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With Increased Pension Costs on Horizon, Taylor Mill to Join Ft. Wright in Lawsuit

Add Taylor Mill to the list of Northern Kentucky cities faced with a daunting increase in pension contributions.

The city can also be added to the list of cities in the region that may turn to a tax increase to offset the costs.

As the Commonwealth of Kentucky prepares to deal with a drastically underfunded pension system, the cost burden on cities in the state is expected to be substantial. Taylor Mill city administrator Jill Bailey told the city commission last week that the city could pay roughly $275,000 more than usual over the next two years.

Municipal leaders across the state are upset that the state system seems to be the drag, as cities have faithfully made their payments to the retirement fund for their employees.

Mayor Dan Bell explained that the Kentucky Retirement System (KRS) is only for the state employees and CERS is for County and city employees. Since the creation of both systems, governments were required by law to pay a certain amount into their particular system, which the cities and counties have been faithfully doing.

"It's called an inviolable contract," said Bell. "It used to be that about seven employees would be contributing for one retiree, but now it is two employees contributing for one retiree."

The problem came, according to Bell, when the state made bad investments with its retirement fund, and allegedly used some of the money for other costs, which has left the state retirement system at just 16 percent funded, making it the second-worst funded retirement system in the country, behind Illinois.

Not only is it underfunded, according to Bell, but since the two systems are connected, monies from the CERS, which is approximately 62 percent funded, are allegedly being used to help out the KRS, which could be illegal. The City of Ft. Wright currently has a class action lawsuit against the state that would force KRS to refund CERS. Wednesday evening, the Taylor Mill city commission voted unanimously to join the City of Ft. Wright in that lawsuit, and Mayor Bell promised to encourage other cities to join the suit at Saturday's Kenton County Mayors Group meeting.

Bell explained that Governor Matt Bevin will likely call for a special session of the legislature where the pension crisis is expected to be addressed, but no date has been set. Because of this uncertainty, cities and counties are left in the position of believing they are going to be saddled with this huge debt that they have no way of paying for except to pass it on to their citizens in the form of taxes.

So when Bailey brought up the subject of the tax rate, she told the commissioners that they could take a compensating rate, which would be .4640 per $100 of assessed value, or the compensating rate plus 1, plus 2, plus 3 or plus 4 percent, all of which would require a public hearing. She told commissioners that their personal property of .750 per $100 of assessed value is already the highest rate they can take, so it will stay the same.

Bailey asked the commissioners for their input and said they would set up a public hearing for compensating plus 4. She also said they have to set the waste collection fee, which will probably go up from $145 to $175 per year for each household, since the cost from Rumpke has gone up and the city passes that cost on, but no final decision was made.

Other notes:

Commissioners passed two resolutions, one recognizing Specialist Timothy Bailey and the other recognizing administrative assistant Sandy Meyer on their retirements.

Commissioners discussed what to do with several streets that desperately need work. City engineer Mark Brueggemann stressed that Valleyview and Primrose are the worst and something has to be done. It was discussed that the city might put a thin overlay on those two streets to get them through the winter and revisit the issue in the spring. Curbs were also discussed. The other streets on the north end of town will be resurfaced in the spring after SD-1 and the Water District finish their work.

Rich Meyer has resigned from the Board of Adjustments, and the city would like people to submit letters of interest, since they will now have three vacancies on the board.

Police Chief Steve Knauf told the commission that he has rehired Ken Holstein for the police force.

It was announced that the city will hold its 60th anniversary party in the park on October 20 from 5 to 10:30 p.m., and there will be music by Mudpies, and Derek Allen Band, plus food trucks, kid-friendly activities, and fireworks.

Written by Patricia A. Scheyer, RCN contributor