Quantcast


Last updated: August 17. 2014 3:46PM - 935 Views

Story Tools:

Font Size:

Social Media:

By Ron Gregory


ronjgregory@gmail.com


Although the Governmental Accounting Standards Board approved rules in June 2012 requiring a change in reporting pension plan accounts by local government, most state and Southern West Virginia officials think the plan will have little impact on them. Most city and county officials said they have been working diligently to make sure government-operated pension plans are solvent and have had little time to consider Statement Number 67 and 68, as the changes are labeled.


Still, sources such as Charleston Mayor Danny Jones and state Retirement Board Chief Fiscal Officer Darden Greene expect the local impact to be minimal.


GASB maintains the new rules will “reflect substantial improvements to the accounting and financial reporting of pensions by state and local governments and pension plans.” While nobody locally disagreed with that assessment this week, few had felt a need to act on the changes which do not technically take effect until 2015.


Darden said his office is preparing a letter to go out to most governmental entities in West Virginia informing them of the new reporting requirements.


Jones said his city has faced tremendous unfunded liability problems with pensions in the past, chiefly related to police and fire systems. Jones has been in the news recently for proposing a one-half percent increase in the city sales tax to help offset some of the pension costs. The mayor said his city has already anticipated the requirements of the new rules and considers outstanding liability in calculations.


“I think we are implementing policies that will one day make the system solvent,” he said in an exclusive interview. “Will it happen in my lifetime? Probably not, but at least we have identified a problem and we’re working to solve it.”


Jones said other changes in the pension plans for the city will also help reduce the burden. “But, to begin with, you have to have funds to pay for something. That’s why we have to increase our revenue stream.”


The mayor said there are other municipalities throughout the state in far worse shape financially concerning their pensions. “Some have considered (filing) bankruptcy,” he said. “Charleston is not nearly in that situation.”


Jones said the city manager and other officials are working closely with state and federal authorities to make sure all rules are complied with. He said he has spent little time considering the new GASB reporting requirements. “That will come next year,” he said, “and we’ll comply.” Jones said he was not certain that the new requirements will assist the city in handling its pension funds and he is also not sure it will require any information not already available from his city.


“We already know where we stand,” he said. “We’ve been working on this from the time I took office (11 years ago). There’s not much more information we need; we just need the revenue to pay for the pension plans.”


Greene agreed that the new reporting requirements should impact local government very little. He said there should be no adverse reactions concerning the issuance of local bonds. “It is not as if some new debt is being created,” he said. “It isn’t. It is just being reported in a different way. Lending institutions already know the financial condition of towns, cities and the state.”


Mingo County Clerk “Big Jim” Hatfield said he had been “so busy with elections and other business of the office, we haven’t concentrated on something we’re not required to do until next year.”


Nevertheless, Hatfield said his office “and all the other public officials will comply.” Like Jones, Hatfield said he isn’t sure how the new procedures will help in budgeting. “That’s what the federal government says but we’ll see,” he added. The clerk said his office has made no effort to calculate numbers for next year’s budget.


“In West Virginia, the budget is approved from year to year by the county commission. I don’t see how we can calculate where we will stand at this time next year,” said the veteran clerk who has also served as a county commissioner.


Essentially, according to Jeff Fleck at the state’s Consolidated Employee Retirement Board, the new reporting requirements mean government must report the liability for unfunded pensions on an annual basis. The federal government believes that by including that number for budgeting purposes, state and local governments “will be more cognizant of where they stand.” Fleck said his office is “just in the process of getting a letter together to explain what the new rules require.”


Thus, most other municipal and county officials contacted said they were unaware of the provisions of the new rules. Danville Town Manager and House of Delegates member Josh Barker said, “I don’t think anybody has worried about that yet. There are too many pressing concerns, like job losses in the coalfields and safe drinking water, taking up our attention.”


Greene noted that his board administers nine different retirement programs for local governments. “The impact will be minimal at the most,” he said.


Overall, GASB says its changes will “establish new accounting and financial reporting requirements that reflect substantial improvements to the accounting and financial reporting of pensions by state and local governments and pension plans… . It is designed to improve the decision-usefulness of reported pension information and to increase the transparency, consistency, and comparability of pension information across governments.”


The new statements replace the requirements of Statement Number 25 and Statement Number 27.


Local officials throughout the area are united in agreeing that they will implement the rules when they become effective. But those like the Charleston mayor feel the situation has already been addressed by their community. “We know where we stand with regard to pensions right now,” Jones concluded.


Comments
comments powered by Disqus



Featured Businesses


Poll



Info Minute



Gas Prices

Williamson Gas Prices provided by GasBuddy.com