Pensions continue to take a larger portion of the City of Hollywood’s budget.
The City’s pension contributions as a percentage of the General Fund have increased from 7.3 percent in 2003 to 19.6 percent in 2013. The City’s pension contributions as a percentage of property taxes have grown from 19.6 percent in 2003 to 50.3 percent in 2013. The growth in the City’s required pension contributions is squeezing out spending in other areas. This was discussed during the final budget hearing.
Under normal economic conditions, all adjustments to the pension must be collectively bargained with the three unions representing the majority of City employees. These include the PBA, IAFF and AFSCME. Now, the City is in negotiations with both the police (PBA) and fire (IAFF) unions. The City is not proposing any reductions to pension benefits in those negotiations, according to Joann Hussey, spokesperson for the City of Hollywood.
Each year, actuaries for each of the pension plans provide the City with the amount it has to contribute toward normal pension costs for the year. The City budgets for this cost as part of the budget process each year. The funding for the Police pension plan comes entirely from property tax revenue within the City’s General Fund. Funding for Firefighter pensions comes from a variety of sources. Firefighters themselves put in 7-9% of their salary (depending on the date they were hired). The City contributes a value that when combined with the members’ contribution, amounts to a value that has been agreed to be sufficient to fund the plan. The funding for the General Employees’ pension plan is split based on the composition of the active members, with approximately 60 percent coming from property tax revenue in the General Fund and approximately 40 percent come from
Enterprise fund revenues. Some of the City’s employees, such as utility workers and parking staff are paid for from Enterprise funds. Enterprise funds are user fees that cover the cost of the services rather than tax dollars.
The City is not considering changing from a defined benefit plan to a defined contribution plan. Retirement benefits are just one part of the City’s overall benefit package. The City is seeking well-qualified employees and is constantly evaluating its pay and benefit offerings in an effort to ensure they are affordable and competitive.
“The goal of the City Manager has been to create a great environment to work in with pay and benefits that put Hollywood in the solid middle when you look at comparable cities,” said Hussey.
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