City Council adds retirement to legislative agenda

Lynchburg City Council decided to press forward Tuesday with efforts to gain more control over its employee pension plan in an effort to drive down costs.

Officials expressed hoped that this would become the start of a regional or even statewide campaign as many communities that participate in the Virginia Retirement System, a state-run program, are struggling with escalating rates.

“I hope we can address this with full force and vigor,” said Councilman Jeff Helgeson, adding the city is already pouring money into the program “by the bucketful” and its burden will only increase with time.

Lynchburg is currently required to pay the equivalent of about 23 percent of its eligible payroll to VRS, which city officials believe is the highest rate in the state.

Councilman H. Cary said the situation was unsustainable and could hinder the city’s efforts to address other costly issues, such as Heritage High School, if it continues.

“We need to be leaders here rather than sit back and watch what others do,” he said, alluding to past suggestions that the city wait and see how proposals created by other communities work out. “I’d rather be proactive than reactive.”

Council voted to add a plank about VRS to its legislative agenda, which sets out the key issues the city plans to advocate in the next General Assembly session.

The new language asks that localities be given more freedom to control their VRS benefits. Currently, once a community opts into a certain benefit, it cannot be dropped without General Assembly authorization — a caveat that several council members complained was “hamstringing” them in their quest to cut costs.

In Lynchburg, any decision to eliminate optional VRS benefits will likely have a disproportionate effect on police officers and firefighters as those employees currently enjoy more generous retirement plans than non-public safety officers.

Council wrote one specific VRS proposal into its agenda, requesting permission to expand a 5 percent cost-sharing option introduced earlier this year for new hires to all city employees.

Council expressed strong interest in joining forces with other communities on that point, noting the local General Assembly delegation has a powerful advocate for the proposal in Del. Lacey Putney.

In the 2010 session, Putney successfully introduced a bill that would have allowed a locality to require all of its employees, regardless of the date of hire, to contribute up to 5 percent of their salaries toward their VRS costs.

Gov. Bob McDonnell amended the bill to limit the change to new employees hired after July 1.

“I think we should certainly get behind (Putney’s proposal),” said Councilman Turner Perrow, describing the longtime state delegate as a “strong horse.”

Mayor Joan Foster suggested that Region 2000 could be tapped to advocate for change as part of a coordinated effort on the part of the greater Lynchburg area.

“That’s a stronger voice,” she said.

City Manager Kimball Payne noted that other communities sometimes develop signature issues that they become strongly identified with across the state. VRS reform could become Lynchburg’s if officials wanted to commit to it.

“It will require some energy from elected officials, because, quite frankly, your voices are more powerful than ours,” he said, referring to city administrators and a lobbyist that council employs to advocate for its interests in Richmond.

Other issues added to council’s legislative agenda include: closing a tax loophole on online hotel bookings; clarifying whether sweepstakes games run by Internet cafes qualify as illegal gambling; and restoring funding for substance abuse treatment programs.

On a split decision, council did not include a proposal for additional restrictions on payday lending, which is often criticized as predatory.

Council had supported previous efforts to clamp down on that industry in 2008, but this year a majority concluded it was an unnecessary addition that would water down their agenda.