Raleigh council debates funding separation allowance for firefighters, weighing raises vs. long‑term liability

City of Raleigh budget staff presented actuarial estimates for a proposed separation allowance for firefighters and several other operating departments, prompting a multihour council discussion about trade‑offs between one‑time salary increases and a long‑term benefit.

Sadia Sitar, Budget and Management Services, told the council the separation allowance is “a temporary benefit payable at retirement till the age of 62” and said the actuarial work showed an unfunded amount and an annual cost to reach full funding. She said the consultant’s data put the total actuarial cost shown on the slide at about $9,726,000 and that roughly 48% — about $4.6 million — would be attributable to Raleigh Fire. Sitar also noted a larger liability figure referenced during the discussion: “you take that, that $32,000,000 and there’s a plan to pay it back over 20 years,” a finance staff member said during the meeting.

Council members disagreed on how to proceed. Council member Harrison and others suggested using portions of the compensation‑study allocation already in the proposed budget to fund separation allowance, or proposing a small dedicated tax increase (referred to informally as “a penny for public safety”). Opposing council members urged caution about adding an other‑post‑employment liability, noting the city’s existing long‑term liabilities and the uncertainty of investment returns.

Finance staff and the council clarified funding mechanics. Jennifer Stevens, Finance, explained the city generally funds long‑term liabilities on an actuarial basis rather than strictly pay‑as‑you‑go and said that approach is “highly recommended.” Ryan (finance staff) summarized how an actuarial funding plan would first pay the annual normal cost then amortize the preexisting liability over a multi‑year schedule.

Councilors asked for specific, comparable figures before any policy decision: the percent salary increase that would remain for firefighters if part of the compensation pool were redirected to separation allowance; the monthly impact cited in the packet (an 11% salary increase would be about $700 a month before taxes for an average firefighter); and how much separation allowance funding would reduce that monthly increase. Multiple council members asked staff to conduct a department‑wide, impartial “flash poll” of firefighters (administered by HR) so that employee preferences between immediate pay and a retirement‑era benefit could inform the decision.

No motion or formal vote was taken. Council directed staff to provide the requested calculations and to prepare materials for the next budget work session so members could weigh (1) using compensation funds, (2) a small property‑tax increase, or (3) another funding approach. Mayor Pro Tem Ford, who sponsored the budget note that prompted the actuarial review, joined several colleagues in asking that staff also clarify whether other operating departments would be included if council chose to adopt separation allowance citywide.

Councilors repeatedly emphasized that any decision would create a continuing liability. As one council member summarized, “this is in perpetuity,” and would affect future budgets and recruitment if not coordinated with multi‑year compensation planning.

The council did not adopt a policy or appropriation at the session; staff will return with the requested math, an HR‑administered employee poll for firefighters, and a recommended path for whether to treat only fire or include other operating departments.