In the November general election, Great Bend voters approved a .20% sales tax to bolster police and fire first responders’ pension plans. On Monday, March 7, the Great Bend City Council is set to vote on which plan the city will go with in what could be an emotionally charged meeting.

When the council approved the sales tax question, it had not determined which route it wanted to take. Officials just knew something had to change to make the Great Bend Police and Fire departments more competitive.

“Our goal is to provide a system where they can retire at an appropriate age and be covered for the rest of their lives,” City Administrator Kendal Francis said, addressing the matter at Kendal’s Koffee last October. “The City Council still has some difficult decisions to make.”

Since the election, the council has held multiple work sessions on how to best restructure the retirements for the safety personnel. There have been passionate appeals and heated debates.

Now, there are three options on the table. Below is a synopsis of these options based on information from the city.

Kansas Police and Fire 

The KP&F system falls under the Kansas Public Employee Retirement System (KPERS).

Currently, the city provides a 401K retirement plan for all employees, including police officers and firefighters, through Mission Square (more this later). However, first responder retirement needs are unique, with more limitations on how long they can work.

Police officers and firefighters say KP&F 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.

This is passionately supported by officers and firefighters who see it as offering a better post-service lifestyle and a recruitment tool. A large number of safety staff have been present and vocal at the sessions and during council meetings. Several offered emotional testimony in favor of the change.

But some city officials and City Council members expressed worries about the long-term viability of KP&F and its cost to the city. They noted that when the cost of KP&F exceeds the sales tax revenues, a property tax increase would be needed.

They were also concerned about what would happen if an employee leaves before being fully vested and is not eligible for KP&F benefits. The city pays into the trust fund, but would not be refunded any of that money.

The new tax comes to 20 cents on every $100 spent, raising an estimated $755,000 each year with no sunset.

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). 

These numbers are based on sale tax revenue projections that continue to improve over time. And, they factor the current city valuation.

Under this system:

• All new uniformed police and fire employees will be enrolled in KP&F.

• All current uniformed Police and Fire Department employees aged 34 and younger will be required to switch to KP&F.

• Employees aged 35 and older will be allowed to chose KP&F or Mission Square. This will be a one-time decision and no changes will be allowed after Jan. 1, 2023.

• The city will fund contributions, for employees who elect to remain on Mission Square, at the current KP&F rate of 22.86%. That percentage will be locked in for the remainder of the employee’s service, regardless of KP&F contribution changes.

• Employees electing to stay on Mission Square will be required to match KP&F’s employee contribution of 7.15%.

• Contributions for employees who choose to stay on Mission Square will be calculated based on base salary only, per Mission Square guidelines.

• If an employee quits before being vested (15 years), the city’s contribution stays with the KP&F system.

The city can still go with KP&F for first responders. But, it would be exclusively for them (it would not cover GBPD or GBFD office staff), and once the change is made, there is no going back.

The remainder of the city staff would stay with Mission Square. 

Mission Square

The present plans are with Mission Square Retirement, a non-profit corporation providing public sector retirement plans. The city is not a part of the KPERS.

With this, the city would use the sales tax revenue to augment first responder Mission Square benefits beginning Jan. 1, 2023.

The other details include:

• Option one: Increase city 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).

• Option two: Increase City contribution to a maximum of 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).

• These proposals are designed to be tiered approaches that would allow employees to contribute at a rate which best fits their financial situation.

• For each option, the city’s minimum contribution would be increased from the current 9.5% to 10%.

• Then for each .5% increase in employee contribution above the current 4.5%, the city’s contribution will increase as well.

• If an employee quits before being vested, the city’s contribution is returned to a city-held forfeiture account to be redistributed.

The council could consider raising the vesting requirement for public safety employees to better align with KP&F’s vesting requirements.

Profit sharing plan

The third option is for the city to create a profit sharing plan through Mission Square with the sales tax dollars.

This new plan would equally divide annual sales tax receipts among uniformed police and fire employees, based on a formula:

• $10,000 divided in 26 equal installments.

• At the end of the year, all remaining sales tax proceeds will be equally divided and distributed in a one-time final distribution.

• This plan would be in addition to the existing Mission Square plan. It will not cover increased costs for the plan resulting from annual salary adjustments.

• Plan ensures there will not be any future funding that has tot be offset with property taxes.

• As this would be a completely new plan, the council would choose employee vestment period and what happens to city contributions for employees who terminate before becoming vested.

• In addition to options two and three, the council may also choose to provide a Long-term Disability Insurance plan.

With options two and three, Francis said the council has some flexibility. They would require additional discussion and decisions.

However, with the KP&F, “it is pretty cut and dried,” he said. There would be very options for the council.