by Cindy Goldstein -
A comprehensive analysis of a potential LOSAP (Length of Service Award Program) outlined the deep dive that the volunteer Village Budget Committee took into the various options available and related costs if the Village wanted to provide what is essentially a “retirement plan” to our volunteer firefighters. See HERE.
For the Volunteers
The Village has an all-volunteer fire department (FD), and we all rely on them to protect life and property. Currently there are 195 volunteers ranging in age from 17 to over 65. Consideration of this program was requested by Fire Chief James Barney and could be extended to EMS volunteers if the Village chooses to do so.
Background
LOSAP is allowed under NYS legislation that became effective in 1989. The retirement benefits may be provided either as a defined benefit plan or a defined contribution plan – similar to the standard garden variety retirement plan offered by employers. The purpose is to help volunteer departments attract recruits, retain members and reward volunteers for their risk, time and dedication. The program would be administered by a LOSAP provider.
In Westchester County there are 58 fire departments of which 38 are all-volunteer. Of those 58 departments, 28 of them participate in a LOSAP program. Some of the 28 departments are a combination of volunteers and paid firefighters while others are all-volunteer.
Eligibility
A “point” system based on an individual’s participation would be implemented to determine eligibility. Based on current participation approximately 138 of the total 195 volunteers are expected to be eligible. Current volunteers would have “look back” period of 5 years after the first eligible year of participation.
Potential Benefits Paid
At the high end a volunteer with 50 or more years of experience could expect to receive an annual benefit of $18,000. At the low end with 6 years of service the annual benefit could be $2,160. The age when volunteers may draw benefits is a choice the Board of Trustees (BOT) may make. Due to the inherent danger in the work of firefighters the BOT was leaning toward a lower entitlement age of 55.
Cost of the Program
The Village would have to fund the program’s upfront costs of $7.5 million over either 5 or 10 years. The actual costs are dependent on several variables including the funding term chosen (5 or 10 years), the start date of the program, the “look back” for eligibility, the type of program chosen and sources of funding. In later years there would be additional annual funding required depending on the type of plan chosen and financial market returns.
Impact on Property Taxes
Because of these variables the annual property tax levy increase could be as high as 5.2% (for 5 year funding or as low as 3.29% for 10 year funding) with additional increases depending on the other variables.
Process to Adopt
Village Voters must approve this program and the BOT discussed whether or not they had time to do the voluminous paperwork to try to get the referendum on the November ballot.
Questions and Next Steps
Interim Village Manager Chuck Strome will work with the Fire Department to come up with a plan for the BOT to consider. Since the FD had only one proposal, they will reach out to other LOSAP providers and also construct additional scenarios using assumptions for the variables mentioned above. They will also attempt to answer the BOT’s questions such as would this increase in the tax rate be excluded from the NYS tax cap calculation, identification of a start date, more information about the referendum procedures and the inclusion of EMS volunteers.
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