By SUE SUCHYTA
Sunday Times Newspapers
TRENTON – Fire Chief Dean Creech was challenged by Councilman William Lefevre May 15 about the impact on future pension costs if firefighters receive overtime pay to install free grant-provided smoke detectors.
The city is currently using earlier grant money to provide free smoke detectors for low income residents, seniors and people with special needs, which are installed by firefighters on an overtime pay basis.
Creech asked the council to approve his application for a second grant, which was followed by Lefevre’s voiced concern that the overtime money earned by high seniority firefighters could impact the legacy cost obligation of their pensions to the city.
The deadline to apply for the upcoming grant was May 19, which Creech said is similar to the grant the city was awarded last year for the purchase and installation of smoke detectors which continue to be installed.
“This new grant would actually go a nice step further and include carbon monoxide detectors,” Creech said. “What we found is about 80 percent of the residences that we have been in so far either don’t have functioning or don’t have sufficient carbon monoxide detectors in their residences, so we are going to try to add that to the grant and hopefully it will get approved.”
He said the Fire Department would try to purchase a combined smoke and carbon monoxide detector if awarded the grant.
Creech said he was seeking permission to apply for another grant, which the council could decline to accept if it is approved.
Lefevre said he had looked at the packet, and he wants to know the actual cost to the city if it accepts a grant.
“I hate to use the word ‘flabbergasted,’ but I was,” Lefevre said. “I want to know all the facts, I want to know the cost to the city. I don’t feel comfortable voting for this until somebody can tell me the real cost of this program.”
Creech said the city’s share of the grant is 5 percent, and the proposed application is for a grant similar to the award the city is currently using. He said the grant provides funding for equipment and the labor to install the detectors. He said the labor component is fully funded by the federal government.
“We budgeted for 139 percent of their pay,” Creech said. “There is a 39 percent benefit dollar added in to account for the pension liability. And just so you understand, in the 28 firefighters that we have, there are only six or seven people impacted in any way, shape or form. Our post-1996 employee, it doesn’t impact their FAC one bit, but we are still taking the 39 cents on the dollar.”
FAC is the final average compensation that determines the defined benefit plan when an employee retires.
Firefighters are paid time-and-a-half when they are working overtime, Creech said, and whether or not the employee is a pre- or post-1996 employee, the grant is still supplying the premium for the benefit dollar.
“We can only put away pension money based on what the actuary says is the cost of providing that money for the next 20 or 30 years,” Creech said. “If we weren’t doing that, it would be different. But the money is there.”
Creech said 25 to 50 percent of the grant will likely be spent on labor to install the detectors.
Leferve said he thought the estimate was unrealistic.
Creech said he didn’t want to sound condescending, but he doesn’t know if Leferve understands how an actuary works in estimating pension costs.
Leferve said the reason the city doesn’t have a seat belt enforcement fund is because he complained about its impact on future funding obligations.
“I looked into it and it was astronomical,” Lefevre said.
Creech said the overtime paid to install detectors could in some cases raise the FAC. He said if he spends $20,000 in labor, you can take 40 percent off it that is set aside for benefit dollars. So the actual labor cost is $12,000, and of the 27 potential firefighters who could be working, only 22 percent of them are eligible to have any type of FAC increase.
“So that gives you an idea of the amount of dollars,” Creech said. “If one person worked all of it, I could tell you exactly how much it is going to cost. But I can’t. I have a mix of people that are working it right now.”
Creech said he could not exclude the firefighters who are eligible for the FAC increases.
“You are treading a line on fair and equal treatment among your employees,” Creech said.
(Sue Suchyta can be reached at [email protected])