Police-fire pension update notes imbalance

MARQUETTE — The Marquette City Commission last week heard updates on the police-fire pension, which now has more retirees than contributing members, and changed the regular meeting time for next year, among other actions.

The commission moved its regular meeting time from 7 p.m. to 6 p.m. starting in January.

Kirk Vogler, chairman of the Police-Fire Pension Board, gave an update on the status of the pension system, which includes a total of 127 current members.

The pension is separate from the statewide Municipal Employees Retirement System pool and its third-party administrator is Wells Fargo bank instead of MERS.

There are 58 contributing, active members and 66 retired members in the pension system, plus three deferred who will eventually draw retirement funds.

The fund has just shy of $29.5 million and was 74 percent funded at the end of 2015. That is slightly down from 2014 when it was 75 percent funded, according to the city’s finance department.

The board’s goal is to raise that to 80 percent funded, Vogler said, a goal shared by pension systems around the state.

“Again, I do see it going there. It’s (going to) take years and hopefully the market continues to do some good things for us,” Vogler said.

A 2013 switch in investment management by Wells Fargo to a branch at the bank that handles pensions specifically saved some money and increased growth to 5 percent net of fees, Vogler said.

The fund was able to issue a 13th check again this year, averaging around $280 per member, Vogler said.

The recent contract negotiation with the firefighters union increased active members’ contribution to the system, due to the increase in retirees drawing off the pool, he said.

“The pension system is a really important benefit that we have. We feel lucky to have it, so when we sat down and talked with our members and then when we sat down and talked with the state, we came up with some strategies,” Vogler said. “We agreed to increase our contribution at the fire department level because we know how important it is, and we want to make sure it continues to stay a benefit.”

Commissioner Tom Baldini expressed concern about the police-fire pension’s unfunded liability, like that of MERS, with the imbalance of contributing versus retired members.

“The good news is we’re living longer, bad news is we’re (going to) draw more on the pool,” Baldini said. “I know that the city manager and staff are looking at ways (to assess) where are we going over the next five, 10 years in the city and one of them is the retirement thing, and we have to be concerned about it because employees do have a right to that benefit. It was guaranteed to them, promised to them, but we have to be certain that we fund it.”

Vogler said that imbalance is a major point of discussion for the board, which is why the firefighters union increased their contribution. He added that the system, funded at 74 percent, is in good standing compared to many pension systems in the state.

The commission also made routine appointments to some boards and committees, including Fred Stonehouse to the Local Development Finance Authority for a term ending in August 2020 and Joy Cardillo to the Planning Commission for a term ending February 2017.

They also made two reappointments: David Boyd to the Marquette County Transit Authority for a term ending December 2019 and Karan Hendricks to the Downtown Development Authority for a term ending January 2021.

In the consent agenda, the commission also approved:

≤ a server virtualization lease agreement, approved in this year’s budget, as a disaster recovery solution to ensure continued network availability and data access in the event of a catastrophic failure of equipment for a one-time cost of $6,400 to migrate data from existing servers and $17,340 annual cost to lease and virtualize network servers for a term of 60 months;

≤ storage lease agreements for the Marquette Junior Hockey Corporation and the Marquette Figure Skating Club;

≤ scheduling a public hearing for the Dec. 12 regular commission meeting to consider renewal of a franchise agreement for SEMCO Energy Gas Company to operate in the city;

≤ a routine publication and communication ordinance review;

≤ a SEMCO gas main easement to construct a natural gas main to the Marquette Board of Light and Power’s new Marquette Energy Center, required to provide natural gas to the plant;

≤ paying budgeted bills for the Marquette County Solid Waste Management Authority totaling $502,500;

≤ a MERS plan amendment to increase the employee contribution for Public Housing employees to 6 percent effective Oct. 1, as decided in recently settled labor contracts;

≤ a bid for a pre-assembled 80 niche columbarium for Park Cemetery to sole bidder Eickhof Columbaria of Crookston, Minn. for a budgeted $36,952;

≤ purchase of a progressive-link thumb for the city’s existing CX135 excavator from Road Machinery and Supplies Co. of Negaunee for $10,085, the lowest quote, to allow operators to safely lift concrete and other rigid debris from excavations when digging for water line services and sewer main repairs; and

≤ purchase of one Oshkosh plow truck at a cost not to exceed $310,000 for the city motor pool to replace two back-up trucks that aged out last winter. By virtue of membership in the National Joint Powers Alliance purchasing program, the Oshkosh plow truck purchase will be routed through the regional Oshkosh dealer in Gwinn, and the city will save about $47,155.

Mary Wardell can be reached at 906-228-2500, ext. 248. Her email address is mwardell@miningjournal.net.