To start sorting out the public safety pension mess the Grand Island City Council will have to make several big decisions.
First they have to decide if they want to fund their seven remaining police retirees with joint annuity payouts - as they have been for several years - or go back to single annuities.
Finance Director Jaye Monter says that based on estimated cost they'll be short no matter which way they go.
"Either we would need to transfer from the General Fund $600,000 in order to cover the liabilities that would be above the net assets of the [single annuity] retirement plan, or $1.3 million if we were to stay on the joint annuity method," she says.
Meanwhile their one remaining firefighter would only use a fraction of the fire cash reserve fund, leaving behind nearly $3 million.
"The fire reserve would still have excess cash and we could transfer back to the General Fund $2.9 million to bring the net assets after transfers positive," says Monter.
But Monter told the council those fire reserve dollars are also to be used for disability payments, though none are being made currently.
The council also spent two hours Tuesday in executive session talking about the possible legal action depending on which choice they make.
Tom McCarty, the police union's attorney, says that since 2005 the city has paid under a joint annuity calculation. McCarty says because of that eight year precedent the F.O.P. would pursue legal action against the city.
"If the city were to change course for these pre-'84 officials who have been working toward retirement, that would be a violation of the Nebraska constitution as well as the US constitution," he says.
Financial experts say while there have been other kinds of city pension issues in court, none apply to Grand Island's situation.
We'll be at Thursday's council meeting and have more on Nebraska Central News at 9.
A four hour study session and two hours of executive session still weren't enough to solve Grand Island's public safety pension problem.
The City Council, city staff, and a team of financial and retirement experts spent Tuesday afternoon sifting through documents and state statutes.
The council ultimately decided to deny the resolutions and ordinance listed in Tuesday's agenda and will take a look at new resolutions drafted from their wishes expressed in executive session at a special meeting Thursday at 7 p.m.
Seven police officers and one firefighter who were hired before 1984 and are still working for the City of Grand Island are to be paid differently then post-'84 employees because of changes in retirement plans and Nebraska law.
Grand Island's problem is a discrepancy between paying joint annuities (for employee and spouse) or straight annuities (for employee only). At some point a few years ago, the city began paying police retirees based on a joint annuity calculation because that's how fire retirees were being paid. But no council minutes or pension committee meeting minutes ever point to joint annuities being authorized.
It's a mystery that could end up costing the city - both in terms of funding and in litigation.
Watch Nebraska Central News on Wednesday at 5:30 and 9 as we'll go more in depth on this issue.