A group of residents that agreed to help inform Joplin voters about a half-cent sales tax proposal for the Police and Firemen's Pension Fund was briefed Wednesday on the history and details of the plan.
"It will put us in the financial position that we cannot only keep the great employees that we have but reach out and recruit some new ones. Also, it helps not only police and fire but the whole city," Mayor Gary Shaw told the Sales Tax Citizens' Task Force at its first session.
Task force members were appointed by the City Council. Two or three more members could be appointed by the council at its meeting Sept. 3, the panel was told. Similar city committees in the past had about a dozen members.
Leslie Haase, the city's finance director, said city officials have found such committees helpful in the past to go out and speak to groups and organizations about city proposals.
She explained that the city created a pension fund for police and firefighters in 1947. Public safety workers are not covered by Social Security, she said. Other city employees are covered by a state pension fund, the Missouri Local Government Employee Retirement System.
The City Council agreed to place a measure on the Nov. 5 ballot asking voters to approve a half-cent increase in the general sales tax that would be paid into the pension fund to fully fund the plan because of the escalating expense to the city.
The funded level of the plan, meaning the amount of money in the fund to pay out benefits owed, has declined over the last 15 years largely because of drops in the value of investments during economic recessions, Haase told the committee. Though members of the plan and the city have decreased benefits and the city has made large payments into the fund, those efforts have not brought the funded level up enough to assure that all the benefits owed over time can be paid.
Liability for the troubled plan last year resulted in Standard & Poor's downgrading the city's credit rating.
The decrease in benefits has contributed to problems the city has experienced in the last two years in retaining and recruiting police officers and firefighters, the committee was told.
As a result of the issues with police and fire retention and recruitment, the City Council agreed to allow the formation of an internal work group to discuss the issues and try to find a solution.
The work group involves representatives of the fire and police departments and their unions, other city employees, administrators including the interim city manager, city attorney and finance director, Mayor Gary Shaw, Councilman Ryan Stanley, and a consultant.
That work group, after about a year of study, recommended the sales tax proposal as a way to address the increasing financial burden of the pension fund and the issues it caused with keeping employees.
The proposal is one that a number of Missouri cities, including Springfield, Jefferson City and St. Joseph, have employed to address pension issues. Haase said she expects to see more cities follow suit.
The city needs $72 million to fully fund the pension fund and move police and fire employees into the state LAGERS fund after the city plan is frozen to new members. Haase said it is projected the sales tax would provide enough funding to allow the elimination of the tax in 12 years.
The language in the ballot proposal will limit the use of the money to freezing the current fund and moving employees who are eligible to the LAGERS fund, Haase said.
The committee will meet again at 4:30 p.m. Wednesday, Sept. 4, to continue discussions about the proposal and the role of the task force members.