The Metro Council agreed Wednesday to amend the city-parish's retirement ordinance, locking the proposed city of St. George into paying anywhere from $5.3 million to $7.5 million annually to the parish's retirement system should voters decided to incorporate the new city.
The changes enshrine in law the formulas and protocols to ensure the city-parish retirement system can continue paying benefits to existing and future retirees if voters decide in Saturday's primary election to create the proposed new city of St. George.
The amendments to the retirement ordinance would apply to any geographic area in the future that might successfully separate itself from the city-parish's consolidated government.
"We've patterned this after what a lot of statewide systems have statutorily," Denise Akers, general counsel for the retirement board, told Metro Council members at Wednesday night's meeting. "We've wrestled with this language a couple of months."
The formula the city-parish settled on defines a percentage of the unfunded accrued liability that a new municipality — in this case St. George — must take on based on the revenues the new municipality would be collecting in its general fund that are no longer going to city-parish's general fund.
The board that oversees the city-parish’s retirement system wants the parish’s retirement ordinance amended so the proposed city of St. George…
"Unfunded accrued liability" is basically what the city-parish owes employees who have retired but doesn't have the funds to pay right now.
By the board's calculations, St. George would have to pay the city-parish somewhere between $5.3 million and $7.5 million annually in unfunded accrued liability to the retirement system. That money could be paid in installments over a 15-year period, Akers said previously.
At the request of St. George proponents, language was added giving a new municipality two years from the date of incorporation to start making the annual payments to the city-parish retirement system. In this case, St. George, if it's incorporation is approved, will have time to start building revenue in its coffers before it has to start making the payments.
Mayor-President Sharon Weston Broome said in a letter to the Metro Council before Wednesday's meeting that the estimated annual unfunded accrued liability cost St. George would have to pay doesn't include other pension liabilities associated with the state's retirement system and post-employment benefits like health, dental and life insurance for qualified retirees.
Broome also noted the $4 million St. George organizers have set aside annually in their proposed budget for legacy/retirement costs wouldn't be enough to cover related costs associated with retiree benefits.
"There are many unanswered questions remaining about how much liability the proposed city of St. George would have to assume should it become a reality," Broome said in her letter. "These questions should have been answered long before the proponents of the proposed new city created their budget assumptions."
Drew Murrell, an attorney and spokesman for the St. George campaign, in comments to the council Wednesday chided Broome's administration for not engaging in the conversations between their camp and the retirement board over the issue.
He said St. George proponents appreciate that the City-Parish Employees Retirement System worked with them and remains disappointed the Broome administration has "not engaged in any discussions."
Voters in the southeastern portion of East Baton Rouge Parish are considering whether to create a new city of St. George. The final votes will…
Councilman Dwight Hudson, whose district encompasses a substantial portion of the proposed city, also praised the city-parish retirement board for its willingness to work with the proponents.
He said the amendments to the retirement ordinance didn't give either side everything it wanted but assured that retirement costs would be covered for years to come.
Earlier in the day, representatives from both sides of the debate over St. George appeared before a Republican Women of Baton Rouge luncheon where the retirement issue was discussed, as well as a host of other topics related to the incorporation effort.
Dianne Hanley, who lives in the boundaries of the proposed city and is a leader with the Together Baton Rouge, tried to convince attendees there are still too many unknown variables related to St. George to keep her from ever supporting it.
Hanley reiterated most of the opposition's previous talking points — like St. George organizers low-balling expenditures and overselling revenues in their proposed budget for the city — but also attempted to poke holes in rhetoric from proponents accusing the city-parish of having levied 23 new taxes on residents since 2003.
Hanley noted that only three of the taxes proponents are talking about were parishwide taxes voters approved. The rest on proponents' list were actually court fees someone would only pay for criminal violations and various civil proceedings. And a lot others are special sales taxes that only apply to certain districts, like downtown Baton Rouge.
"Building the city of St. George won't change what we have to pay in taxes," Hanley said.
Hanley argued she'll end up having to pay more taxes if St. George happens because they won't have enough money to run a city so large off the $48 million in projects sales tax revenue they'll be pulling in annually.
Murrell, in his counter arguments, at the luncheon didn't address Hanley's specific claims about the alleged tax increases.
But he did push their belief that St. George's public/private framework for municipal services would equate to the similar annual budget surpluses experienced by Central and many other cities across the country they looked at.
"The idea is to operate is the best interest of the people of St. George," he said. "Being smaller, we'll have the ability to pivot and change based on the economic market and what voters in the city of St. George want."