Kenai City Council votes out of PERS

Posted: Wednesday, November 29, 2006

A change in the makeup of the Kenai City Council resulting from the fall elections brought about the reversal of an earlier decision involving retirement benefits for elected officials.

In May, the council voted by the slimmest of margins to keep elected city officials in the Public Employee Retirement System (PERS).

Last week, however, on a 4-to-3 vote, they were excluded.

While campaigning for city council late last summer, Council member Barry Eldridge promised to revisit the issue, believing city council members should not be covered by the state pension plan.

On Nov. 21, he reintroduced the same resolution that was voted down in May, and this time, with his affirmative vote, elected officials have been excluded from participation in PERS.

“I didn’t feel elected officials should be earning retirement benefits under the state retirement plan, especially with the plan being in such dire straits,” Eldridge said on Tuesday.

Eldridge, who retired out of the U.S. Coast Guard, is not covered by the Alaska retirement system.

Also voting to exclude elected officials from PERS were Mayor Pat Porter and council members Joe Moore and Rick Ross.

Porter and Ross, both former employees of the city of Kenai, are already vested in PERS. Moore is also vested, having served on the city council for 11 years as of October.

Moore said his time with the council has been his only involvement with the state pension system.

“I do not believe people in an elected position as a council person deserve (employee) benefits,” Porter said on Tuesday.

During the council discussion, she said she believes elected officials “should serve out of the goodness of your heart.”

While some council members believe the vote to exclude elected officials from PERS is effective Nov. 21 — the day the resolution was approved — others feel it only applies to new council members elected after that date.

Council members Mike Boyle, Bob Molloy and Linda Swarner voted against the measure.

Boyle said he believes the retirement benefit is protected by the state constitution.

“Those in the program cannot be removed once they’re already enrolled in the program,” Boyle said.

He said the reason he opposed having elected officials be excluded from the state retirement program is that he believes people should be rewarded for their service.

“You should compensate people so they can be comfortable with the future,” he said.

“I always think, when you come into a place, you should leave it at least as well as when you come,” Boyle said on Tuesday. “Taking this benefit away leaves less for people coming behind us.”

A participant in the state Teachers Retirement System (TRS), Boyle said he cannot accrue years in both PERS and TRS at the same time.

“It had nothing to do with me,” he said.

He also said he questioned some of the scenarios painted by proponents of the exclusionary resolution, saying state PERS officials told him if a person is no longer on the payroll from the city, the city owes no more money into the retirement system.

City administration had suggested that, if an elected official left the council and took a high paying job with the state, and retired, the city’s obligation toward that person’s pension would be proportionate with the higher salary.

“It’s only costing the (Kenai) taxpayer on payday,” Boyle said.

“I think it may be a mistaken assumption that the city will save money,” Molloy said on Tuesday.

“The city cannot take benefits away from those already enrolled,” he said. “It may only apply to those new people coming in.

“I don’t know that that question has really been answered,” Molloy said.

He also said that because the state Legislature changed PERS this summer to preclude public officials under the newly created Tier 4, the Kenai resolution may not change anything.

“If somebody makes an issue of it, the question may be answered that no legislative body can overrule the (Alaska) constitution,” he said.

Molloy is not vested in PERS.

Swarner has paid into PERS as a council member for 18 years, and said, “The amount city officials would be receiving (in PERS pensions) is insignificant.

“The problem with PERS is a state issue, not a local issue,” Swarner said.

She said she feels the approved resolution “discriminates against a certain group of people who work for the betterment of the city.”

According to City Attorney Cary Graves, the measure went into effect the day it was voted in.

“Effective Nov. 21, council members no longer accrue service for PERS,” Graves said. “New elected officials would not be in any (PERS) tier.”

Phil Hermanek can be reached at phillip.hermanek @peninsulaclarion.com.



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