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St. Clair contributes extra $45K to pension fund

Warren Rothe, St. Clair city superintendent, at the Feb. 3 council meeting.
Warren Rothe, St. Clair city superintendent, at the Feb. 3 council meeting.

By Jim Bloch

The pension fund for employees of the city of St. Clair is nearly $50,000 richer, thanks to an unexpected contribution from the city.

“Before you tonight is a budget amendment that will accomplish a purpose of making an additional payment into our pension system,” said City Superintendent Warren Rothe, addressing the city council at its regular meeting on Feb. 3.

In addition to its revenue stream of permit fees, the building department in recent years has been augmented by transfers from the general fund. For fiscal year 2019-2020, the general fund contribution to the building department was $45,000.

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“With all the increased building activity in town — with the St. Clair Inn and the apartments on Clinton Avenue — last year, building fund revenues exceeded expenses by just over $100,000.”

The final amount was a budget surplus of $104,596.

“Instead of transferring $45,000 from the general fund into the building fund, I think essentially what we should do with that $45,000 is contribute to our pension plan, which would be a contribution above the actuarially required amount,” said Rothe. “That would go right into the assets and starting earning returns.”

Tom McCartney, city council member.
Tom McCartney, city council member.

The city made a $250,000 payment last year into the pension fund.

“This means we would have contributed about $300,000 above the minimum amount,” said Rothe. “I think it would be a fiscally responsible use of these funds.”

The city of St. Clair filed a plan of correction with the Michigan Department of Treasury in May of last year to bring its underfunded pension plan into compliance with state regulations. The state mandates that municipal pension plans be funded at 60 percent or higher under Public Act 202 of 2017; the city’s pension plan is funded at 57 percent.

Councilmember Steve Ellery noted that the money was intended for the building fund, not the pension plan. “Can we do that?” he asked.

“Yes,” said Rothe.

Councilmember Tom McCartney made a motion to accept the budget amendment and make the subsequent transfer, supported by member Butch Kindsvater. It passed by a 7-0 vote.

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