The East Baton Rouge City-Parish Retirement System wants to amend an existing ordinance to require the proposed city of St. George pay off its share of pension debt to the retirement system, should the incorporation effort succeed.
While the proposed amendment doesn’t say how much St. George would have to pay, the amount would be determined by the CPERS’ actuary—not the newly incorporated city. Once determined, the new city could either make a lump sum payment or spread it out over 15 years.
The proposal, to be introduced at the July 24 Metro Council meeting, applies to “any geographic area successfully removing itself” from city-parish government and would establish a method to determine and allocate “withdrawal liability payments” from the newly incorporated area to the city-parish retirement system.
While not spelled out in the ordinance, Jeff Yates, the CPERS retirement administrator, says the amount would likely be based on the percentage of the St. George tax base that would leave the city-parish, if the incorporation effort succeeds.
“Tax base seems pretty generic,” he says. “The amount taken from the city and allocated to St. George should be in tandem with pension liability. It just seems logical. … It would not be right to be entitled to sales and property taxes but to not take their part of the liability that has built up over the years.”
Yates says his agency has been trying to do this for almost a year, but the parish attorney’s office said the matter should be handled by the state Legislature. An effort to do so this legislative session, however, failed in a controversial bill to create a St. George transition district. So CPERS is now turning to city-parish ordinances.
St. George organizers, however, say the matter is something that must be decided by state statute, which would supersede anything passed by the city-parish.
“We’ll address this in the next Legislative session,” says St. George spokesman Andrew Murrell. “St. George wants to pay its fair share, as we’ve always said.”
But the organizers have two issues when it comes to liabilities, Murrell says: One, St. George has been paying more than its fair share for years. For example, he says, the area funds Baton Rouge police even though it isn’t served by BRPD. And two, Baton Rouge ranks second in the nation for underfunded pension liabilities.
“Baton Rouge doesn’t pay enough of its own pension liability,” Murrell says “They’ve done it to themselves. We want to pay our fair share, not their fair share.”
If the ordinance passes, St. George organizers could supercede the rule with legislation next year or take legal action. All cards are on the table, Murrell says.
Worth noting is the fact that the city-parish did not take such action when Central incorporated in 2005, so the city did not have to pay its share of city-parish pension debt.
“If we had a do over, we would have thought through the process more clearly and would have assigned Central some degree of liability, though it would be much less,” Yates says.
Also, Zachary and Baker, which have always been incorporated, have never paid into CPERS even though it involves some parishwide agencies, like BREC, that serve those municipalities. Yates says Zacahry and Baker pay into their own municipal employee retirement systems.