PARAGOULD, AR (KAIT) - Paragould Mayor, Mike Gaskill is looking to the future, as increased retirement costs have him requesting an increase in the amount of money set aside for police and fire pension in the city.
"It is a financial issue that we're going to deal with but it's not going to impact their retirement because we're going to make sure that their retirements are funded," Gaskill said. But, he said, Paragould isn't the only city adjusting their budgets because of this. "Cities across the state of Arkansas are all dealing with the same thing."
Gaskill recently put the city's 2013 budget before the city council. One big change was the amount of money requested for police and fire pension.
"We have a reserve fund that we've used for police and fire retirement for many years and each year that fund is going down because retirement cost is going up," Gaskill explained. Because of that, he requested just shy of $111,000 more for police and fire pension.
Gaskill looked into how much money would go to retirement funds over a five year period by information he received from the Arkansas Local Police and Fire Retirement System (LOPFI).
Gaskill said by LOPFI's calculations, in 2013, almost 18% of the fire department's payroll will go toward pension. A little more than 26% of police payroll will go to their pension. However, each year, those numbers go up.
"At the rate this is going, the reserve fund is going to be gone in the next couple of years," Gaskill told Region 8 News. If that happens, the pensions would then come out of the city's general funds.
"We're going to do everything that we can to work it into the existing budget that we have," Gaskill said.
Gaskill explained that legislation that goes into effect in 2013 is part of the reason they're asking for the increase. He said in years before, the state funded much more for police and fire pension. But now, 60% must be funded by the city while only 40% will come from the state.
Gaskill said he just wanted to make sure the council knew about it now, as it is something they'll be dealing with in the next few years.
"The expense is considerable but it's important for us to do what we can to ensure that our police and fire have their retirement."
The Paragould City Council finance committee has the next four to six weeks to review each line item on the budget and get back with Mayor Gaskill on their decision. Region 8 News will keep you updated on this story.