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TUESDAY, DECEMBER 13, 1994 <br /> <br />Council considered adoption of a Resolution that would provide, City <br />retirees, present and future, a 3% retirement allowance increase. City <br />Manager Reynolds stated the City had been notified that, as a result of <br />a settlement between the State and Federal retirees which resulted in <br />the retirement benefits for members of the Virginia Retirement System <br />being subject to State income taxation, the Governor and'Legislature <br />approved a 3% increase in benefits for "State" employees to offset the <br />tax burden. The legislation providing for the increase gave local <br />governments the option to provide and pay for the 3% increase for local <br />government employees. In response to a question by Mayor Adams, <br />Finance Director Richard D. Fitts said the annual cost of approving the <br />increase would be $103,000 based on the June 30, 19'94 payroll. If the <br />Resolution were adopted, the City would be obligated to begin paying <br />for the 3% increase on July 1, 1996. In response to a question by <br />Councilman Teague, Mr. Reynolds stated that there is no deadline to <br />adopt the Resolution. Council could, therefore, make a decision on the <br />matter in con3unction with consideration of an annual budget. Mr. <br />Reynolds said the only stipulation for local governments is that, if <br />the Resolution is adopted prior to January 1, 1995, current retirees <br />would receiye the 3% increase retroactive to October 1, 1994, the date <br />on which ~he increase was effective for ."State" employees. Several <br />Council "members expressed concern regarding possible legislative <br />initiatives in the 1995 General Assembly which may result in the State <br />optingto fund the increase for all VRS participants. Several Council <br />members also expressed concern that this issue needed to be dealt with <br />at the same time as consideration of the annual budget. Upon motion, <br />duly seconded and by a 'vote of 4-1 (Councilman Williams opposed), <br />Council voted to consider this matter as a part of its FY 95-96 Budget <br />process. Upon motion, duly seconded and by unanimous vote, Council <br /> <br /> <br />