Pine Bluff, like several other Arkansas cities, is struggling to avoid possible insolvency of its firefighter pension plan within the next decade.
To help in that cause, the city council — in its final regular meeting of the year on Dec. 17 — will consider making a one-time contribution of $394,000 in city funds to the pension fund in order to receive an additional $87,000 of premium tax revenue for the plan.
The fund covers firefighters who served before the establishment of a new retirement plan, which new personnel joined beginning in 1983.
Finance Director Steve Miller informed alderman of the need prior to the Dec. 3 council meeting, telling them such an appropriation would have to be made by Dec. 31.
No vocal opposition was offered, but there were immediate exchanges on how the contribution might be best derived — probably from reserve funds. Alderman Wayne Easterly was hesitant, saying, “This may be an emergency, but if we ever really get hit with something, we’re in a hole.”
Mayor Carl A. Redus Jr. stated his support for the contribution.
“Let’s do what we need to do for our public servants,” he said. “What’s important right now is that we take care of the (fire and police) pension funds.”
Miller said the contribution could be made in part with $155,000 in currently undesignated funds. He’s fearful that taking the entire amount from reserves could cause a temporary shortfall in April when the city will have to finance three payroll days in one month. He said the city would quickly recover with tax revenues, but when the shortage first “hits the paper,” the city’s image might be dented.
In the November general election, voters statewide rejected a proposed constitutional amendment that would have in part allowed the issuing of bonds by local governments to retire unfunded liabilities for the old pension plans. Also, voters would have had the option to approve a sales tax to pay off the bonds if the constitutional amendment had passed.
In Pine Bluff, local voters have already boosted the pensions by adopting millage increases up to the state maximum.
“I think the people of Pine Bluff are taking some good steps” in strengthening the pension funds with the millage hikes, said Joey Carreiro of Little Rock, an actuary for the Arkansas Fire and Police Pension Review Board. “Pine Bluff is on the right track to dig out of the situation, but there’s a long way to go.”
Carreiro said the city’s old police pension is “OK for the time being.”
“It’s not as well-funded as you would like it to be” since there are no longer contributing members, he said. “But it’s not projected to deplete its assets in a short period.”
Carreiro said several options on keeping the funds solvent are being considered and Miller’s request to the council was necessitated by “revisions” made in managing the funds.