Fayette County

LFUCG pension appeal denied

The state Supreme Court has denied the Urban County Government's appeal of a lawsuit over its contribution to the police and fire pension fund.

The denial means the city will probably have to pay at least $30 million to the pension fund, which faces an unfunded liability of more than $246 million. But the city has already developed a plan to finance back payments to the fund.

Earlier this week, the pension board agreed with a plan presented by Mayor Jim Newberry to sell $70 million in bonds to help eliminate the unfunded liability.

"We would hope that the $70 million would cover any judgment from this case," said Susan Straub, a spokeswoman for Newberry.

In 2003, several police officers sued the city, saying it had not contributed enough money to the pension. Police and firefighters contribute a portion of their pay to the fund and the city contributes a portion of its total public safety payroll to the fund. The pension board sets the city's contribution rate on the recommendation of an actuarial analysis.

In the lawsuit, the city argued unsuccessfully that the pension board is responsible only for calculating part of the city's contribution rate.

For many years, the city paid only the minimum amount required by law — 17 percent of its public safety payroll — even if the board set a higher rate.

In 2006, Fayette Circuit Court Judge Gary Payne ruled that the city had to contribute at the rate the pension board decided. The state Court of Appeals later upheld that decision. On Friday, the state Supreme Court declined to hear the appeal.

Tommy Puckett, a, former pension board member who was also a plaintiff in the lawsuit against the city, said the city could owe at least $30 million in back payments for the four years covered in the lawsuit. The case will now go back to Fayette Circuit Court, where a judge will decide how much money the city owes.