Dear Mayor and Council Members:
I have written you previously expressing my concern about the ongoing daily cost of the underfunded Police and Fire Pension. This amount is about $ 26,000 per day, a total of about $ 9,750,000 per year after year for as long as this condition exists. The citizen taxpayers of Springfield cannot afford this unnecessary, wasteful situation.
The adversarial relationship that exists between City Council/Management and the Springfield Police Officers Association and the Firefighters Union is unnecessary and unacceptable. The commitments made by the citizens of Springfield to the public safety employees of this city need to be respected by City Council and the City Manager.
Changes made to the Police and Fire Pension Plan by Ordinance #5546 in May, 2006, which created a two-tier plan with reduced benefits for employees hired after June 1, 2006, should be repealed. These changes have created inequity and conflict between veteran employees and new hires, employee turnover, and as a result, increased training costs.
After reviewing a great volume of financial information, attending mutiple meetings with Council, pension board members, and city employee groups, I have come to the conclusion that we must take permanent, definitive action to solve the underfunded status of the Fire and Police Pension Fund. I believe that any proposal that includes providing funding to resolve this problem by even a temporary, dedicated sales tax must be carefully considered. The current economic situation with increasing inflation caused by rising fuel and food prices makes this a dangerous time in which to ask the citizens of Springfield to pay higher taxes. However, I also believe that if all the parties involved are willing to make a few concessions toward a clearly defined approach, then communicate honestly and effectively with the citizens of Springfield, that the citizens will support a permanent solution.
I believe that the following components will accomplish a permanent, long-term solution:
1) A 1% Sales tax proposal should be placed before voters. The proceeds of this tax should be placed directly into the Pension Fund immediately upon receipt from the State of Missouri. This dedicated sales tax should be for a period not to exceed three years.
2) Suspend the collection of the 1/4% Capital Improvement and 1/4% Parks and Recreation Sales Taxes during the three year period when the Pension Fund sales tax is in effect. This will reduce the impact on the taxpayers of Springfield.
3) Repeal Ordinance # 5546 which created the two-tier benefit plan.
4) The City of Springfield must guarantee that the full $ 6,500,000 of underpayments over the last three years will be paid before the 1% Sales Tax becomes effective.
5) The employer contributions to the plan (on a permanent basis) will be equal to or greater than the employee contributions, and will be made in a timely manner corresponding to the normal Federal, FICA, and State Witholding Tax deposit requirements.
6) The lump sum return of investment provisions of the plan will be modified to provide for the return of investment over a period of five to ten years dependent upon the age or circumstances of the recipient.
7) No increases in the benefits provided by the plan will be allowed if the plan is less than 100% funded.
The budget cuts required of all city departments in order to fund the $ 5,200,000 additional contribution to the Police and Fire Pension Fund is only a band-aid on a gapping wound. The changes to the plan made in 2006 were ill advised and not a permanent solution. We need to get the wound stitched closed so that true healing can begin.
Let's bring all involved parties together to achieve a permanent solution to this problem and trust the citizens of Springfield to support our efforts with their financial support.
Fred B. Ellison