In February of each year, the Texas Municipal Retirement System (TMRS) sends retirees a statement reflecting their account status. This statement shows the annuity amount, withholding and amount of cost of living adjustment (COLA), if any, for the current year.
In February 2018 when the annual statement arrived, it showed the annuity amount would remain unchanged from 2017. This was a result of action taken by the City Council in the summer of 2017 as they were preparing and approving the budget for the 2017/2018 fiscal year which ran from Oct 1, 2017 to September 30, 2018.
No one had bothered to inform the retirees that the change was even being considered, let alone that it was on the agenda for the September 5, 2017 regular monthly meeting. To make matters even worse, it was listed on the agenda as “Approve Ordinance No. 2017-0-10 authorizing an Updated Service Credit with the Texas Municipal Retirement System”. The consent agenda is supposed to contain mundane, non-controversial items such as previous minutes. This may have been an attempt to hide it even further from the public.
“Authorizing an Updated Service Credit with the Texas Municipal Retirement System” is double talk for eliminating the cost of living adjustment for retirees.
This obscure “consent agenda item” did get some attention at that meeting when it was requested to be removed for discussion. An attempt was made to “not approve Ordinance 2017-0-10 and place the credit back into the budget.” This motion died for lack of a second. The Ordinance was then passed with only one opposing vote.
The only excuse ever offered for eliminating the COLA was that the City couldn’t afford to keep funding it. During that same September 5, 2017 council meeting, the Finance Director reported that at the end of July, 2017 revenue was $335,000 ahead compared to the prior year due to property taxes, intergovernmental grants and service charges. There were still 2 months to go in the fiscal year, but things were looking good.
On top of this, the Council increased the effective tax rate for 2017 by 8.08%, made possible by increased property valuations by the Erath County Appraisal District.
Why couldn’t the City afford to continue the COLA for the retirees?
former city of Stephenville employee