Photo by Sam Chandler
Mountain Brook City Clerk and Finance Director Steve Boone talks about employee pensions at the City Council meeting Oct. 28.
The Mountain Brook City Council on Monday, Oct. 28, declined to grant Tier 1 pension benefits to Tier 2 city employees.
The unanimous decision came in response to a bill passed by the Alabama Legislature earlier this year that gave employers with the Retirement System of Alabama the option to provide Tier 1 benefits to Tier 2 employees.
According to Mountain Brook Finance Director Steve Boone, Tier 2 was established for anyone entering the system after Jan. 1, 2013.
Tier 2 employees receive reduced benefits, can't factor sick leave into their service time and must meet both an age and service requirement before retiring to get their pension.
The minimum retirement age is 56 for firefighters and police officers and 62 for other personnel, all of whom must have at least 10 years of service.
Tier 1 employees can retire at any age with 25 years of service or at 60 with 10 years of service.
Mayor Stewart Welch said the city’s decision to decline extending Tier 1 benefits boiled down to being responsible with its resources.
“All of us are very pro-employees,” Welch said of the council. “We are also pro-fiscal responsibility, and I personally believe it would be irresponsible to take on a larger pension obligation than we already have when we are currently putting in literally millions of dollars more than we’re being asked to and we are still backing up with this plan.”
Boone said Mountain Brook’s pension fund is only about 65% funded. That is down from 86% in 2007, despite the city contributing more than it has had to.
Overall, Boone said the city’s unfunded pension liability is currently $31 million.
“What’s going to happen is, over time, the Tier 1s we retire under the current model, they would be replaced with Tier 2 employees, which have a lower pension benefit,” Boone said. “We should begin to see a slight tailing off of the total pension liability as we transition from the Tier 1 to the Tier 2. If you grant the Tier 1 benefits to the Tier 2s, you’re going to lose that reduction over time.”
Separately, the council voted to reduce the public parking time limit in Mountain Brook Village from four to three hours. The change came after Rozetha Burrow, Mountain Brook Police Department’s business liaison officer, conducted a survey that found the vast majority of village business owners favored a reduced time limit.
Burrow reported at the Oct. 14 and Oct. 28 council meetings that 56 business owners said they supported the change while only 10 were opposed to it.
“I think the village has spoken for itself,” Burrow said.
The council, however, decided not to prohibit employee parking in the village. Councilors previously discussed the possibility of outlawing employee parking but determined it wasn’t the right move after Burrow reported that 47 of 63 business owners opposed the measure.
“They do not want to get added on to the ordinance, as a village,” Burrow said.
Canterbury Road is the only village street on which employee parking is prohibited. The council approved an ordinance in September banning the practice after receiving complaints from Canterbury business owners.
Scott Renshaw, owner of Salon 2412 on Canterbury Road, said that singling out one street is discriminatory and criticized the ordinance for relying on an arbitrary enforcement system.
Council President Virginia Smith said the council could revisit the issue at a later date.
“The council can come back and re-address this and study it, and we’d be happy to do so,” Smith said. “But I think tonight we’re going to move on if the rest of the council’s in agreement with me on this.”
The City Council will hold its next meeting on Tuesday, Nov. 12, at 7 p.m.
