The City of Berea is the latest of dozens of municipalities to join with the Kentucky League of Cities in an effort to separate the County Employee Retirement System (CERS) from the state pension systems.
CERS is better funded than the Kentucky Employee Retirement System (KERS) as a whole, with CERS being 62 percent funded, and KERS and the state police Retirement System combined being funded at 24 percent, according to KLC.
KERS is the worst funded system in the nation, according to the resolution passed Tuesday by the Berea City Council. The resolution supports the separation of the county system. A bill to separate CERS, sponsored by Sen. Joe Bowen, will be addressed if Gov. Matt Bevin calls a special session later this year to deal with the state’s pension crisis, according to the KLC.
According to the resolution, 73 percent of KERS assets are CERS assets.
The separation would be contrary to the recommendation by the consultant group who gave recommendations earlier this year on revamping the state pension systems. The Philadelphia-based PFM Group suggested that city and county workers should not be allowed to leave KERS.
Before the vote on the resolution, council member Jerry Little asked what the benefit to the city would be if CERS were separated.
City administrator Randy Stone said city employees’ retirement funds would be better protected, as local municipalities have paid their share of the retirement fund.
“We as cities and counties do not have the opportunity to not fund,” he said. “We’re paying about 18 percent (right now). Employees pay 5 percent. This puts us on much better footing.”
The approval of the resolution was anonymous.
Council member Bruce Fraley said he recommends all council members vote for the separation.
“Separating it out protects our city employees’ retirement benefits,” Fraley said. “Leaving it in puts it at more risk. I would encourage everyone to vote in favor of it. There are numerous city and county governments across the state who have adopted this resolution.”
• • •
The council again spent a considerable portion of its meeting Tuesday discussing its electric power. The council voted at its last meeting to get out of any contracts with Kentucky Municipal Energy Association, which the council had previously chosen to provide transmission for the city’s electric, and also chosen to buy 10 megawatts of capacity from.
Council member Jerry Little asked what the status of the contracts with KyMEA was, and mayor Steve Connelly said he was working with “due administrative diligence.”
Connelly said he has several things he plans to do before terminating the contract, including receiving comment from American Municipal Power (AMP) about its willingness to act as transmission agent for Berea, as well as its opinion on the costs in exiting the KyMEA contract. Connelly said he also needs to look into the cost of entering into an additional contract with AMP for transmission of the power. He also plans to find out whether AMP still believes, as it told the city previously, that KyMEA is “a viable transmission path.”
Another thing that must be accomplished, Connelly said, is seeking a legal opinion on the legal ramifications of pulling out of the KyMEA contract. Finally, the staff of the city’s utility department needs to detail the steps required for the city to pull out of the contract.
• • •
In other business:
• The council recognized two crew members of the city’s utility department for going to Florida and helping restore electricity after Hurricane Irma. Dustin Barnett and Damien Isaacs spent 12 days in the state, and restored power to between 1,200 and 1,500 homes, utilities director Ed Fortney said. The two men worked 16-hour days while there, Fortney said.
• Connelly read a proclamation declaring October National Disability Awareness Month. The mayor also read a proclamation declaring the month Industry Appreciation Month.
• Reappointed board of adjustment board member Denise Hagen-Rubin to the board for another term.
• Awarded a bid to provide self-contained breathing apparatus for the city fire department to 911 fleet, which was the lower of two bidders at $30,510.
• Stone told the council he will likely have a change order on the city operations center department to present to the council at its next meeting. The change order should be the last for the project, and will include a change in the cost for the parking lot. The cost came in at $102,000, less than anticipated, Stone said.
Reach Kelly McKinney at 624-6626; follow her on Twitter @kellymckinney18.