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DiVittorio: Dedicated fund protects retirement benefits

Posted: Wednesday, June 24, 2020 | Views: 4078

DiVittorio: Dedicated fund protects retirement benefits

The following is a statement from Hammond City Councilman Sam DiVittorio, Council District 4:

Nobody proposed or suggested defunding the Police department. Nobody proposed denying any City employee their vested retirement benefits. Putting the money into a dedicated fund for Vested Leave Benefits protects the money it does not jeopardize it. DiVittorio questions Administration and Department opposition to putting lockbox fund for Vested Leave Benefits to provide for obligations owed to employees upon retirement.

I am tired of the unfounded false accusation that I am anti-police or that anyone wanted to defund the police. I come from a law enforcement family, both of my uncles were Baton Rouge Policemen. I want to see the safety and security of our City protected. I ran on and support tough on crime polices and continue to hold a tough on crime position, which is why I want to City to get the most for its law enforcement dollars during the unprecedented times of uncertainty. The Administration predicts City revenue will remain the same as last year, $40,778,489. That prediction was made before businesses started closing down again and without knowing whether SLU, will have students on campus this year. The Police Department Budget, $10,328,643, is equal to approximately 25% of the City’s revenue for the year. A 9% increase over the prior year despite no expected increase in revenue. That means a bigger portion of City revenue will be spent on the Police Department, not less. Total dollars to the Police Department went up and total share of the City revenue to the Police Department went up.

According to the 2019 annual audit filed with the Legislative Auditor City employees were owed approximately $4,756,341 in vested leave benefits. That is a 4.5% increase since 2017. The City currently has no reserve set aside for this obligation. These are undeniably owed to employees. They cannot be removed by this or any council. This obligation is not a cash obligation until the employee retires and must be paid for their unused leave. Therefore, it is not necessary that 100% of the potential obligation be set aside, but there should be some protected set aside. The Administration proposed budgeting approximately $300,000 under “administrative payroll” under the Police Department allegedly for expected retirements. However, the employees that the Administration and Department have claimed are retiring this year have denied that intention to me. This does not protect those funds. Under the Administration’s proposal if the employees do not retire by the end of the year it goes back into the general fund. Also, under the City Charter the money can be moved around within the Police Department without Council approval. Denying anyone their benefits was never suggested.

The Council proposed creating a new “Vested Leave Benefits Fund” to provide and protect funds to satisfy a portion of the $4,756,341 in obligations that City has incurred. Putting the $300,000 into the fund lockbox preserves it for those obligations beyond the current fiscal year and prevents it from being used for other expenses without an ordinance approved by the Council and Mayor. Putting the money into a fund lockbox protects it, it does not jeopardize it. So I am wondering what is this money actually intended for if the Administration and Department are opposed to protecting it in a lockbox fund to provide for the vested leave benefits as claimed. Under both the Administration and Council proposal the funds are available when an employee retires. However, only under the Council plan would those funds be protected for the future if they do not retire this fiscal year and from transfers during the year. I suppose only time will tell how those funds will be used by the Administration and Department since they were not placed in a lockbox fund.
20 AD NYL Gary Sandifer
20 AD NYL Gary Sandifer
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