Mehlville fire district schedules Aug. 28 public hearing on proposed tax rate

Pension makeup contributions would total about $2.1 million

By MIKE ANTHONY

A public hearing will be conducted next week by the Mehlville Fire Protection District Board of Directors on a proposed fiscal 2009 tax rate.

The hearing will take place at 7 p.m. Thursday, Aug. 28, at the district’s headquarters, 11020 Mueller Road, Green Park.

The district’s current blended tax rate is 60.9 cents per $100 of assessed valuation.

The proposed fiscal 2009 tax rate is 5.6 cents less than the current rate — 55.3 cents per $100 of assessed valuation.

As proposed, the fiscal 2009 tax rates for the general, ambulance and alarm funds would remain unchanged at 40.6 cents, 10.2 cents and 2.5 cents, respectively. The proposed tax rate for the pension fund is 2 cents — 5.6 cents less than the current tax rate of 7.6 cents per $100.

The proposed blended fiscal 2009 tax rate of 55.3 cents per $100 is 47.4 percent less than the legal maximum of $1.052 the board could levy. The blended tax rate is a combination of four tax rates — residential property, commercial property, agricultural property and personal property.

The proposed tax rate for the pension fund would be adjusted upward if Local 1889 of the International Association of Fire Fighters accepts a benefit-package offer the Board of Directors recently authorized in an effort to settle litigation involving the district’s pension plan, according to board Chairman Aaron Hilmer.

During a July 29 closed session, Assistant Chief Steve Mossotti presented the benefit-package proposal to the board “in an effort to resolve the pension and litigation issues currently facing the district,” he wrote in a July 30 memorandum that was sent to the Executive Board of Local 1889.

Board members unanimously approved the benefit-package proposal and authorized Mossotti to present it to the union.

Union employees last December filed a notice of appeal seeking to overturn an August 2007 ruling that upheld the board’s authority to make changes to the district’s pension plan. Local 1889’s request for a permanent injunction prohibiting the Board of Directors from changing the district’s pension plan to a defined-contribution plan from a defined-benefit plan was denied Aug. 27, 2007, by St. Louis County Circuit Court Judge Thea A. Sherry.

On Dec. 24, Sherry denied union employees’ motion for a new trial, but granted their motion for an injunction pending appeal that prohibits the board from making any changes to the district’s pension plan. But Sherry’s injunction excludes employees hired after March 31, 2006.

Regarding the proposed tax rate of 2 cents for the pension fund, Hilmer said, “We’re only going to take enough to fund the people under our current defined-contribution program that we voted to implement on 3/31 of ’06, and, in my opinion, that’s the only plan we’ll ever fund in the future.”

But if the benefit package is accepted, the tax rate for the pension fund would be adjusted to ensure the defined-contribution plan would be funded for all employees.

“We would adjust that upwards and, in my opinion, I would always vote to ensure that our defined-contribution plan would have — under our proposal — would always be adequately funded,” Hilmer said.

Among the provisions of the benefit-package proposal authorized by the board are:

• A 2-percent pay increase for all employees for 2009.

• All employees will receive contributions for 2008 to the defined-contribution plan based upon gross wages. Those with less than 15 years of service will receive 22.5 percent; 15 to 19 years, 24.5 percent; 20 to 24 years, 26.5 percent; and 25 or more years, 30 percent. For 2009 and future years, employees with less than 15 years of service will receive 8 percent; 15 to 19 years, 9 percent; 20 to 24 years, 10 percent; and 25 or more years, 11 percent.

• An upgrade in the Standard Insurance disability benefits to a higher level of payout.

• The union will need to agree to terminate all pending lawsuits and agree to refrain from any further lawsuits with regard to the termination of the defined-benefit pension plan.

Local 1889 members earlier this year voted unanimously to reject a previous offer from the Board of Directors to settle the litigation involving the pension plan.

Hilmer recently sent an e-mail to all district employees with the goal of helping them “understand the gravity of the situation and the ramifications this could have for them long term. And once again, we have tried ever since day one to constantly reach out to the employees. So far, we’ve only been met with lawsuits in return, but we constantly are.

“But I believe this is the last time that the board will be united to be able to do this. When the board came with this proposal, there was a lot of internal dissension inside the board at the closed meeting. The consensus was perhaps that this offer was too rich. It is obviously a better pension plan than 99 percent of the residents who pay the bills at the fire district receive. But we felt it was the right thing to do, and after Aug. 28 I can confidently say you will never see the board united offering this again,” he said.

In the e-mail, which represent his personal views and not those of the entire board, Hilmer noted employees would be meeting with Chief Jim Silvernail to discuss the board’s proposal.

“He will also discuss the financial alternatives facing you and your family if this plan is rejected. I encourage you to ask any and all questions. It is my responsibility to make sure that you feel you are making a fully informed decision,” the e-mail stated.

“In the past few weeks, there (have) been a great deal of misconceptions about how this plan will work for you and how it will be funded. I want to set the record straight,” the e-mail continued. “The numbers before you have been developed by the district’s actuary, Milliman, and retirement-plan administrator, AUL.

“At the Aug. 5 board meeting, the preliminary tax rates were proposed. Those tax rates will be adjusted upward to fund this proposal. If accepted, I will vote to fund this proposal as long as I am a member of the board. The makeup contributions alone will cost the district approximately $2.1 million. The proposed plan has been designed to bring an end to the distrust and insecurity that exists between the employees and the Board of Directors.”

The board originally had established an Aug. 15 deadline for the union to consider the benefit-package proposal and had planned to set the tax rates on Aug. 21 — a week earlier than Aug. 28.

Noting the district must submit its tax rates to St. Louis County by Aug. 29, Hilmer said, “We are taking it to the bottom of the ninth with two outs and two strikes, giving them every chance to take advantage of it (the benefit-package proposal).”

Attorney John Goffstein, who represents Local 1889, was unavailable for comment before the Call’s press time.