ST. LOUIS • Retirement costs for city police officers are poised to rise by a record $8 million this coming fiscal year. And that leaves the Board of Police Commissioners, set to meet today, with at least a $3 million shortfall in the department's $168 million budget.
Some fear such a gap could lead to salary cuts, benefit cost increases or even officer layoffs.
The staff of Mayor Francis Slay, who sits on the police board, said layoffs should be the last resort. There is still plenty of time for the board, the chief and the city to deal with the shortfall. "It's too early to say layoffs," said Jeff Rainford, the mayor's chief of staff.
He said the mayor's office is meeting with the union, the police board and the pension system to come up with solutions.
"In the past, they've said, 'This is your problem.' Now, they're saying, 'This is our problem,' which is very encouraging," Rainford said. "I do believe this is solvable this year. Next year's another story."
The shortfall came to light in an actuarial report on the Police Retirement System of St. Louis, a state-governed organization that administers officer pensions. Last month, actuaries told the system's board that costs to city taxpayers would need to grow by $8 million this coming year, plus an additional $6 million next year.
City costs — which were $103,000 in 2001 — would rise to $31.6 million for the 2013 fiscal year beginning July 1, and $37.5 million the year after.
And while the police department is also governed by a state-appointed board, the majority of its budget is funded, by law, by the city.
Slay's office, fighting similar cost increases in the fire department, has recently required the fire and police departments to absorb their own ballooning pension cost increases.
And that puts police funds at least $3 million shy for the coming budget, including other increasing expenses: an estimated 10 percent increase in health insurance premiums, $2.9 million in raises covered by the department's first-ever collective bargaining agreement, plus the end of a grant covering the salaries of 65 officers.
A police department spokeswoman said Chief Dan Isom was not available to comment on the budget. After a City Hall meeting earlier in the day, however, he said he worried about the pension cost increases. "It's certainly something people are talking about a lot," he said. "People are trying to make sure we have pensions for everyone, long-term."
Pension benefit cuts, he said, could make it harder to hire and retain cops. "People stay here long-term because of pension benefits," he continued. "It's not because of the pay, because our pay is lower than most police agencies in St. Louis and in the region."
Jeff Roorda, business manager for the St. Louis Police Officers Association, said he certainly hopes the board will avoid cutting officers. "The last thing we want to see is cops getting laid off," he said. "That ought to be a doomsday option because it's bad, bad, bad for the people of St. Louis and their personal safety to have fewer cops out there."
He also said he's hearing some concerns from officers who believe the city wants major cuts to police pensions, similar to those now proposed for firefighters.
"Certainly, that's the fear," Roorda said. "I think it's pretty clear from a per capita level, our pension's not as big a drain on the city budget as (the fire department's pensions). There's not the same direness."
But the police pension board has already moved to make major changes to retirement for new officers. On Jan. 31, the board voted 5-2 to propose a new bill at the state Legislature. If passed and signed into law, the measure would increase member contributions to 9 percent from 7 percent, end the practice of returning such contributions to officers at retirement, institute a minimum full-retirement age of 55 (or 25 years of service), limit cost-of-living increases and cut annual pensions to 70 percent from 75 percent of final average compensation, among other things.
Police officers are overwhelmingly against the changes, Roorda said, calling the pension fund losses a "manufactured crisis."
"The market is going to get better and they won't be able to say, 'The sky is falling,' anymore," he said.
Without the blessing of the officers association, such pension changes are unlikely to get support from state legislators.
Steve Olish, executive director of the police pension system, said the groups are continuing to meet.
Christine Byers of the Post-Dispatch contributed to this report.