Proposition R
Q and A
Q: What is Proposition R?
A: Proposition R is an April 4 ballot issue that asks voters to approve an 8-cent property tax to
increase retirement funding for Webster Groves police, fire, and non public safety staff.
Q: If approved, how will this 8-cent increase be used?
A: The City joined LAGERS (Local Government Employees Retirement System), a Missouri nonprofit, in 2013. LAGERS provides various levels of contribution formulas that determine
retirement funding. The 8-cent increase will allow for a better formula for police, fire, and non
public safety employees.
Q: Tell me more about LAGERS.
A: LAGERS is the largest pension system for local government employees in the state. Over
670 member employers belong and it has $6 billion in assets. The pension is funded at 94.7%.
Q: Why did the City join LAGERS?
A: Prior to LAGERS, City employees managed their own retirement accounts. With LAGERS,
employee pension investments are professionally managed rather than managed by employees
who may have limited knowledge about investment strategies. LAGERS ensures some level of
income in retirement.
Q: Do other cities in the area belong to LAGERS?
A: Yes. Many cities in the area belong to LAGERS or another defined benefit plan and provide
the higher formula level that the 8-cent tax increase will enable the City to fund. The cities with
the higher formula can provide better benefit packages for employees.
Q: Is employee retention a factor in asking for the 8-cent tax increase?
A: In 2016, the City lost 21 employees, including 14 in police and fire. The 8-cent increase will
allow the City to offer a benefit package comparable to other cities in the region and help to
retain experienced staff.
Q: Why is retention so important?
A: Retention of staff is cost effective for the City. New employees, particularly police and fire,
cause the City to invest in hiring, testing, training, and specialized equipment costs. When a
firefighter leaves, for example, the City must reinvest in another firefighter who will require
specialized equipment among other costs. Retention also provides experience levels that result
in better responses. With time on the job, police and fire, for example, know the City –
roadblocks that reduce response time, school buildings, and more.
Q: Are police and fire part of the Social Security System?
A: Here is an important issue. In Webster Groves, police and fire personnel do NOT belong to
or contribute to Social Security and as a result cannot count on the monthly income that Social
Security provides. The 8-cent increase will raise the retirement funding formula to a level that
will help to compensate for not belonging to Social Security.
Q: How much will Proposition R cost me?
A: The average home in Webster Groves is valued at $271,000. This means that the additional
cost for the average home owner is $41.19 annually, or $3.43 per month. Homes valued at less
than the average will pay less than $3.43 per month.
Q: I hear about Fire Protection Districts. Why don’t we join one?
A: In a municipal department such as the Webster Groves fire department, fire and paramedic
service is paid for out of the City’s general budget. In a Fire Protection District there is a
separate property tax levy that property owners pay. In some cities this is as much as $3.22 per
$100 of assessed valuation. It is an advantage to property tax payers to retain the municipal
department.
Q: Is the annual cost for LAGERS more or less expensive than the old retirement plan?
A: The cost for LAGERS is less.
Q: Why don’t we just enroll police and fire in Social Security rather than upgrade the LAGERS
formula?
A: An agreement was signed in 1951 that excluded Police Officers and Firefighters from
participation in Social Security. If that agreement changed, there would be some retroactive
payments by both the City and the employees. In addition, it is less expensive to upgrade
LAGERS.
Q: Why does the ballot say that there will be an increase of up to 20-cents?
A: Property owners currently pay 12 cents to fund police and fire retirement. The change to
20 cents allows for the 8-cent increase. The City also has a ¼ cent sales tax for fire funding.