Nitro City Council decided Tuesday to use excess funds from its police and fire pension plan to pay for a new garbage truck, thereby avoiding six years of loan payments and interest.
City Treasurer John Young said he recently discovered the city had paid into its pension plans five months in advance, and therefore does not need to make another payment until July 1, 2014.
As a result, the city has about $156,000 more than budgeted for the fiscal year.
The city has already ordered the garbage truck, and expects to receive it in 75 to 90 days, Young said. The truck will cost $126,543.
The city will still have about $30,000 left from the excess pension funds that it could decide to apply to outstanding loans for police vehicles and a previously purchased garbage truck, or apply to its pension fund. That money will be discussed at council's next meeting.
Young said the police pension fund is about 33 percent funded, and the fire pension fund is about 9.6 percent funded.
A fully funded pension would reflect a hypothetical situation where every employee could draw his or her respective retirement pensions at the same time. But because that situation is not plausible, most entities only partially fund their pension plans.
"We are a lot better than some cities," Young said. "We are making the minimum required deposit the state requires us to do."
Young said that the city is required to pay 107 percent into its pension plan each year over what it paid the year before. He said it is inevitable that the city will eventually be unable to fund its plan at that rate, but it could be decades before that occurs.
The city had already budgeted $1,700 monthly for the loan payment for the truck and Ward 3 Councilwoman Laurie Elkins said she wanted to see the city spend that money by putting it into a reserve fund for new vehicles. That proposal will also be discussed at the next council meeting.
In other business, council:
The landscaping plan is part of the city's overall economic development plan, and Casebolt said the project is meant to help increase business interest in the city.
"The primary objective is to entice some businesses into that area where there are empty buildings," he said.