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Council reviews pension funding options as part of 2026 levy discussion
Summary
Staff presented police and fire pension funding history, showed gaps between state-minimum and actuarially recommended contributions, and recommended a modest increase (prior year plus $75,000 per fund) to reduce the gap while slightly lowering the tax rate due to EAV growth.
City finance staff told the council that public-safety pensions remain a large portion of the city’s property-tax levy and presented historical contributions, funding ratios and recommended options for 2026.
S2 said police and fire pension funds were about 53.17% and 51.79% funded respectively as of the last report and suggested several contribution options. He presented a recommended approach of prior-year contribution plus $75,000 to each fund: "What I'm proposing is we go with that, with our prior year contribution, plus the 75 to each of the police and fire pensions," S2 said, adding that the proposal would decrease the city’s tax rate from 2.387 to 2.35 because assessed valuation (EAV) rose.
Councilors discussed the tradeoff of reducing immediate levy rates versus placing more money into pension ARC targets to improve funded ratios. Staff noted the actuarial recommended contribution (ARC) is higher than the state-required minimum and that choosing the state minimum would move less money into pensions this year than adopted last year, potentially creating regression in funding progress.
No final levy vote was taken; staff said council must choose a path before the truth-in-taxation and levy deadlines this fall.
