Fayette County

Lexington could be on the hook for millions in back payments to police, fire pension

The city of Lexington might have to pay millions of dollars extra to its police and fire pension fund after the state’s highest court denied the city’s request to hear its appeal.

A three-judge panel of the Kentucky Court of Appeals ruled in November that Lexington might have to pay millions more into its police and fire pension fund. The unanimous decision reversed an earlier Fayette Circuit Court ruling.

The full Court of Appeals denied the city’s request to rehear the case, as did the Kentucky Supreme Court on Wednesday. That means the issue now goes back to Fayette Circuit Judge Ernesto Scorsone, who must determine how much the city owes the pension fund.

“It could be as high as $25 million,” said Tommy Puckett, a retired Lexington police officer and pension board member who sued the city over its 2011 payment into the pension system.

Kenny Bishop, a spokesman for the city, said the city had not yet had an opportunity to review the state Supreme Court’s decision. The city as a policy does not comment on pending lawsuits.

At issue is whether a 2013 agreement between the city and police and firefighters to shore up the underfunded pension system meant the city had to contribute its 2011 payment into the fund. The city’s attorneys argued that the 2013 agreement covered all previous city contributions, including the 2011 payment.

Puckett and Mario Russo, who filed the lawsuit on behalf of police and firefighters, have argued that the 2013 agreement didn’t cover the 2011 payment, which the city had estimated at $16 million. A forensic accountant hired by police and fire estimated the payment at $19 million, but that figure doesn’t include interest.

The city recently paid Lexington firefighters $17.5 million as part of a settlement in a separate lawsuit over back overtime payments and pension contributions. The city used money from a surplus account to pay that settlement. The city will have a surplus again for the fiscal year that ended June 30, but the amount of that surplus has not yet been determined.

Beth Musgrave: 859-231-3205, @HLCityhall