MEADVILLE – Public pension obligations are expected to hit Meadville hard next year. Actuarial projections indicate the city’s minimum required pension contribution will roughly double, jumping from 5 and a half million in 2014 to about 1.1 million in 2015.The main reason for this is the market crash of 2008, the losses of which are just now starting to catch up with the city.
“You can spread those losses out over several years,” said Meadville City Manager Joe Chriest.
“If we would have had to make up seven million dollars in one year, that’s our entire city budget and that’s not practical for any organization.”
Meadville City Manager Joe Chriest said at Wednesday night’s city council meeting it’s too early to tell whether this will mean property tax rates will be going up for city residents.
Chriest said he had an idea that municipal pension contributions would increase, but said he did not expect anything of this magnitude.In 2008, the city’s pension assets went from 26 million to just 19 million. Staff comprise some 72 percent of the city’s expenses.
And making a bad situation even worse, council was informed last night that this half million dollar increase is only the beginning. Pension obligations are expected to rise steadily through 2025.
In City Manager Chriest’s recent budget presentation, he recommended that all new hires be placed into a defined contribution, rather than a defined benefit plan, as was done in the past.