FORT PIERCE — City commissioners discussed a plan to change current city employee retirement benefits to promote the city’s fiscal health and will present it to the city’s three union.
The current system allows pension payments to be averaged from an employee’s highest five years of salary, as long as they have worked for the city for at least 10 years. The proposed system would average the pension payments over eight years, which would lower the payout for each employee, including the commissioners.
Under the proposed plan, the system would be phased in for existing employees over three years. So, if someone is a year away from retiring, they would have a six-year average; and if someone is two years from retiring, they would have a seven-year average. The phase in is designed to make the transition easier for those close to retiring, Fort Pierce Finance Director Gloria Johnson said.
Nothing else would change for existing employees, and those already receiving pensions would not be affected.
Fort Pierce Mayor Linda Hudson said it’s becoming increasingly difficult to pay Fort Pierce’s bills because of its debt. As of last September, the city owed $86.7 million, according to an annual financial report.
The proposed move would save the city $583,863 annually, and reduce the burden on taxpayers, Johnson said.
“Adjustments need to be made just to make the status quo,” Johnson saidA substantial portion of the total debt is due to large, structural redevelopment projects, and Johnson said it’s much harder now than it was five years ago to pay the $5.6 million minimum annual payments because the city brings in less money from property taxes.
According to the same report, Fort Pierce residents paid a total of $15.9 million in 2008 but just $10.1 million last year in property tax.
“We’ve got to make up the ground somehow,” Johnson said.
The savings also would potentially free up some money for much-needed road projects, Fort Pierce Commissioner Thomas Perona said.
The commissioners still need to discuss the proposal with union representatives.
The proposal depends on union approval. Johnson said she’s not sure if the unions will agree with the plan but said everything is on the table for discussion.
The commissioners originally established a cost-cutting goal of $700,000, but other cuts to future employees’ pensions will be discussed to make up the difference at a later time, Hudson said.
Commissioner Rufus Alexander was skeptical of the move and said the cuts would hurt the city’s draw for employees.
“The young ladies we just hired, they wouldn’t have come here if they knew they were going to get bushwhacked,” he said. “Our employees are already among the lowest paid along the Treasure Coast.”
Commissioner Edward Becht said the commissioners may revisit pensions in the future to increase benefits when the economy is better off.