Maintaining a high standard of safety services is a costly endeavor. Combined, the divisions represent approximately half the City’s workforce and general budget each year. The equipment and training required to make our Police, Fire and EMS response teams the best they can be is extensive. And yet, the City is able to provide an exceptional level of safety services at one of the lowest costs per capita compared with similar Ohio communities.
History of the Police & Fire Pension Levy
By Ohio Statute, the City is required to fund the equivalent of 19.5% (Police) and 24% (Fire) of gross wages to support the Police & Fire Pension Fund. The City has funded its Police and Fire pensions through property tax for the past 45 years, with residents voting to approve nine, five-year ballot issues. All previous levies have been set at or close to 1.0 mills. The Police & Fire Pension Levy issue before voters has been placed on the ballot to renew the existing levy, but at a reduced rate (see the table above for a summary).
Many communities in Ohio have traditionally used a combination of permanent and voted property tax levies to help fund their safety services or their required contribution to the Police & Fire Pension Fund, since it provides a predictable, fixed source of income for safety forces’ pensions.
What the Levy Funds
The proposed levy will fund the state-mandated retirement and disability fund for the City’s police and fire personnel for a period of five years. If approved, 100 percent of the proceeds will be dedicated to the Police & Fire Pension Fund.
Approximately 8% of the property taxes paid by Upper Arlington residents is received by the City. The Police & Fire Pension levy is counted as part of this. The majority of your property taxes support the Upper Arlington Schools, Library and various Franklin County levies.
How the Reduction is Possible
The City is projecting that the police and fire obligation over the life of the proposed five-year levy will total approximately $16 million, or an average of $3.2 million per year. This is an increase from the previous levy projection of $13.4 million ($2.7 million per year).
Despite this projected increase, Staff believes the reduction can be accomplished due to a growing cash balance in the Police and Fire Pension funds, which has increased from $928,000 in 2015 to 3.16 million in 2020. The increase is the result of a combination of factors:
- Over time, actual pension expenditures have been less than projections
- Strong property valuation increases have generated higher revenues on the City’s permanent millage
- In 2020, the City was able to direct a significant portion of CARES Act funds from the pandemic to support police and fire salaries and pensions
Since these reserves can only be used to support police and fire pensions, it makes sense to lessen the levy renewal amount being asked of voters, while still maintaining a reasonable reserve.
Watch for additional information from the City on Issue 24 in the count down to the November 2 election. If you have questions about the 2021 Police and Fire Pension Levy, please contact our Finance Department, at [email protected].