Albany City Commission sets site on closing pension plan to new hires

ALBANY – The Albany City Commission is looking to hit the gas pedal on two disparate issues: a revamping of the city’s retirement plan and speeding up progress on a school-based store looking to locate in the downtown area.

During discussion Monday on shoring up the city’s defined-benefits retirement plan, some commissioners indicated the need to move forward with a plan for newer employees that would shift them into a defined-contribution system.

Over the previous two years, the commission has earmarked a total of $10 million toward stabilizing the city worker’s pension program, and more funding is needed to ensure the long-term stability of the fund over a 30-year period, city CFO Derrick Brown told commissioners.

The amount needed next year could range from $1.4 million to $4 million, depending on which of three options the commission chooses. Brown’s recommendation is for the first option, which would require the $1.4 million investment in the initial year.

“It allows us to make a down payment on an unfunded liability,” he said.

Commissioners have previously discussed the move to a defined-contribution plan for new hires and employees who have been on the job for only a short amount of time, and Commissioner Bob Langstaff indicated a preference for dealing with both issues at the same time.

“That is the plan,” Brown said. “This (defined-benefit plan) is Phase 1. As the Pension Board, we think this should be stabilized. We certainly plan to bring this (defined-contribution) back.”

Making the transition to the defined contribution model was a priority of former Mayor Willie Adams, who was elected in 2004, Langstaff said, and since then the issue has languished. In the meantime, the old system has remained in place, adding many more employees to the pension program.

“How much more liability have we got” in that time?” Langstaff said. “I’m happy to go ahead and close it for new hires after a certain date.”

Implementing the new plan would take time, City Manager Terrell Jacob said. He recommended bringing a proposal to the commission during budget discussions, with the intention of putting it into place at the start of the 2024-2025 budget year, which begins on July 1.

The city has been much more generous in its pension plan than most governments in the state, Jacobs said, and that has made it more expensive.

“We have a Lamborghini plan,” he said. “When you have a Lamborghini, you have to maintain a Lamborghini. Adding new employees won’t help.”

Commissioners also chafed at the time it has taken to get the ball rolling on the 4C (Commodore Conyers College and Career Academy) on Front project.

The college and career academy store will be located at 221 and 215 Front St. and is set to include the second Georgia Grown Innovation Center to be located in the state.

“We need to get these projects moving,” Mayor Bo Dorough said.

Under a memorandum of understanding presented to the commission, the city will pay 70% of the construction costs for the project, with the 4C Academy picking up the remaining 30%.

The Albany-Dougherty Inner City Authority owns the property, which will be leased to the school.

The store will be a site to sell fresh vegetables grown at the school as well as other items produced by students. The investment in the project is expected to total about $1 million.

Dorough suggested that the memorandum of understanding should set a cap on the amount of funding for which the city is responsible and also give a timeframe for completion.

“I think we need a number of what we won’t exceed for our $70%,” he said.

Staff Photo: Alan MauldinAlanMauldin[email protected]
https://secure.gravatar.com/avatar/f714026fc83d6150ab9a4350b4169940?s=100&d=mm&r=g