Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: WEDNESDAY, March 2, 1994 TAG: 9403020198
SECTION: CURRENT PAGE: NRV-2 EDITION: NEW RIVER VALLEY
SOURCE: By PAUL DELLINGER STAFF WRITER
DATELINE: PULASKI LENGTH: Medium
It did bring operational savings for the first two years, but now the localities must pay off millions of dollars in early retirement obligations to the Virginia Retirement System which is charging 8 percent interest on the unpaid balance.
The obligation for Pulaski County alone is more than $2.7 million. No payment to the Retirement System has been made yet, and the interest has been accruing since 1991.
The county Board of Supervisors got the shocking news Monday night from Walter E. Cox, of Robinson Farmer Cox Associates, the accounting firm hired for an audit of county finances.
Cox proposed having the accounting firm work with the county to obtain temporary financing for the 1994 tax year and competitive bids from financial institutions for a $2 million loan by July at a lower interest rate. The loan would be used to pay off the Retirement System.
``This is already incurred. These people have already retired. It's just a question of how you pay it,'' he said.
``I thought this was supposed to save us money,'' said Supervisor Mason Vaughan.
The state's response, Cox said, is that school systems should have been putting away the money they saved when higher-salaried personnel retired.
He said the Retirement Board had been realizing an 8 percent return on its money instead of the 6.5 percent it was expected to get, so the state directed it to set its return rate at 8 percent. The Retirement Board rolled that 8 percent interest rate over to the money that the localities must pay on the early retirements.
``Screwed by the state again,'' Supervisor Bruce Fariss said.
Cox said counties in Southwest Virginia owe two-thirds of the statewide $110 million to the Retirement Board for early retirements.
Some of those counties wanted the state to lower the interest rate, he said, but others who did not take advantage of the one-time early retirement option said ``What's in it for me?'' Cox said. The result is that the region presented no united front to get the rate lowered, and no bill to do so has been introduced in the General Assembly.
At 8 percent interest, Pulaski County would have to pay more than $4 million to amortize the $2.7 million retirement incentive costs in 10 years. The cost would be nearly $5.6 million over 20 years and more than $7.3 million over 30 years.
The situation is expected to be on the discussion agenda at a joint meeting next Monday between the School Board and the Board of Supervisors.
In other business, the supervisors voted unanimously against a zoning change that would have allowed a game room to continue operating in the Robinson District on Alum Spring Road (Virginia 636).
Roy Boyd, who has operated a pool and game room there since May 1992, had requested the rezoning from R-1 residential to CM-1 commercial. He said he had not realized he was operating the game room illegally.
The property is owned by Fred and Donna Bond. Fred Bond, an auto mechanic working in New Jersey, said he had planned to retire and come back to Pulaski County and operate the game room. He had operated it before he moved, and it had closed down until Boyd leased it.
Supervisors Chairman Jerry White, who represents Robinson District, said no grandfather clause applied because Bond had operated it as a general store - even though it had a pool table and video game - and it had closed for a period before reopening as a game room.
Neighbors complained of noise and traffic and presented petitions opposing the rezoning. ``That's one of the reasons you have zoning,'' White said. The board upheld the county Planning Commission's recommendation to deny the rezoning request.
The board also voted to ask Bell Atlantic to hold a public hearing on expanding local telephone service beyond Pulaski County's borders.
The telephone company is looking at the feasibility of adding Pearisburg, in neighboring Giles County, to Pulaski County's local calling area. But the supervisors agreed with Rudy Rash, a citizen who requested the hearing, that Pulaski County would benefit more with local calling to Montgomery County instead.
The supervisors chose a county seal design from among several versions submitted by local artists. The one preferred by the board shows the Old Courthouse clock and steeple inside a circle, along with the words "Excellence," "Vision" and "Pride."
The board passed resolutions in memory of retired lawyer Philip M. Sadler, who died recently and who had helped organize many humanitarian community agencies; in appreciation of all public and private agencies and volunteers who provided assistance to county residents during the February ice storm; and for the work by Melinda Zalecki as Pulaski County Public Library director since Nov. 1, 1978. Zalecki will move from the area because of her husband's job transfer.
by CNB