Beckley to use bonds to fund pensions

Oct. 4—The city of Beckley is pursuing a more financially sustainable way to fund the pension plans for city firefighters and police officers.

During its regularly scheduled meeting last Tuesday, Beckley Common Council approved the first reading of an ordinance to utilize bonds to finance the unfunded liability of the Beckley Police Department and the Beckley Fire Department pension funds.

Mayor Rob Rappold said this new avenue for funding pensions was made possible by the passage of a bill by the Legislature earlier in the year which allows municipalities to issue pension funding revenue bonds.

As part of the ordinance, the bonds will be issued by the Beckley Building Commission using unencumbered properties that are owned by the city as collateral.

These unencumbered properties include those which the city has paid off including the Number 1 Beckley fire station on Third Avenue, the Number 2 Beckley fire station on Pikeview Drive, the Beckley Intermodal Gateway and the Historic Black Knight Municipal Park.

"This is a magnificent plan, and we're flattered that the city of Beckley even qualifies to do this because it requires a certain amount of solvency and a certain percentage of liquidity in those funds," Rappold said.

According to the legislation, pensions must be funded to at least 40 percent in order for a city to pursue pension funding revenue bonds.

The only other city eligible for this is Wheeling, which Rappold said closed on its bond program in August.

Rappold said the city enlisted the help of several attorneys who assisted Wheeling in the process. Bond counsel for the city of Beckley includes attorneys from Steptoe & Johnson and Crews & Associates.

Rappold said he credits the dedication of past administration as the reason Beckley is able to pursue such an option to fund its pensions.

He added that had this option not been available to them, future administrations would likely have struggled to keep up with payments to the pensions.

Rappold said this was as a result of a decision made by the Municipal Pensions Oversight Board several years ago, which required municipalities to contribute an additional 7 percent to the pensions each year on top of their regular contribution.

"Each year that rolls around, we have to look at our contribution instead of being 100 percent of what we would normally contribute from the city it has to be 107 percent," he said. "... We projected that in the 10-year range, that amount of money that the city had to contribute was not going to be sustainable to the city."

Several council members spoke in favor of the ordinance during the council meeting, including Kevin Price, a retired Beckley firefighter.

"What we do here at this council in the next six or eight weeks, the councils that will be sitting here in 15 years will say, 'I'm glad they did this 15 years ago because otherwise we could not afford the monies going in,' " Price said.

Council member Robert Dunlap also spoke in favor of the ordinance, saying that securing sustainable funding for the pensions could serve as a way to attract more firefighters and police officers.

"I think this step is making sure that we have a solid benefits program for our employees, especially in law enforcement, is an attractive issue so we can retain and acquire and attract better applicants and keep our talent here in Beckley," Dunlap said.

He added that this plan also highlights the benefits that come from the city owning real estate.

"There have been a lot of people naysaying the city owning certain pieces of real estate," he said. "And you really have to show up and be involved to see that the acquisition of something like Black Knight might have served a short-term benefit, but it also, as everyone can see now, serves a long-term benefit to be something that can be ultimately levied against so that we can fully fund our pension program, and recognizing that very few municipalities have a fully funded plan throughout the entire state."

A public hearing and second reading for this ordinance will take place at 6:30 p.m. Tuesday, Oct. 11, in council chambers.

It is unclear whether the public will be able to attend this meeting in person. The Beckley Common Council meetings have been held virtually since the end of August citing a rise in Covid cases.

During last week's council meeting, council members and city officials met in person in council chambers, but the public was only able to attend virtually.