Fire pension discussed by City Council
During the Blue Earth City Council work session last Monday, council members explored the possibility of a $12,000 cut to the city budget by cutting a donation to the pension plan of the city’s fire and rescue department relief association. The city has been making regular contributions to the relief association for several decades.
Mayor Richard Scholtes stressed the importance of trimming the city budget to under 3.5 percent by eliminating some of the city’s discretionary spending which is not required by the state. While addressing the fire pension board, Scholtes cited additional state funding would help offset the proposed cuts.
“Your fund is doing well enough without the $12,000 contribution because your retirement is fixed,” Scholtes said. “If I set your retirement plan today at $3,000 for every year served, whether we put in $12,000 or not, you’re still going to get $3,000.
“When I’m trying to cut a budget, it’s not that I’m saying your money is not good to invest, it’s hard to explain to the taxpayers when I’m pushing them for more money out of their pocket,” Scholtes added.
Meanwhile, Chris Mathews spoke on behalf of the Blue Earth Fire and Rescue Relief Association. He argued the city contribution of $12,000 per year is relatively low. Further, Mathews believes budget cuts could have a negative impact on retention and recruitment of personnel, as well as create larger payments for the association in the future.
“We appreciate the contribution because we realize you are not obligated to give this to us,” Mathews explained. “However, the guys do pay it back, they put in over 1,000 hours a year.”
Statewide, 55.3 percent of relief associations received a contribution from their city in 2015. The average amount of funds contributed for that year totaled out to $18,487. Based on population ratio, the per person statewide average for each contributing city came out to $5.14. By comparison, the $12,000 contribution to the Blue Earth Fire and Rescue Relief Association averaged out to $3.74 per citizen.
Councilman John Huisman used his own personal experience with public pensions to argue against the proposed budget cuts. Even though the proposed cuts may only be temporary, Huisman believes recouping those lost funds may leave the fire and rescue relief association facing an uphill battle.
“I want to see the $12,000 stay in there because I don’t want you guys to fall behind like my retirement program, and now we’re fighting to get those dollars back,” Huisman stated. “I want to see that money cut from somewhere else.”
While no action was taken during the session, the council indicated it would look for alternative means to cut back on other discretionary spending. The possibility of limiting upgrades on recreational venues such as the public swimming pool will be further examined by the council.