In BC, monuments come before employees, people
Blog: Between The Lines
It's not just Bossier City employees who find the city's
staggering debt load forestalling their abilities to receive pay raises;
retired Bossier City firefighters face the same hurdle with paying for their
health insurance.
Last week, the city approved a budget
without a cost-of-living pay raise to employees, but did use one-time money to
provide a bonus, costing about $2 million. A downturn in revenues, mainly from reduced
sales tax collections, not only prevented locking in higher pay but also forced
the city to dip into other funds that normally paid for capital expenses to
shore up the budget. Also hampering this was continuing to siphon general fund
dollars, around $4 million, to pay down a high amount of debt.
But money that would have been available for
raises eaten away by debt servicing also could have gone to maintain the city's
subsidization of retired firefighters' health insurance. A recent television
news story brought to light that several years ago the city halted this,
forcing retirees to pick up the entire tab. Louisiana state government picks up
a portion that grows the more years a retiree worked for the state, and local
governments do the same for the most part. By way of example, twenty years of
service for a state employee usually means the retiree pays just a quarter of
the monthly premium.
However, not in Bossier City and only excluding
firefighters since 2018, according to the city's comprehensive annual financial
reports it must file with the state. The 2017
version, as had those in previous years, when referring to the city's
obligations to retirees concerning postemployment benefits mentions that employees
in the Municipal Employees' Retirement System, the Municipal Police Employees
Retirement System, and Firefighters Retirement System receive medical and
dental benefits as members of the systems into which the city must pay, with
the individual plans determining rates.
For that year, the city paid out about $900,000
for employee premiums and almost $600,000 for retiree premiums. Yet it also
coughed up $1.7 million additionally because of decades of chronic lowballing
on past contributions required by the systems to its member governments, to
reduce the resulting unfunded accrued liability.
For Bossier City, that had begun in 1980, when a
state law kicked in allowing local governments to delegate their pension responsibilities
to FRS. The city for decades had its own Firemen's Pension Fund that handled
this, but with the switch it phased out participation in its own system, with
new hires going into FRS. Still, the city had to continue funding FPF to ensure
fully funded pensions through the life of every participant or eligible family
member, but it also underfunded that which ensured after ceasing to enroll new
members it still had to make an additional contribution annually. Money for the
unfunded FPF contribution that affected both pensions and postemployment
benefits, which in 2017 amounted to just over $200,000, until a few years ago came
from a 1982 half-cent sales tax, and the state's refund of fire insurance
premiums if the city scored well enough in fire protection coverage, which in
2017 amounted to just under $300,000. That year, the total FPF cost came to
$4.359 million.
This all changed in 2018.
That year, it was determined that the amount of money then in the FPF, which
ended up at over $73 million, was enough actuarially to meet all future
obligations after an additional payment of about $1 million. Since then, the
city has paid nothing into that, freeing up general fund dollars that previously
it had shoveled into the FPF which through 2015 had amounted to over $6 million
annually. This came years after the freeing of the 1982 half-cent sales tax
from this obligation, which now goes into the general fund but earmarked for
salaries of city employees that could serve as a basis for pay raises.
Whether coincidental, the 2018 CAFR also reported
that employees in FRS no longer counted as an obligation, negating the city's
necessity of paying firefighter retiree health care premiums. How this decision
came about is unclear from city records on the Internet. In this period City
Council minutes reveal no ordinances or resolutions that withdrew the city's
participation, nor do FRS meeting minutes shed any light on the city stopping
its contribution.
Regardless, it had an impact on retirees, who
until retiring have their health care insurance premiums footed entirely by the
city. Last week, a news story featured former assistant chief Steven Anderson, a 27-year
veteran. He reported the city contribution stopped for him in 2019, which raised
his premium hundreds of dollars monthly and this year paid about $1,500 every
month.
Using the 2017 figure without any adjustment for premium
inflation and assuming firefighters' portion comprised 29 percent of that, the
city has an extra $167,000 available by not paying its portion of the premiums.
That amount seems small compared to the several million now not paid into the
FRF – which the CAFR for 2022
reports has over $57 million despite losing $7 million in investments that is an
estimated $3 million over the amount needed to service the existing 33 retirees
and beneficiaries for their covered lifetimes – and the over $500,000 in fire
insurance rebates also not going to the FRF, pocketed by the city for other
continuing expenses.
In short, the city easily could have kept paying
for retired firefighters' health care insurance premiums, at the very least by continuing
to divert the rebate, if not by apportioning a trickle of the funds saved by
zeroing out previously-mandated contributions. It didn't in the face of nearly
$450 million in debt, just under half not related to water and sewerage enterprise
operations on which $9 million was paid in interest alone, fueled by the $77
million and counting splurged on the Walter O. Bigby Carriageway, a road halfway
to nowhere that only halfway creates a north-south corridor from Barksdale
Boulevard to Interstate 220, celebrated on route by a $350,000 statue with
long-serving current City Council members' names carved into it. This provides
another demonstration of where their priorities lie – with monuments to themselves,
not to the people who served the city or whose tax dollars they misused.
