THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: Tuesday, December 13, 1994 TAG: 9412130301
SECTION: LOCAL PAGE: B3 EDITION: FINAL
SOURCE: BY TONI WHITT, STAFF WRITER
DATELINE: PORTSMOUTH LENGTH: Short : 49 lines
While the City Council is debating a 4-cent real estate tax increase to fund its citizens' dreams of a better image and a brighter future, its retired police and firefighters have asked for a boost to their pension plan that could cost four times that amount.
Retirees have renewed a request they made last spring to have their pensions increased by 1 percent for each year they have been retired, up to 15 years.
For example, a person who retired from the police department before 1980 would receive a 15 percent increase in retirement pay. Anyone who retired in 1984 would receive a 10 percent boost, and those who retired last year would receive a 1 percent increase.
That increase would cost the city $3.2 million for retired police and firefighters, according to the city finance department. Other city employees who are under the old city retirement plan would add $865,000 if they also get the increase.
City Manager V. Wayne Orton, told the council the city could not afford the increase. He later added that the pension plan already includes annual cost-of-living increases.
The city, which is financially strapped, would either have to raise real estate taxes by 16 cents to cover the increase or it would have to borrow the money, said J. Peter Teig, the city's finance director. If Portsmouth borrows the money, the city would have to pay back $320,000 a year over the next 40 years to fund the increase, he said.
Orton has warned the council against borrowing additional money, saying Portsmouth is already using money out of its day-to-day budget to pay off the interest cost of long-term projects.
In his recommendations for the building budget, Orton recommended a 4-cent increase in the real estate tax rate to fund economic development initiatives. The increase would raise $1 million a year to pursue such ideas as upgrading the midcity area; a new commerce park near Tower Mall; or a harbor and festival place at the end of High Street.
The council is set to vote on the pension plan tonight at 7 p.m. It will also hold a public hearing on the building budget.
KEYWORDS: PORTSMOUTH CITY COUNCIL RETIREES FIREFIGHTERS POLICE
PENSION by CNB