Naples balancing the budget to increase government pensions
The City of Naples wants to make sure it has enough money to pay for its employees’ pensions. Just hours ago, the city council discussed ways to do it.
It is a harsh job fighting flames while putting yourself in danger to protect others. Firefighters want to know they are covered upon retirement.
“They’re attracted to a stable pension plan with good benefits,” Naples Fire-Rescue Chief Pete Dimaria said. “With a well funded and well-run city.”
The City of Naples said it does have good pension funds. Fire-Rescue has funded at 82%; 83% for general city employees; and 76% for police. But now, the city wants to direct $858,000 of taxpayer money towards future pensions they expect to pay in the next 30 to 40 years.
The difference between future payments versus what they have on hand right now is over $40 million.
“We didn’t get here overnight in every jurisdiction across the state and county deals with it,” said Gary Young, finance director for the City of Naples.
The amount accumulates over time when paying out benefits without putting the right amount in reserves. The city said the only way the shortfall would create a problem right now, is if every employee were to retire at the same time. But if they do not work to get this amount down, eventually they will run out of money.
The city said it is working to chip away at these projected costs, falling from $65 million to $40 million over the previous decade. Although it is taxpayer money, the city said it will not impact the quality of services now.
“It’s about taking a long term approach,” Young said. “It’s a strategic smart walk, don’t run reduction.”
The strategy makes the city’s pensions more attractive to their employees, Chief Dimaria said.