Columbia mayor proposes new plan to hire public safety officers
The mayor of Columbia outlined a new plan to hire three more public safety officers. It doesn’t involve raising taxes, like the proposed raise on property tax on the November ballot, but by paying off millions of dollars of debt in the city’s police and fire pension fund.
Mayor Bob McDavid said the debt for the two funds grew from $11 million ten years ago to more than $82 million in “unfunded actuarial accrued liabilities.”
“One of the things that frustrated me when I first took office is, what’s going on here?” Mayor Bob McDavid told ABC 17 News. “How did we let this debt get so big?”
McDavid said the city must make an annual required contribution to that debt each year. In 2014, the city paid $4.8 million – the minimum amount required. He proposed at Monday’s Columbia City Council meeting the city begin paying $5 million towards the debt of the two pension funds. By paying a slightly higher amount, McDavid said, the city can begin lowering the interest rate on the debt, which currently stands at 7.5 percent. McDavid said the money would come from the city’s General Fund reserves.
“So this is money that’s sitting in an account, not making any interest,” McDavid said. “And we can take it, and put it into another account that’s costing us a lot. And that’s how we get a positive 300,000 dollars a year, just by making that switch.”
The $300,000 could then be used to pay for three police officers or firefighters, McDavid said.
The city’s report on the two funds presented at the Monday meeting said the city would begin seeing a positive inflow of cash by the third year of paying $5 million towards the pension funds’ debt.
Many state pensions plans suffered in the economic downturn in 2008 and 2009, according to an audit by the Missouri State Auditor Thomas Schweich of the 89 public pension plans in the state. Schweich listed the Columbia Police and Fire Pension Funds as two on his “watch list” of particularly troubling funds.
City leaders can discuss the potential repayment change in its fiscal year 2016 budget talks.
