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Lexington mayor at odds with police over pension bill

Lexington Mayor Jim Gray

Lexington Mayor Jim Gray

By Jack Brammer – jbrammer@herald-leader.com

FRANKFORT — Lexington Mayor Jim Gray faces a showdown with Lexington police — key backers of his campaign to oust former Mayor Jim Newberry — over a costly proposal to sweeten their pension benefits.

The state legislature is considering a bill that would require the city to pay full health coverage for spouses and dependent children of retired Lexington police officers and firefighters.

The change would cost the city an estimated $2 million to $3 million a year, although the legislature has not yet done an actuarial evaluation of the bill to determine its cost, said Geoff Reed, a senior advisor to Gray.

“If it should become law, that would mean significant cuts in our budget,” Reed said. “That could mean such things as fewer police officers and firefighters. We do not want that.”

Currently, only retirees’ health insurance premiums are covered by the city. The bill would affect the families of more than 900 retirees.

Lexington is the only city in Kentucky whose police and firefighters have their own pension fund. Although the city funds the program, which already has an unfunded liability of $225 million, state legislative approval is required to make changes.

Police and firefighters in other Kentucky communities are covered by a pension fund within the Kentucky Retirement Systems. It pays for health insurance for the spouses of police and firefighters who served 20 years and were hired before July 2003.

Two officials with Fraternal Order of Police Lodge 4 in Lexington — legislative chairman Robert Sarrantonio and president Mike Sweeney — testified Tuesday on behalf of Senate Bill 136, sponsored by Tom Buford, R-Nicholasville.

They acknowledged that the city has financial problems but contended that police and firefighters were ignored when financial times were rosy. Police are never off the job and believe they deserve family health coverage when they retire, Sarrantonio told members of the Senate Banking and Insurance Committee on Tuesday.

Sweeney noted that some Lexington police officers have been retired for 15 to 30 years and must use much of their pension to pay for family health insurance.

The city’s financial problems, he said, are “not my problem, not my concern.”

Sweeney said he was disappointed that no one from Lexington Professional Firefighters Local 526 was present. Efforts to reach local president Chris Bartley, for comment were not successful.

Although Gray remains “strongly committed” to fulfilling the city’s obligations to police officers and firefighters, “we have to face facts,” said Richard Moloney, chief administrative officer of the Lexington-Fayette Urban County Government.

“Lexington’s pension benefits for our police and firefighter friends are already more generous than any in the state,” Maloney told lawmakers.

Moloney said the city faces a budget shortfall between $11 million and $16 million this year. He also noted that city has contributed more than $100 million in borrowed money to the fund in recent years.

The committee, chaired by Buford, did not vote on the bill Tuesday, but Buford said there are enough votes to advance the measure to the full Senate.

He suggested the different parties try to work out a compromise before his committee revisits the issue. For example, he said they might consider “gradual” changes, such as allowing health coverage for retirees’ spouses and not their dependent children.

Sen. Julie Denton, R-Louisville, suggested that the legislature allow the city to negotiate pension benefits in their collective bargaining sessions with police and firefighters.

Current state law does not allow such negotiations. “Any change in our pension must come through the legislature,” Sarrantonio said.

Filed Under: Jim GrayKY General AssemblyLexington Government

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Comments

  1. Mike says:

    Why not just stick with the rules that were in place while the police officers and firefighters were working there? Come on! Where in private industry could a person’s retirement be “upgraded” after they retire? In the job I work, I know what benefits I will receive. I have accepted those terms; I won’t expect more than what I was promised after I leave.

  2. Ron says:

    Mike, just exactly what do you do? I dare to say that you probably make a heck of a lot more than a police officer and I would also suppose that what you do is not as dangerous. The politicians have neglected to pay their fair share into the pension system for decades. If they had paid their share of money into the pension, the current situation would not exist.

  3. Matt says:

    Lexington has paid their fair share into the pension. It’s the State legislature that underfunds the state employee’s pension plan.

    The city’s pension is underfunded now because of the financial collapse of 2008. Which is my problem with pensions. There’s no way to plan for how much a pension is going to cost us in the future.

  4. HOWARD says:

    Matt, you must be refering to another Lexington. Lexington, KY elected leaders have neglected to pay their share into the Police & Fire Pension fund for numerous years, which has resulted in the current unfunded liability. I’m willing to bet that every owed cent has always been taken from the employees check every two weeks.

  5. citizen says:

    Seems like a sweet deal for all city employees. This is an occupation like others, a choice was made to enter into this line of work no one was forced to do this job.Police and Fire protection affords no special status as this is a free choice that is made and it is part of the job whatever it entails. My factory affords me no extra or even a 20 year retirement to begin with and my occupation is a hazard as well.Why is it that Fire fighters and police officers are so overweight and special? is it because of underfunded police and fire protection fund? I think not, Mike makes a good argument.Lets just give the money and worry where it comes from later we can always reopen this job description. Truth is it is a secure limited work occupation that has a great retirement program. or on the other hand…find another line of honest work.

  6. Mike says:

    Ron-I never said that I had a problem with the police and fire getting the pensions that are due them (Re-read my post). I appreciate the job that they do and believe that their pensions need to be fully funded. What I have a problem with is expanding the benefits of the pension when the officers and firefighters were never promised healthcare for spouses and children upon retirement. As “citizen” says, they accepted their jobs with rules in place and they accepted those rules.

  7. serah says:

    I agree Mike. As is always, everyone wants to “cut” but “don’t cut mine”. When there’s NO MONEY everyone has to come to the party.
    Also, Mayor, please look into the $200. a month Welfare reciepiants get for Transportation money, gas etc.so they can look for a job. We have alot of waste in our budget.

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  9. Sally says:

    Public employees think it’s ok to raise my taxes to pay for their benefits? Because that’s where the money comes from.

    Hello. Wisconsin. That is coming to Kentucky as well as many, many other states. Forget it, public employees. Take what you have and be grateful.

    Being out of a job with no pension and no prospects is pretty devastating to one’s health.

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