Following the November general election approval of a .20% sales tax for public safety personnel pensions, the Great Bend City Council held a study session Monday night and started initial discussions on what changes to Police and Fire retirement plans may look like. This is not a choice the council is taking lightly.

In the first of what could be a series of sessions on the topic, council members looked at the first of two options, the switch to the Kansas Public Employee Retirement System’s Kansas Police and Fire plan. This is passionately supported by officers and firefighters who see it as offering a better post-service lifestyle and a recruitment tool, but some city officials worry about its long-term cost.

Indeed, a large number of safety staff were present Monday, several of whom offered emotional testimony in favor of the switch.

“Just be aware that this is only step one,” Mayor Cody Schmidt said. “There will be no decision-making anytime soon.”

Following the Dec. 20 meeting, the council will delve into the pros and cons of the current police and fire retirement packages. 

“So we’re definitely going to hear all sides of this,” Schmidt said. He strongly suggested the interested parties return as well and keep an open mind.

“We’ve talked about this and I know this will be a deep conversation for all of us,” the mayor said. “And there’s a lot of things to put into this and it all boils down to money. We’re all aware of that. And I think we’re all adults here.”

There is no timeline to make a decision, City Administrator Kendal Francis said. Should the city move to KF&F, that wouldn’t happen until January 2023.

What is Kansas Police and Fire?

Paige Ashley with the Kansas Public Employee Retirement System addressed the council via Zoom, giving an overview of KPERS’s Kansas Police and Fire pension plan. Council members asked numerous questions, and several police officers and firefighters gave appeals for the city to adopt the KP&F.

“Basically, it is under the KPERS umbrella,” Ashley said of KP&F. 

Currently, the city provides a 401K retirement plan for all employees, including policemen and firefighters. However, first responder retirement needs are unique, with more limitations on how long they can work, city officials said.

So, to improve this, the city sought the sales tax. This comes to 20 cents on every $100 spent, raising an estimated $755,000 each year with no sunset.

The present plans are with Mission Square Retirement, a non-profit corporation providing public sector retirement plans. The city is not a part of the KPERS.

Ashley said the city can still go with KP&F for first responders. But, it would be exclusively for them (it would not cover GBPD or GBFD office staff), and once the change is made, there is no going back.

Ashley then walked the council through an overview of the KP&F system. 

The employees would contribute 7.15% of their gross salaries (an increase from the current system) and the city would contribute 22.86% of the employees’s salaries (a large increase). Ashley said the employer portion has fluctuated over time, but increases have stabilized.

Ashley said current employees could opt to change or stay with the current plan. Once a part of KP&F, they would have to remain enrolled, but their benefits would be for their lifetimes.

She then explained the retirement eligibility requirements, and benefits to employees and their beneficiaries.

Since the system is part of KPERS, Ashley said all premiums go into the KPERS trust fund that is a standalone entity and cannot be touched by other state agencies. It is from this fund that benefits are drawn.

This sparked some concern from the council.

“So is the trust fund fully funded?” said Ward 2 Councilwoman Jolene Biggs. Since this option arose, she has expressed worries about the long-term viability of KP&F and its cost to the city.

“It is not fully funded at the moment,” Ashley said. However, “fully funded” means the account would have enough money to cover all members should they retire at one time.

Some on the council were also concerned about what would happen if an employee leaves before being fully vested and is not eligible for KP&F benefits. The city pays into the trust fund for that person, but would not be refunded any of the money it invested, Ashley said.

Emotional support

“This is a very, very big decision,” said GBPD Sgt. Gary Davis. “We all have to decide what the city can afford. But safety is also very important.”

As is, he said it would be difficult for a first responder to retire earlier if needed due to physical limitations brought on by the job.

“It grinds you down,” said GBFD Capt. Matt Peterson. 

Police Lt. Heather Smith described the emotional toll the work takes on officers. She referenced an incident where a baby died in the arms of a firefighter.

“These are things you can’t forget,” she said.

Police officers and firefighters say this would make the departments more competitive and help eliminate the rapid turnover that plagues both. It also offers a guaranteed pension for retirees.

Some on the council find this fraught with hidden costs and have voiced concerns. They fear potential ramifications for taxpayers.

Making the change would be more expensive, about $550,000 per year. This is the equivalent of 6 mills in property taxes.

The sales tax is enough to cover the cost for a few years, but it was noted that the cost will increase annually to nearly $850,000 by 2033, and possibly more.

Those on the council who question the change to KP&F noted the plan could be $1 million underfunded in 10 years (which equals about 10 mills) and $2 million in 20 years.

The council fears this will still force the city to raise property taxes to meet the need.