Arkansas Local Police and Fire Retirement System, are scheduled to attend and speak.
The city’s retirement pensions are in part funded by 1 mill each. In a memo to city leaders, Finance Director Kara Bushkuhl states that projections reflect the current funding sources will not be sufficient to make the required contributions for the plan beginning in 2019.
“The primary concern the city faces is providing for the expected shortfalls in the contribution fund to continue to meet the city’s obligations,” she wrote.
Projections from the Finance Department show a negative fund balance of more than $2 million in 2019, and a $10 million-plus shortfall by 2022.
City Administrator Ray Gosack has said the looming “statewide train wreck” related to underfunded pensions will likely require a solution from the state Legislature. One of the city’s legislative priorities for the 2015 session of the Arkansas General Assembly seeks a solution to the “unfunded liabilities for police and fire pension plans.”
“A solution to these unfunded liabilities would be a constitutional amendment which would permit the use of a special local sales tax, with voter approval, to pay for these unfunded liabilities of closed local police and fire pension plans,” the city’s priority states.
A constitutional amendment proposed by the Arkansas Municipal League would improve funding options by allowing voters to add 1 mill each for the fire and police pensions, in addition to implementing 1 mill for non-uniformed employee retirement, for a total of 5 mills.
Directors are also expected to hear an update from a Whirlpool Corp. representative regarding efforts to clean the company’s contaminated site in Fort Smith.
The study session begins at noon at the Fort Smith Public Library, 3201
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