Arkansas, Pages 11 on 07/28/2011
LR police pension panel sticks with plan
By Kristin Netterstrom
LITTLE ROCK — Little Rock police pension board members haven’t abandoned their alternative sales-tax plan despite a disappointing meeting with City Manager Bruce Moore, who said the half-percent tax would not meet the needs of the capital city.
Moore is chairman of the police pension board, but the majority of board members decided to promote an alternative tax plan instead of the city’s 1 percentage-point tax increase on the ballot for Sept. 13.
Their campaign won’t change what’s before the voters but it has caused some heartburn for city officials who say the city’s proposal needs all the support it can get.
“I wish they would have understood how important this is to the city and endorsed it and helped us with it,” said City Director Joan Adcock, who sat in on a Tuesday pension committee meeting with Moore and pension board members.
Moore, who returned from vacation Monday, said he hasn’t had time to review the pension board’s proposal, which would eliminate funding for parks, economic development and youth programs.
“On the day we are mourning the loss of Decree [Thomas], a proposal that would put money into prevention [programs] and put money into more officers on the street, it just hurts my heart that we can’t come together and move this city forward,” said Moore, who was referring to a 14-year-old Little Rock boy shot to death early Tuesday morning.
City Hall’s plan involves asking voters to increase the total city sales tax from a halfpercent to 1.5 percent. A permanent five-eighths percent tax would raise an estimated $31.6 million a year for operations, and a three-eighths percent capital tax would pay for $195 million worth of construction projects and economic development support before expiring in 10 years.
Little Rock shoppers cur-rently pay a half-percent city sales tax on top of a 6 percent state sales tax and a 1 percent Pulaski County sales tax. Restaurant meals and hotel rooms are taxed an additional 2 percent by the city.
Pension board members, excluding Moore and Finance Director Sara Lenehan, decided Wednesday to push their alternative plan for a half-percent tax further.
They’ll try to make a case for it with city directors Tuesday night during a time normally reserved for residents who have concerns that aren’t on the Board of Directors’ agenda. Members of the public normally have three minutes to speak.
Farris Hensley, a retired police lieutenant on the pension board, said police members of the board are going that route because Moore didn’t support adding their tax plan to the agenda.
They’re also calling a full meeting of police pensioners on Aug. 8 “to get some final direction from them from Aug. 10 leading up to the date of the election,” Hensley said.
He doesn’t anticipate members of the pension fund asking the police members of the board to abandon their cause, even though Police Chief Stuart Thomas, a beneficiary of the plan, has come out against the pension board’s proposal.
Hensley said police members of the board will also point out to members of the pension fund questions and concerns they have with the city’s sales-tax initiative, such as $72 million for unidentified street and drainage improvement projects. City officials have said they would develop the project list after the election with the help of residents.
Police members on the pension board say the city should pursue a tax package mostly for public safety and abandon a larger tax that would also go toward a new research park, sidewalk construction and park improvements.
While keeping additional police officers and firefighters proposed in City Hall’s package, the pension board’s plan would eliminate funding for additional youth programs, replacement vehicles, technology upgrades and filling a number of vacant positions in other departments.
At the same time, the alternative plan would double funding for the police and fire pension funds from $500,000 earmarked in the city’s tax proposal to $1 million while eliminating $3.2 million set aside to create a new type of retirement fund for the city’s nonuniform employees.
Mayor Mark Stodola earlier this month called the pension board’s plan “very out of touch with what the future holds for this city.”
But police members on the pension board believe so strongly in their alternative plan that they’re willing to spend up to $20,000 on advertising and campaigning for it rather than the city’s sales tax.
Stodola and other city officials have questioned the wisdom and legality of spending pension-fund dollars on a campaign, but the attorney for the pension board found no state law prohibiting the spending.
The Monday opinion from Kutak Rock attorney James Hathaway did caution members, however, that there was no case law and that a judge could always determine that spending on advertising was not in the pension fund’s best interest.
Little Rock’s police pension fund is one of nine older plans in Arkansas that the state has projected will be insolvent in 10years if local authorities don’t supplement it or restructure funding methods. Police board members have suggested the city pursue consolidating with the Arkansas Local Police and Fire Retirement System, but city officials said that would take even more money.
The police pension board oversees an older city pension program that is closed to any new officers. Only nine members still contribute to the plan, which pays out benefits to nearly 300 people.
Moore said he told pension members Tuesday that if the sales tax passes and there is addition revenue beyond the 2 percent growth estimate, he would consider putting more money toward the pension fund.
“I understand everyone has their right to disagree, but I think the city has stepped up and made a strong statement that we want to decrease the potential ruin for these pension funds,” Moore said.
The city lobbied a change in state law last year that will result in an estimated $600,000 increase in state turn-back funds for the pension fund by 2016. Those turn-back funds come from a fee on car insurance.
The pension fund is also funded through property taxes residents pay every year.
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