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Local officials wary of proposals that could affect pension costs

City school district treasurer has been active in protests against increase.

Pension reform fight has makings of a war

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By Megan Gildow,  Bridgette Outten,  Matt Sanctis and Kelly Mori Updated 8:38 AM Monday, January 4, 2010

SPRINGFIELD — Local school and public agency treasurers are keeping a watchful eye on proposals that could change the pension costs for their employees, but predict no dire budget consequences near term to what they pay.

Clark County

If current trends continue, Clark County could see nearly a 10 percent increase in its contributions to employee pensions by 2013.

However, state cuts and declining revenues have prompted county agencies to tighten their budgets on several fronts, with recent layoffs and county agencies saving money through attrition.

Based on that economic situation, Auditor’s Office Deputy Auditor Betty Berkshire doesn’t believe costs will increase much at all.

“I don’t see how they could increase when we’re not replacing people right now,” she said.

In 2004, Clark County’s share paid to Ohio Public Employee Retirement System was nearly $7 million. In 2008, that number had increased to $7.6 million. This year saw a slight hike with a $7.7 million contribution, Berkshire said.

Berkshire said one way increases would be possible if the state mandated a raise in the employers’ contribution, which is currently 14 percent to the employees’ 10 percent.

“If PERS is raising the employers’ share, I’ve not been notified,” she said.

Assistant County Administrator Nathan Kennedy said the county’s overall budget for 2009 was $162 million, not including the entities that the commission office doesn’t appropriate funds for.

“So $7 million (paid into PERS) may sound like a lot of money but it’s not in comparison to the overall budget,” he said. “And what we pay into PERS is our only retirement for county employees.”

Clark State Community College

Clark State will likely see pension plan costs change in the next five years, but the college’s finance director said they’ll manage any increases.

The college saw an average $40,000 annual increase between 2004 and 2008. Using that estimate the college would pay an additional $202,619 annually in employee pension costs in 2013.

However, Vice President for Business Affairs Joseph Jackson said the 2004-08 increase in payroll and pension costs was related to additional hiring to handle record enrollments.

“Whether that’s going to continue to go up... is quite questionable especially with the economy,” he said.

If it did continue at the same pace the college would plan for the increase, he said.

State funding makes up about 35 percent of college’s revenue, he said. The remaining 65 percent comes from tuition, returns on investments, the bookstore and ticket sales from the performing art center.

“The (pension) is not being directly paid by the state of Ohio taxpayers,” he said.

There are discussions about increasing both employer and employee contributions beginning in 2016 in part to cover health insurance costs for retirees.

“If that’s something that needs to be done to continue the retirement system ... I would support it,” he said.

Urbana

In Urbana, Bruce Evilsizor, director of administration, said pension rates for the police and fire divisions have been set for about 20 years. While pension rates overall are an expense for the city, he said, part of the reason for any increases would more likely have been because of an increase in employees over the years, as opposed to rate increases.

Public Schools

Part of the proposal to overhaul the State Teachers Retirement System includes an increase of 2.5 percent for contributors and their employers.

For local school boards, the change — proposed to be implemented at 0.5-percent a year over five years, beginning in 2016 — would bring the total contribution from 14 percent to 16.5 percent. Springfield City Schools Treasurer Chris Mohr has been active over the last two years in protesting the change on behalf of districts and the Ohio Association of School Business Officials.

“We clearly can’t support that and I don’t know many schools boards, across the state, that do support that,” Mohr said.

Springfield currently pays about $5.5 million a year to STRS to cover the employers’ share of contributions, said Mohr. Increasing the board’s share of the contribution to 16.5 percent would mean an additional $1 million a year.

“We’re all struggling out here, passing levies and asking people for money,” said Mohr. “The point is they need to suck it up and look for ways to cut costs and not pass that on to schools.”

Mohr favors cost reductions for STRS, including cutting salaries and bonuses for investment staff.

The contribution to STRS is 24 percent of an employee’s salary — 10 percent from the employee and 14 percent from the board — compared to 15.65 percent, including Medicare, in the private sector, he said

“It’s almost double so you would think that perhaps the message for STRS and all five Ohio public pension systems is live within your means,” Mohr said.

Mohr’s colleague, former Chillicothe schools Superintendent Dennis Leone, spent an embattled four years on the STRS operations after he researched and published findings in 2003 accusing the staff and board there of lavish, excessive spending.

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THE PENSION DILEMMA

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Hardworking individuals that invest hundreds of $$ monthly into retirement (I invest $500 monthly) have had their money stolen by big wigs at the retirement board for bonuses & invested poorly. Now we have to work longer, cut health care during retirement, etc. and we don't even get the option of contributing to and getting Social Security like others. Retirement board employees should be held accountable and responsible, we are at their mercy-THEY should have to pay for their mistakes, not us.

teacher
7:23 PM, 1/4/2010

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SPRINGFIELD COULD SAVE THOUSANDS 0F DOLLARS PER YEAR,IF CITY EMPLOYEES DID NOT DRIVE BACK AND FORTH TO CITY GARAGE FOR LUNCH EVERDAY THEY WORK. HOW LONG HAS THIS GONE ON? LOOK AT MONEY THAT COULD BE SAVED EACH YEAR. USING CITY VEHICLES.

rick
1:45 PM, 1/3/2010

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