In the midst of a contentious dispute over whether city employees should contribute more toward their own retirement, the Alexandria City Council appointed a new advisory group to study potential changes to the city’s pension fund. Alexandria’s economic outlook is sunnier than it’s been in recent years – this year marks the first time in three years officials aren’t facing a budget gap — but Alexandria’s pension investments have not recovered as rapidly, according to Bruce Johnson, the city’s chief financial officer.
Investments have been down for about four or five years, Johnson said, meaning officials must contribute more to the pension fund. The city manager’s budget proposes the city’s 2,600 or so employees help pay a share of that increase, though a smaller portion than the city’s, according to Johnson.
“Whether the city pays or the employee pays, we’re planning to put the same amount into the pension fund for fiscal 2012,” Johnson said. “So it doesn’t really affect the health of the pension fund. It’s really more a question of who pays.”
The 13-member advisory group, comprised of six city employees, six members of the public and Johnson, will meet over the summer and report back to city officials in October with ideas to keep the city’s pension fund solvent in the future.
It’s unlikely the board will have any effect on the City Council’s decisions regarding the current budget, but some employee representatives are already raising concerns during this year’s budget process.
Representatives from the police, fire and EMS departments were among the dozens who spoke out against the proposal at a public hearing last week, including Brenda D’Sylva, a fiscal analyst for the Alexandria Police Department who was appointed to the advisory group. What employees want to know, she said, is “Why are you asking us to pay more? Why do you keep putting us down?”
To mitigate some of the effects of the increased contributions, the budget would set aside $700,000 for pay raises to keep salaries competitive in the region. However, there will be no across-the-board pay raises for the fourth consecutive year.
“They need to make us whole before taking more away from us,” D’Sylva said.
City Council voted Saturday to advertise a 2.2 cent increase in property taxes, a move Councilman Rob Krupicka said should provide city officials greater flexibility in funding the budget and might help offset the cost of larger pension contributions, perhaps by removing the extra contribution or raising pay even more. At a minimum, city employees should not take home smaller paychecks than they did the year before, Krupicka said.
