On January 21, 2020, the Board of Aldermen voted to place Proposition E, a pension-dedicated property tax increase, on the June 2, 2020 ballot. This tax applies to all taxable property in the City of Glendale and is an increase of an existing pension-dedicated property tax levy.
Official Ballot Language
Shall the City of Glendale, Missouri, impose a tax upon all taxable property within the City at a rate of not more than twenty-four (24) cents per hundred dollars assessed valuation for the purpose of funding the pensions of all full-time City employees, including police, fire, public works, and city hall personnel?
As the costs to retain and recruit quality employees continue to rise, the City is faced with challenging financial decisions. The largest of these challenges is the severely underfunded Police & Fire Pension Plan.
The proposed solution to the current Police and Fire Pension underfunding is Proposition E. The current voter approved pension-dedicated tax rate has been in place since 1984 and has never been increased. Today, the annual revenue generated by the current rate of 6.9 cents per $100 assessed valuation does not cover the annual recommended contribution to the Police and Fire Pension plan and covers none of the public works and city hall personnel retirement plan.
Q: What is Proposition E?
A: The City of Glendale has placed Prop E on the June 2, 2020 ballot. If approved, Proposition E would increase the pension-dedicated property tax for the purpose of funding the pensions of all full time City of Glendale employees, including police, fire, public works, and city hall personnel.
Q: What is the City’s plan for the additional revenue generated by Proposition E?
If Proposition E is approved, it is the intent of the City to transition all full time City employees, including police and firefighters, to the L6 level of the Missouri Local Government Employees Retirement System (LAGERS). LAGERS will accept administration of the frozen Police and Fire Pension plan conditional upon the City achieving 100% funding of the frozen plan via fixed payments over the next 15 years. Paying down the Police and Fire Pension underfunded status represents the most significant cost of this plan.
Q: Why LAGERS?
A: LAGERS is the largest retirement system in Missouri that serves local government employees. LAGERS membership includes over 60,000 police officers, fire fighters, public works personnel and administrative staff from nearly 700 public employers in Missouri. This includes many municipalities in St. Louis County, such as Webster Groves, Rock Hill, Town and Country, Shrewsbury, and Crestwood to name a few. LAGERS internal professional investment team manages over $8 billion in retirement assets with a current funding level of 94.9%. In addition to financial stability, LAGERS will provide current and future Glendale employees a cost-of-living adjustment (COLA) to their LAGERS retirement benefit. This is something not currently provided under the City of Glendale managed Police and Fire Pension plan.
Q: Why is Proposition E on the ballot?
A: Since the 2008 Financial Crisis, the City managed Police and Fire Pension plan has remained severely underfunded. Like many other local municipalities, Glendale’s budget consistently runs very tight as healthcare and other costs continue to rise. This has not allowed the City to sufficiently fund the current pension plan. Approval of Proposition E will allow the City to move all police and fire employees to LAGERS and resolve the underfunded status of their existing pension. It is believed that moving to LAGERS will aid in the recruitment and retention of quality long-term employees who are seeking the security and stability the LAGERS retirement plan affords.
Q: How much will Proposition E cost Glendale residents?
A: The current pension-dedicated property tax is 6.9 cents per $100 of assessed valuation. Voters last approved our pension rate in 1984 and it has not been increased since then. Moving employee retirement benefits to LAGERS will require an additional 17.1 cents per $100 of assessed valuation. The average home in Glendale is valued at $350,000. This means that the additional cost for the average homeowner is $114 annually, or $9.50 per month. With 19% of property value being assessed, the $114 figure is calculated by multiplying the $350,000 by 19% by 17.1 cents per $100 of assessed value.
Q: Why so much of an increase?
A: The current Glendale pension property tax rate was established in 1984 at 20 cents per $100 of assessed valuation. Since that time the levy has been rolled back to 6.9 cents per $100 valuation due to increases in property values. This rollback is required under the Hancock Amendment which does not allow cities to collect more in taxes simply because home values went up. A nominal increase is allowed for inflation, so therefore the overall amount raised from this tax has remained relatively steady even as Glendale has seen more employees retire and its workforce expand during this time. The proposed rate of 24 cents per $100 valuation will bring Glendale’s pension levy to the level necessary to ensure that Glendale employees have access to a financially stable and secure retirement plan now and into the future.
Q: Will Glendale employees be required to contribute to their LAGERS retirement?
A: Yes. All Glendale employees will be required to contribute 4% of their salary to the LAGERS plan. This is an increase over what they contribute today to the City managed pension plan and current LAGERS plan.
Paid for by the City of Glendale, Mike Wilcox, Mayor
424 N. Sappington Road, Glendale, MO 63122