The Great Bend City Council Monday night rejected two options for bolstering uniformed first responders pensions council members feared were unsustainable using only the sales tax approved by voters in November and could lead to property tax hikes. Instead, they opted for using the sales tax money to create an in-house profit-sharing plan for firefighters and police officers.
On the table were three options, said Mayor Cody Schmidt. These included: Switching to Kansas Police and Fire through the Kansas Public Employment Retirement System; augment current Mission Square money purchase plan; or create the new Mission Square profit-sharing plan.
Currently, the city provides a 401K retirement plan for all employees, including police officers and firefighters, through Mission Square since the city is not a part of KPERS.
The first two failed to even muster a motion when presented by Schmidt. Not only was there a motion for the third choice, but it passed unanimously.
“I’m not in favor of any program that could increase property taxes,” Ward 1 Councilman Alan Moeder said. “The citizens Great Bend voted for the .2% sales tax, but they didn’t approve a property tax increase.”
The KP&F was passionately endorsed by emergency personnel. They said it would make the departments more competitive and help eliminate the rapid turnover that plagues both. It also offers a guaranteed pension for retirees, something not addressed by Mission Square.
In fact, it was standing room only in the council chamber with most of the crowd made up of first responders.
However, projections from the City Clerk’s Office show that costs will exceed sales tax revenues in 2033 by about $36.000 (requiring a mill levy increase of .35 mills), a number that will increase to over $6 million by 2043 (requiring an additional 60.82 mills).
By augmenting the current plan by raising the city’s contribution to a maximum of 17.5%, projections show that costs will exceed sales tax revenues by 2069 by just over $651.98 (6.33 mills). By 2076, the shortage will be nearly $13 million (125 mills).
If the contribution is raised to 22%, projections show that costs will exceed sales tax revenues by 2067 by over $118,939 (1.15 mills). By 2076, the shortage will be nearly $16 million (155 mills).
“I agree with Alan on this in the sense that I wouldn’t want anything that creates a future liability,” Ward 3 Councilman Cory Urban said. “I do however, want every dollar of the sales tax evenly distributed in the plan that we decide on.”
The new tax comes to 20 cents on every $100 spent, raising an estimated $755,000 each year with no sunset.
Under the profit-sharing option, the city would equally divide annual sales tax receipts among uniformed police and fire employees, based on an as-yet-to-be-determine formula.
There were other concerns amongst the council about options one and two.
“We have heard over and over from emergency personnel that going with KP&F will solve their hiring issues,” Ward 2 Councilwoman Jolene Biggs said. “But when you go to the websites for cities that are currently under the KP&F plan they, too, are looking for employees. So I do not believe that going with KP&F will solve the hiring issues like we have been told.”
Also, once the city signs up for KP&F, it is locked into that for good, she said.
“The Mission Square profit sharing plan has investment flexibility, and you can adjust or leave the plan at any time,” Biggs said. “This plan would use the sales tax collected each year to go into the plan. So it would not become underfunded for the life of the plan.”
She said she’s heard from many citizens in reference to this issue. ”And overwhelmingly once the taxpayer understands it will affect the property tax, they ask that I do not vote for this plan. They say they cannot afford for their property taxes to be increased.”
“First of all, I want to say that I offer the firefighters and policemen having a good pension plan,” said Ward 4 Councilwoman Natalie Towns. But, she saw the size of the city’s contribution into the KP&F and augmented Mission Square plans as being way to high, especially compared to the private sector.
She also didn’t like having another entity, like KP&F, telling the city what it can and can’t do for its employees. “Once they tell you what you’ve got to do, you’re locked into it, you’ve got to go with that. And so they’ve got us over a barrel.”
“In the three options tonight, the KP&F is the only cut-and-dried option,” City Administrator Kendal Francis said. But, with the profit-sharing, “there are a lot of decisions to be made as far as the mechanics.”
He will come back at a future meeting with more details and he recommended at that time the council form a committee to formulate the specifics.
