Borough in retirement quandary

MAT-SU — State regulators have chosen to shine a light on the way the Valley compensates its employees with the most significant changes likely to happen among the ranks of its first responders.

The issue revolves around the state’s retirement program, the Public Employees Retirement System. The rules for who qualifies and who doesn’t are governed by how many hours a person works, and thus whether that person should be considered full-time, part-time or on-call.

The bulk of firefighters and other Mat-Su Borough emergency responders are paid on-call responders and don’t earn retirement benefits.

Borough Manager John Moosey said the borough classifies its employees based on agreements worked out with unions representing responders. The state wants the borough to use its definitions instead, and staff representatives are negotiating just what that means.

“We are really looking at following a little bit closer under their definitions moving forward,” Moosey said. “We’re really trying to figure out what that means as far as who qualifies and how we need to make adjustments in our operations.”

He stressed repeatedly that there is no determination how that would work. But, in a voicemail he said that internal calculations at the borough peg the amount of money it would cost annually to provide retirement benefits to the responders who would qualify under the state’s definition at $1.75 million.

That might not seem like a lot, but the 2014 budget of the Wasilla Lakes Fire Service Area is about $5.6 million, and that’s the largest fire department in the borough. Adding up all the fire service areas — from Sutton’s $165,512 budget all the way up to Wasilla Lakes — the borough budgeted $9,367,896 to fire service areas for 2014.

That the budget is divided into the service areas complicates the problem. Ambulance, Moosey said, is an area-wide service, meaning one service covers the whole borough. That service might be better able to take the hit of including responders in the state retirement system.

But the fire departments, even though they would be liable for a smaller piece of the pie, would probably not be able to swing the extra cost, especially the smaller ones like Sutton.

So, what’s another option? As it stands now, if the state holds the borough strictly to its definitions and if the borough wants to avoid that sudden bump in costs, responders would all have to be held to 15 hours or less per week.

“We’re still going through that, and that is one option, but it’s not a palatable option,” Moosey said. “I don’t think it’s going to work.”

He said the borough is working with the state to find a different, more palatable solution.

A 15-hour cap on time responders can work would make it very difficult for the borough to keep them. Many would need to seek other employment if they couldn’t count on more than 15 hours from the borough, which could put further limitations on what time they could spend responding to calls.

“We value public safety, we need public safety, we value our staff and we also have budget obligations and tax obligations to the people that we serve,” Moosey said.

He said one thing the state hasn’t told the borough so far in this discussion is that there would be any kind of regressive liability. That is to say, the state has not told the borough it would be on the hook to reimburse responders for benefits they did not receive over the course of the 30 years or more the borough has been part of the PERS system.

But attorney and former borough responder Jon E. Wiederholt said he’s been talking to responders, some of whom he’s taken on as clients, and isn’t quite sure that is the case.

“It’s our position that the borough had a responsibility to be watching that sort of thing,” he said. “I don’t think that we can simply say ‘no harm no foul,’ and part of the problem is that we think the borough should have been doing something (all along).”

Contact Andrew Wellner at 352-2270 or andrew.wellner@frontiersman.com.