City condemns VRS changes

Published 9:00 pm Monday, March 26, 2012

The city has reached out to Gov. Bob McDonnell for his help mitigating the impact of a bill that would cost the city $1.6 million annually.

Senate Bill 497, which was passed on the last day of the General Assembly session, requires employees to begin contributing 5 percent to their retirement. In addition, it requires local governments and school boards to give a 5-percent pay raise to cover the required contribution.

The problem for local governments and school systems is that the cost of benefits and the employer’s share of federal taxes would rise with the rising salaries. In Suffolk alone, the mandate would cost more than $1.6 million for the city and school system combined.

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“This legislation puts our city in the impossible position of having to find a source of revenue for these additional costs, as the bill itself offers no state funding for the mandated changes,” City Manager Selena Cuffee-Glenn wrote to the governor last week. “The bill does nothing more than impose costly burdens on local governments, and more importantly, on real estate taxpayers.”

In her letter, Cuffee-Glenn requested a number of amendments to the bill, including amendments that would require it to be reviewed next year, make the 5-percent contribution optional or remove the requirement for a 5-percent raise.

“This is a decision that should be made by the local governing bodies, not by the state,” she said of the latter two requests.

In addition to costing more for localities, the changes also would reduce the take-home pay of employees, costing the average employee in Suffolk $269 over the course of a year.

City leaders discussed the changes during a work session last week, with Budget and Strategic Planning Director Anne Seward condemning the legislation.

“We’re really not doing anything positive here,” Seward said. “It’s a hit all the way around.”

“I think the General Assembly assumed it would be a wash,” interim Special Projects Manager Sherry Hunt said Wednesday. “This piece of legislation is particularly troubling to the city of Suffolk.”

Mayor Linda T. Johnson said the Virginia Municipal League is questioning the legality of mandating a pay raise.

“It really doesn’t do anything for anybody,” she said of the proposed changes.

McDonnell has not yet signed the bill.