ST. LOUIS • Mayor Francis Slay, alarmed by the rising costs of city firefighter pensions and frustrated by years of stalemate in union negotiations, is preparing a new strategy: replacing the expensive firefighters pension system with a new one featuring reduced benefits.

Under the mayor's plan, no firefighters would lose what they have already earned. But the new system would apply to everyone moving forward.

Neither Slay nor his staff would disclose details of the plan. "Something's coming," said chief of staff Jeff Rainford.

But signs of the mayor's strategy have surfaced recently.

First, in April, the mayor hired the Thompson Coburn law firm to provide "legal, logistical and pension planning" services.

Last month, he asked aldermen to postpone hearings on a new bill supported by firefighters, which would make some changes to firefighter disability benefits, saving the city about $1 million per year. Slay's staff said it didn't go far enough.

Over the past few weeks, Rainford has begun briefing aldermen on the mayor's plans.

They would begin, aldermen said, with a renewed effort to come to terms with the union, the International Association of Fire Fighters Local 73, over cuts to the pension's costs.

But if negotiations fail — and Rainford said the two sides haven't reached consensus on pension changes in eight years — the city would move to essentially "opt out" of the current system and start a new agency to govern firefighter retirement, aldermen said.

"Somehow we've got to figure out how to make changes to pensions," said Ward 28 Alderman Lyda Krewson, who said she already met with Rainford. "It's nothing against firefighters. Let's just have a system here we can afford, that firefighters can rely on, and that still provides good fire protection for our citizens."

A public pension trustee in Colorado said the issue facing St. Louis is "an issue many state and local governments are facing, and not a new one."

Lynn Turner, a governor-apppointed trustee of the Colorado Public Pension Plan and former chief accountant for the Securities and Exchange Commission, said many state and local governments have tried to reduce benefits for new hires or give them an option to save for their own retirements with a 401(k) account.

"It is, in essence, a significant pay cut for the employees," he said. "Therefore, employees will be faced with an issue of whether or not they want to work for the city."

Turner criticized systems that added more and more benefits without considering their real costs.

"It doesn't work, it just monetarily doesn't work. What people have been doing for so long with these plans is a Ponzi scheme. You have newer generations paying off (costs) for the older generations."

Ten years ago, the city paid $14 million toward its three pension systems, for firefighters, police officers and civil service employees. Of that, about half went to fire pensions. This year, the city has budgeted $76 million in total for pension payments, including about $24 million for firefighters.

Next year, fire payments will rise to $31 million, according to the city budget division, and total costs to nearly $90 million for all three systems.

Meanwhile, the city has calculated that an average firefighter who retires after 35 years will receive a $484,000 one-time payment from various perks and an annual pension that starts at $60,000 and increases with cost-of-living payments.

Slay and Rainford have been warning of imminent trouble for years, and they have targeted the fire pension system as the most expensive per employee. Their statements have gained urgency over the past several months.

"We have, make no mistake about it, a very serious pension issue," Slay told Post-Dispatch editorial board members and civic leaders at a meeting about city parks bonds last month. "Our most costly pension systems in terms of cost per employee, fire and police, are controlled by the state of Missouri, and they have indicated no interest in doing anything to address those serious issues."

He said: "We're shoveling money into our pension systems. We have to get a handle on that."

The problem is at least partially rooted in an old beef between city and state leaders. Fire and police retirement systems are set up by state law.

And the city has struggled to get benefit cuts passed through the Missouri Legislature, which has historically sided with police and firefighters. Rainford said he cannot recall a time when the mayor has successfully persuaded a state legislator to sponsor a bill on fire pensions.

The city strategizes that a new retirement system, created by city law, could sidestep that problem, aldermen said. It could also substantially cut benefits for some firefighters.

Aldermen said Slay's approach is to leave benefits intact for retirees. Current firefighters would retain their old benefits, but the new system would cover future years. New hires would come in under the new plan.

Aldermen were unclear on exactly what changes would come with the plan. But Rainford did discuss, they said, adding a minimum retirement age, 55. Firefighters currently are vested at 20 years of service, and can retire with some benefits at any point after that regardless of age.

Chris Molitor, president of the International Association of Fire Fighters Local 73, said he had long heard something was coming from Slay's office but had not gotten anything official until last Thursday, when the mayor's operations director, Sam Dotson, told him to expect a letter this week requesting a meeting.

"I hope they show us what they show the aldermen," Molitor said. "Last year, it was straight up bully tactics, trying to force concessions out of us."

Firemen's Retirement System officials said they hadn't heard specifics yet either.

But Daniel Tobben, a lawyer for the system, said he doesn't think the city can, on its own, create a pension system for new or not-yet-vested employees without a state law specifically allowing it.

"This all sounds very speculative and uncertain at this point," Tobben said. "Beyond that, they sound like they are going down a road that may not be legally proper."

Rainford refused to address such concerns. "We're not going to talk about the legal aspects of it at the moment," he said Friday. "That will be laid out in the legislation."

SUPPORT NEEDED

Slay will need at least 15 aldermen to support his ideas. It's unclear, however, how many will.

Joe Vaccaro, alderman in the city's southwestern 23rd Ward, is frustrated that Slay has successfully stalled his bill, which he introduced this session to change firefighter disability benefits and save the city more than $1 million a year.

Slay asked Craig Schmid, alderman in south city's 20th Ward and chair of the Public Employees committee, not to hear the bill until Slay's plan is ready.

"He told me it doesn't go far enough," Vaccaro said of Slay. "Why not let my bill stand, save taxpayer money, and they can introduce their own legislation?"

But other aldermen support Slay's idea, at least in concept, and say changes are necessary.

"Long term, if we don't change the current system, we're going to see a major reduction (in services) for citizens," said Scott Ogilvie, alderman in the city's 24th Ward. "Nobody wants to see that.

"There's a lot of room to negotiate a more workable system."