GRPD, FD pension estimate off by $968k

GRAND RAPIDS, Mich. (WOOD) - Costs for police and fire pensions were wrongly estimated, Grand Rapids Mayor George Heartwell said, adding to an already-stressed budget and meaning that the city may have consider laying off some police officers.

Heartwell said a Tuesday the city found out Thursday that original costs were underestimated by more than $900,000. The discrepancy was found after a different equation was used in a final pension analysis.

The mayor said that the city is not allowed to lay off any police or fire employees until Dec. 31 under its current police grant. But Heartwell said that the city will have to consider layoffs come Jan. 1, 2013.

"We certainly may have to consider laying off officers unless the police chief can come up with some other innovative approach to solving this budget deficit," Heartwell told 24 Hour News 8 on Tuesday..

Chief Financial Officer Scott Burher told 24 Hour News 8 Wednesday he would have liked to have had a better idea of what the actual numbers were going to be in December 2011 when he had to start working out the budget.

But the firm responsible for completing the actuarial report couldn't provide the figures then because they didn't have all the data. So, like always, he said, he was forced to make an estimate.

And according to Burher, in terms of percentages, he wasn't that far off. His pension fund estimate came out to 19.73%, compared to the actuarial report of figure of 20.26%.

But in terms of money, that's an underestimate of roughly $968,000.

Heartwell said that difference, combined with the fact that the police department is already falling short of budget goals, could lead to officer layoffs.

"Many departments have met their targets their interim targets," said Heartwell. "Some departments have exceeded their targets. The police department has missed it now by about $2.3 million this year."

Heartwell said the clock is ticking. In 2015, the income tax rate reverts back to 1.3% and the city will collect $9.7 million less. That means everyone has to cut and sacrifice now, he said.

"We have to transform city government," Heartwell said.

Grand Rapids Police Chief Kevin Belk said the department is making cuts. It helped form the Kent County Dispatch Authority, bringing in about $1.5 million to the city. It also replaced infrastructure and cut officers' hours.

"Some expenses that would have otherwise been part of the city expense that would have come out of the police department budget are now being paid for by other funds," Belk explained.

Belk said moving forward, consolidation is key. He said the city may consider combining aspects of police and fire within the city and partnering with neighboring municipalities to save money -- not just cutting officers.

"I have the responsibility for the safety and security of the community, the police response out there in the community," said Belk. "We have to make sure that our officers are safe and that we have an adequate number of officers to respond to emergencies that occur throughout the week. So those are responsibilities we have to continue to try and balance."

Belk said the GRPD budget for the upcoming fiscal year, which starts July 1, is about $45 million.

He also said that losing more officers would be a great sacrifice for the department. It already loses at least 10 or 12 each year through normal retirements and attrition. Since he took over in 2008, he said, the department has lost almost 40 officers.

There are currently 296 officers on staff.