“It’s not what we were looking for,” said Deputy Fire Chief Brent Smith, noting they were hoping for the KP&F plan. “But, we will make it work. We will make the future look great for “Great Bend.”
Police Chief Steve Haulmark said the appreciated the council even taking the time to study the matter and thanked them for their efforts. The members spent a lot of time on the issue, looking at all sides.
Great Bend City Council meeting at a glance
Here is a quick look at what the Great Bend City Council did Monday night:
• Approved moving forward with a profit sharing-style system for Police and Fire department retirement plans.
Great Bend voters last November approved a .20% sales tax increase to fund improvements to the retirement for uniformed police and fire personnel. Three options were presented for consideration: Kansas Police and Fire through the Kansas Public Employment Retirement System; augment current Mission Square money purchase plan; or create new Mission Square profit-sharing plan, said City Administrator Kendal Francis.
• Approved an ordinance establishing a master fee schedule.
Administration and departments of the city proposed moving most of the city’s fees and charges into a master Fee schedule resolution that
would put the fees on one place and subject to amendment by resolution. This way they can all be adjusted at once rather than individually.
The ordinance creates a new code section that authorizes the setting of fees by a master fee schedule resolution.
At the next meeting, a resolution can be passed setting the new fees and then another ordinance can be passed repealing the current fees, City Attorney Allen Glendenning said.
• Approved a bid for a skidsteer loader from White Star for $54,044.06 for the Water Department.
The department looking to replace a 1996 Gehl Skid Steer with 2,230 hours and received three bids from KanEquip, White Star and John Deere. John Deere is the local bid and is within 5%, yet the White Star bid is the lowest bid at $54,044.06, said Public Works Director Jason Cauley.
Public Works already has two Bobcat skid steers from White Star with attachments that can be shared across the departments, thus producing savings for future purchases.
All bidders have given us trade-in values, but White Star gave the largest trade-in value at $10,500. Expected delivery time is approximately six to nine months.
• Approved a bid for a backhoe from John Deere for $101,772 for the Water Department.
The department looking to replace a 2002 John Deere 310 SG with 3,992 hours. They have received three bids from KanEquip, Foley, and
John Deere, said Public Works Director Jason Cauley.
John Deere was the preferred bid. The Caterpillar bid from Foley, though lower, is for a smaller machine and Cat at does not make a machine comparable.
The smaller machine it is not able to support or carry the weight that is needed, Cauley said.
All dealers have given us $20,000 for trade-in value for the current tractor. The trade-in value is contingent on the condition of the tractor at time of delivery of the new backhoe and not to exceed 600 hours of additional use.
Expected delivery time is approximately six to nine months.
• Heard a report from City Administrator Kendal Francis. He focused on the new sales taxes that take effect April 1.
• Heard a report from Great Bend Economic Development Inc. President Sara Hayden. She focused on the loft grant program.
The first recipient is B&H Enterprises which owns the old Masonic Lodge building on Lakin. They will receive $85,250 to renovated the upstairs into a commercial space.
• Announced the community members of the Quality of Life Committee, picked randomly from 24 applicants. They include Bruce Swob, Sharon King, Debbie Munz, Stephen Patton, Curtis Arnberger and Kate Wary. Alternate members include Randy Goering and Kaylean Weber.
The six will join Ward 3 Councilman Cory Urban, Ward 1 Councilwoman Lindsey Krom-Craven, Ward 2 Councilwoman Jolene Biggs, City Administrator Kendal Francis, Public Lands Director Scott Keeler and Great Bend Recreation Commission Assistant Director Chris Umphres.
• Approved abatements for trash and refuse violations at: 1701 Morton St., WHB Inc.; 1911 Jackson St., Heather Mclemore; 1036 Madison St., Moses Properties LLC.; 1443 Lakin Ave., Logan and Brenna Marshall; 1036 Jefferson St., Michelle Grigsby; 300 Elm St., Josefina and Eusebio Leyva; 2304 McCormick St., Juan David Mendez and Rangel and Elizabeth Ruiz; and 808 Stone St., Thomas Pearson.