Bad financial decisions could threaten the retirement benefits of hundreds of workers in Bridgeton, and could cause higher tax bills for thousands more. That's according to a scathing new report from the Missouri State Auditor, who just wrapped up an investigation into the Bridgeton Employee Retirement Plan.
The 26-page audit gives the city's pension plan a "poor" rating, citing a $14 million shortage and poor management by the city.
“Part of our problem was during the recession in 2008-2010 investments that the pension fund had been put into did not return the yield that we thought it would,” said mayor Terry Briggs.
He says the city also lost a lot of revenue during that time, causing the previous administration to make a difficult choice.
“Can we defer a contribution to the pension plan for a while? That continued on for a couple of years and that was the problem.”
But the audit also found the city's finance commission didn't meet at all from 2012-2014 and that city officials made little effort to share information on the plan's financial troubles with the people who would be directly impacted.
State auditor Nicole Galloway says changes must be made immediately in Bridgeton.
“Hard-working folks will depend on these retirement benefits when it comes time and they may not be there if the plan is not appropriately funded.”
Briggs says in fiscal year 2016 the city invested $1.2 million in the pension plan and next year the amount will grow to $1.4 million.
To accommodate the higher contributions Briggs says the city will cut back on spending in areas that won’t affect public services.
“If you were guaranteed that pension, you're going to get that pension. We'll have to scrape and come up with other means. But I think we're on the path now that we've got a set plan that we're going to increase our contributions to the point that we can make it a fully-funded plan,” said Briggs.
The good news, according to Briggs, is that not pension payments have been delayed or reduced.
The city's credit rating was downgraded as a result of the audit. That meaning any future bonds taken out by the city could come with higher interest rates, costing taxpayers more money. Briggs says the city will do everything possible to avoid future debt.
Bridgeton resident Ron Kujawa was disappointed in the credit rating news, but doesn't fault the previous administration for its decision.
“At the time nobody knew what the future holds. So, if they're putting the money away now I’m sure as soon as they can get the pensions funded properly we'll get upgraded again.”