Arguments Over Pension Could Mean Lexington Layoffs

By: Dave Spencer Email
By: Dave Spencer Email

Police and Firefighters say it's owed $246 million for the pension plan, the city argues but says now is not the time to take a big chunk all at once. And the issue is being heard by the Kentucky Supreme Court.

Over half of Lexington's general fund goes to police and fire, but the pension plan for firefighters and police is underfunded by nearly 250 million dollars. A problem Mayor Jim Newberry says has been plaguing the city for 30 years.

Mayor Newberry says there has only been one time when the pension was funded at the proper rate. Now with police and fire unions loosing thousands in a struggling financial market, it's looking for the city to start paying what it's owed.

Currently Lexington pays 18% of the total payroll to the pension plan, now the unions are asking for an additional 20 million dollars annually for the next 23 years, that's how long it would take to recoup the money.

The Mayor offered a different solution, $70 million to be sold in bonds then paid off by the city over the next 20 years. The Mayor says they wanted to take that money in addition to the $20 million annually. That's something the city can't afford, said Newberry.

The Pension Board has the power to name the price they want the city to pay, and according to a former board member they have no plans on changing the 20 million dollar figure.

Newberry says if that is the case, he'll be forced to cut positions in fire, police and other departments. The Mayor says with flat revenues and growing expenses and a budget that must be met, he'll have no choice but to make cuts.

Mike Sweeney of the Fraternal Order of Police says it's not fair to punish fire and police officers for the city's mistakes.


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