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Council hears options for pension contributions, levy trade-offs
Summary
Staff reviewed pension funding history and options, saying the police and fire pension funds are now just over 50% funded and presenting levy options that would increase the property-tax levy to meet actuarial recommendations or hold rates steady while using other revenues.
Finance staff reviewed the city's police and fire pension funding status and three levy options the council could consider for FY2025. The presentations noted that both funds are slightly over 50% funded (police 50.23%; fire 50.15%) and explained the difference between the state minimum, the median contribution the city has recently budgeted, and the actuarially required contribution (ARC). The staff said meeting the ARC would require a materially larger levy; staff presented a scenario that keeps the city rate at roughly 2.44¢ while directing an additional roughly $300,000 to pensions through assessed-value growth rather than a rate increase.
Robert Hanson and Jen O'Hearn emphasized consequences: increasing pension levies to the median or ARC would trigger truth-in-taxation steps and shift resources away from general-fund operations—staff estimated a roughly $177,000 net reduction to general-fund allocations under one scenario. Council members asked for more detail about long-term forecasts and whether different mixes of levy and general-fund transfers could achieve the desired actuarial progress while limiting immediate property-tax impacts.
