Council ponders increase in taxes

Extra revenue would pay for revised pension plan for city's police officers

`Last course of action'

Westminster

October 18, 2002|By Athima Chansanchai | Athima Chansanchai,SUN STAFF

A property tax increase could be one way for Westminster to pay for a new pension plan for its police officers, members of the city's Common Council said yesterday.

"I would think that if the committee recommends going to an actual retirement plan that would give police what they've asked for - a 25-year retirement and roughly 50 percent of their pay back - I don't see how over the long term we can afford to do that without identifying where additional money would come from," said Councilman L. Gregory Pecoraro. "There are two choices: to either cut operating costs or ongoing programs, or get additional revenue.

"Basically, the only avenue available to the city would be some kind of increase in the property tax rate or additional revenue through annexations."

If approved, it would be the second increase in a year. In May, the council adopted a budget that included the city's first property tax increase in five years. The rate rose 4.8 cents to 40 cents per $100 of assessed value. That means an owner of a home with an assessed value of $125,000 will pay $500 in property taxes next year, an increase of $60.

That increase will generate $500,000 in additional revenue to close the gap after the council trimmed $1.6 million from a $2.1 million deficit.

"Raising taxes is always a possibility, but that would be the last course of action," said Councilman Roy L. Chiavacci, chairman of a subcommittee that joined police representatives in June to develop a new pension plan for the city's 43-member department. The department has pushed for a better plan for more than three years.

Chiavacci said before the council asked taxpayers for more money, the city would negotiate with the state for higher rebates for the new plan.

The department's retirement plan is part of a state pension system that returns 32 percent to 42 percent of the average of three consecutive years of an officer's highest salaries, after 30 years. Officers at a Westminster Police Association meeting in the spring said that amount isn't enough to live on, especially if they have a family.

In April, the council proposed a supplemental retirement plan. But the council withdrew the plan in May after officers and residents opposed the idea.

Under the rejected proposal, the city would have deposited the equivalent of 5 percent to 9 percent - depending on length of service - of an officer's annual salary into an account similar to a savings plan. Officers would have had to work 30 years to receive the plan's maximum benefits.

The city still has $125,000 reserved for a pension enhancement plan, but officers want a plan modeled after the Law Enforcement Officers' Pension System (LEOPS). According to the city's studies, this would cost $364,000 a year, or $17 million over 25 years, factoring in inflation and additional officers.

LEOPS returns 50 percent of an officer's salary after 25 years of service.

If Westminster adopts a LEOPS-like plan, the city should receive about $180,000 a year for 25 years in rebates from the state, Chiavacci said.

City officials could request more state money up front and over fewer years with the hope that property values and tax revenues will rise, negating the need for an increase, Chiavacci said.

With the last of more than six meetings set for Thursday, Chiavacci's public safety subcommittee could recommend a plan to the council as early as Oct. 28.

Chiavacci says he hopes that plan will help the city recruit and retain officers.

"There are unique characteristics to police work," said Chiavacci, who was a state trooper for more than 25 years. "They're in life-threatening situations every day."

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