Ft. Wright Increasingly Upset with Debt Associated with State Pension System
Thu, 02/02/2017 - 16:58 RCN Newsdesk
An independent review of the city's finances caused Ft. Wright Mayor Dave Hatter to lash out at the state government for having an underfunded pension system.
The City of Ft. Wright drew statewide attention when it sued the state retirement system for what the city characterized as bad investments.
On Wednesday night, city council listened to an audit report performed by W. Paul Maddox, CPA, which is different than the firm used before because Hatter believed the city had gone long enough with using the same firm.
"It is a clean opinion, no findings," said Maddox. "The balance is very strong, and there is no debt. The only problem is the net pension liability of $3.7 million. Last year it was just over $3 million, for the underfunded county retirement system."
That is what upset Hatter.
"It jumped nearly a million in a year," the mayor said. "For a city with a $5 million budget, that's incredible! We have 6,000 residents in this city, and that means they all owe about $624. The people in Frankfort stole the money and spent it on something else!"
Maddox went on to say that the city has about one and a half years of funds on hand. He told council that there are three pages in the report pertaining to the $3.7 million, and said it was an estimate, and if the state is, for instance, 1 percent off, the city could owe $3.2 million, and if they are off the other way, the city would owe $4.2 million.
Hatter went off again.
"We sued the Kentucky Retirement System," he said. "We have made all the payments we were supposed to make, but when you send it into the giant swirling toilet in Frankfort..." He trailed off. "We sued to get some transparency. This is utterly ridiculous!"
Hatter praised the previous mayor, Joe Nienaber, and city administrator Gary Huff, as well as council for getting the debt in the city from 98 percent to nothing. He said the city has been spending approximately $500,000 to $700,000 on roads and has raised a variety of taxes to try and be more aggressive with street repair.
"Four million dollars is a lot of streets fixed instead of turning it over to Frankfort to have it wasted," Hatter said. "There are a lot of people who have their retirement in jeopardy because of mismanagement. I think (Senator) Chris McDaniel and (Rep.) Diane St. Onge did great helping to get some transparency down there. Kentucky is the second worst underfunded retirement state."
Hatter said the city has no idea what the price will be next year, with the gigantic percentage increase this year. As council talked about it, the idea came up about possibly buying out the debt and getting out of the system. Hatter liked the idea, even though he said it probably would never be a reality, but he asked for ideas as to how to propose it to Frankfort. Councilman Bernie Wessels suggested writing a resolution, but said it had to be soon so they would have to have a special meeting to approve it and send it.
"A resolution is like a Hallmark card, but at least we could get it on record," Wessels said. He agreed that the system had to change to be able to let cities buy out of the debt and then manage their own retirement fund, but he said it couldn't hurt to ask.
In other business, council approved the second reading of an ordinance repealing sections of the snow ordinance and instituting other sections. Among the new rules are new hours to have a car off the street in a snow emergency. Before, the hours were 8 p.m. to 6 a.m., and now the hours are 10 p.m. to 6 a.m. In other words, if a snow emergency is declared at 10 p.m. or after, the resident has until nine the next morning to get their car off the street. If declared before 10 p.m., the resident has three hours to get their car off the street.
"I am not a big fan of a snow emergency, but it's something we have to do," said Hatter. "I will only do it when it is totally necessary. This is not meant to be punitive to our residents, it is to be more consistent."
Council also listened to a first reading of an ordinance to install three stop signs at Amsterdam Road and General Drive. The stop signs will have lights around them because there is a visibility issue in the area, and at least two of them will be solar powered. In addition, there will be signs announcing the presence of the stop signs so that drivers will be alerted to them. The warning signs will also be solar powered. This is a move to get out in front of the construction that is coming to Amsterdam Road, thanks to a grant the city received.
Another ordinance having a first reading cleared up the inconsistency on whether the city would replace sidewalks. Since the Kentucky League of Cities told Ft. Wright that it doesn't have a consistent policy, which left the city open to litigation, the city will now replace sidewalks as it resurfaces streets, and when there is appropriate funds. Residents who want the sidewalks replaced can do it themselves, and the city will pay for the concrete, but once the ordinance passes, the city will consistently replace the sidewalks if needed.
Council listened to a first reading of an ordinance banning people from standing in the middle of the street soliciting funds for any kind of charitable organization, due to safety concerns. However, there was no penalty involved, so for now, the first reading stands, and it will have to be read again once a penalty for not obeying the ordinance is included.
An executive order was passed establishing the holiday schedule for the year. Another executive order named Councilman Adam Feinauer as the city's representative to the Planning and Development Services (PDS) Council.
A resolution passed which allows the city to enter into an agreement with the KLC to be a certified city of ethics, a program where the city joins for $500 and KLC reviews city ordinances and vets the city's ethics issues as they may arise.
Another resolution allows the police department to apply for three grants worth a total of $18,000 to buy five new body armor vests, ten glock handguns, and ten tasers.
Discussion was held about the road repair list, and whether to include certain streets. The end result is that Eaton Drive was taken off the list, and Valley Plaza was put on, and the money for Kennedy Road was put on hold until the city knows whether the slippage problem on Ft. Henry Drive is worse and will cost more than the $40,000 the city received from state emergency road funds. Other streets on the list for repairs and/or resurfacing for this year are Reeves Drive, Mt. Vernon Drive, Kentucky Drive, Olivia Lane, portions of Werner Drive, and portions of Lorup Avenue.
Mayor Hatter told everyone that the audit findings and the ordinances will be up on the city website.
Written by Patricia A. Scheyer, RCN contributor
Photo: CPA Paul Maddox presents his findings to Ft. Wright City Council (RCN)