Pension spike seen as troubling
Covering pensions for police, firefighters and office employees in Williamsport now is a lot more expensive.
The estimated minimum municipal pension obligation figures were released Tuesday by the city finance department at the City Council finance committee meeting.
“We are facing a $500,000 increase over this year’s pensions,” said William E. Nichols Jr., city finance director.
The figure is closing in on $4.5 million, he said to a grim-faced committee troubled by the hike.
“It’s not good news; everything is tracking up,” said Councilman Randall J. Allison, council vice president.
Some assistance may be available, according to Nichols.
To help offset the cost, the state aid is expected to be about $1.1 million, but it still will be a $500,000 increase.
Police pensions are listed at $1.7 million, fire department are $1.5 million and officers and employees, $1.1 million.
A graph chart handed out at the meeting listed the rising lines and pension funding needs.
The city is about 90 percent fully funded however it is paying a $3 million amortization or mortgage for pension coverage, Nichols said.
Pension calculations fall into Mayor Gabriel J. Campana’s proposed budget which is typically revealed with department expenses and revenue before Thanksgiving break.
“It is going to be a difficult budget presentation, but we will find ways to accommodate it,” Nichols said. The actuarial valuation to determine the cost was based on 2017, and much of it has to do with returning interest and investment in fund, he said.
The minimum municipal pension obligation is required to be presented to council by the end of September. Last year’s was $3.9 million.
Campana said it is likely the proposed budget will have to include a tax increase but he doesn’t typically elaborate on that until he speaks to department heads.
He stated he has a strategic financial plan under construction that may require employee layoffs and outsourcing but gave no specifics Tuesday.