Tuesday, March 19, 2019

Pension Tension in Upper Pottsgrove Township

Photos by Evan Brandt

Upper Pottsgrove Public Works Director Justin Bean points out the areas of Pine Ford Road his department intends to have paved this summer during Monday night's board meeting.

Monday night's commissioners meeting was not much more than an hour, but it was not without controversy.

Not controversial, but always of great interest to driving taxpayers, was Public Works Director Justin Bean's outlining of which roads will be paved this summer.

The winners are Pine Ford Road, from Farmington Avenue to Pine Ford Road and Kummerer Road, from Pine Ford Road to Farmington Avenue. Congratulations to all of you who guessed right.

Also uncontroversial, but obviously needed, was the appointment of Jeannie DiSante, an Upper
Jeannie DiSante gets surprised by a photographer after her 

appointment to the township's financial staff is announced.
Pottsgrove native who most recently worked in Colebrookdale Township, to take the helm of the township's finances.

I say needed because not only did Township Manager Michelle Reddick inform the board that the fire company number used for the 2019 budget was incorrect; but there appears to be some dissent on the board of commissioners about how to deal with a $1.2 million shortfall in the combined pension funds for the township employees.

So it likely won't be long before DiSante's financial expertise will be called upon.

The board voted 3-2 last night to increase the pension contribution made by the non-uniformed employees of the township, which had stood at 2 percent. Police employees pay 5 percent of their salary, the maximum allowed by the state.

There are eight non-uniformed employees and nine police (uniformed) employees in the plans, according to a worksheet prepared by Taylor and shared with me.

The approved motion will increase the non-uniformed employee contribution by one percentage point a quarter until it is at 5 percent as well by the end of the year.

The motion, which was opposed by Commissioners Elwood Taylor and Martin Schreiber, was supported by Commissioners' Chairman Trace Slinkerd, Vice Chairman France Krazalkovich and Commissioner Renee Spaide.

Krazalkovich said the combined uniformed and non-uniformed pension plans have $1.2 less than they should to be "fully funded." According to Taylor's worksheet,  the pension has 3,414,684 in assets but $4,621,462 in liabilities.

Taylor pointed out that increasing the contribution for non-uniformed employees will not come anywhere close to closing that gap, a fact Slinkerd acknowledged.

According to Taylor's work-sheet, the increase imposed on the non-uniformed employees will only add $14,238 to the pension fund, far short of the shortfall.

But it will cost each non-uniformed employee an additional $1,780 this year, a 150 percent increase for them, while the township will contribute no additional money.

It is money which they will get back, as Slinkerd pointed out testily, but not for dozens of years, Taylor replied, and all to make a drop in the bucket to a much bigger problem. He calculated the increased cost to the non-uniformed employees will bring the combined pension fund from 73.9 percent funded to 74.2 percent funded.

Further, said Taylor, the township's contribution to the police pension fund dwarfs its contribution to the non-uniformed employee pensions, whose 2 percent contribution was until last night matched by a 2 percent contribution by the township.

For non-uniformed employees, they paid $1,186 at 2 percent and will pay $2,966 as a result of the vote, while the township contribution stays as $1,106.

For the police, on the other hand, the employees pay 5 percent and the township contributes 18 percent.

That means each police officer contributes $3,713 each year and the township contributes $13,605 for each officer each year. Additionally, police can start collecting their pension at 55 whereas the non-uniformed employees must wait until they are 65, Taylor pointed out.

More befuddling is it was not entirely evident that the board has a grasp of the full scope of the problem, or of its ultimate cause, but that didn't stop them from implementing a solution.

It is a solution, by the way, that it is not clear the township's pension board -- comprised of employees and township officials -- recommended or is even aware of.

After Schreiber made a motion to table to the vote to find out the pension board's position on the matter, Taylor seconded it but it was defeated by the same 3-2 split.

And when Taylor asked if the pension board had made a recommendation for the motion, Slinkerd looked at him, blinked, and turned his head and asked if there were any other questions.

Then they voted.

That's how public questions about public money get answered now in Upper Pottsgrove I guess.

Here are the Tweets from the meeting:

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