EASLEY — Sink holes and a floundering state retirement fund are two things that don’t appear to be related but when one city has to deal with both of them, what should have been a good fiscal year can quickly turn sour.

“2016 was not a very good year for the city of Easley,” Easley Mayor Larry Bagwell said at the annual State of the City address. “I hate to just put it out there like that because I’ve always felt like I was a pretty good steward of money.”

Bagwell said the thing that disturbed him the most was the city’s surplus rating.

“We (Easley) had a surplus rating of about 32 percent in 2015,” he said. “That surplus rating has dropped down to 22 percent.”

City Administrator Stephen Steese said the project to correct the sink hole problem in the Oak Creek neighborhood was one of the main culprits.

“We spent about a million and a half dollars addressing that issue, and of that, about a million and a quarter came out of the general fund,” said Steese. “In other words, our general fund ‘loaned’ the money — a little over a million dollars — to our storm water fund.”

Steese said the budget was set up to where “about $950,000 of that would be paid back to the general fund” and that the rest of it would come back “over the next couple of years.”

“That (Oak Creek) was a project that had been lingering on for at least a decade and council felt that it was a priority to set up and correct that issue,” he said. “There was more involved in it than we originally anticipated it ended up being about a million and a half dollars to correct that issue. The storm water fund only had about $250,000 in it so the general fund had to loan them the money to do it.”

Issues with bureaucracy and red tape involving the city’s relationship with the state have also been frustrating to the mayor, administrator and council.

“We’ve got some issues that I’m afraid are going to affect us tremendously,” said Bagwell. “One is the pension plan — it’s ‘gonna hit us big in the City of Easley I’m afraid.”

According to Steese, the state pension plan was a billion dollars in the hole 5-years-ago.

“To balance that (deficit) they’ve made employees and employers contribute more into the system to try and get that fund solid again,” said Steese. “Local governments make up 71 percent of the state retirement fund, that means only 29 percent of it is actually state employees.

“So right now what they’re looking to do is pretty much balance the system off the back of the local governments. Because whatever they do is going to be disproportionately shared to municipalities, counties, local municipal districts …,” the administrator said.

Steese said the city chose to opt into the system 70 years ago.

“We and have no control over the system except for what they tell us to contribute. And there is no option to opt out of it. The state will not release anyone from the current system.”

That’s becoming a problem for the City of Easley as Steese said it was a possibility that Easley’s contribution to the fund could go up 7 percent over the next five years.

“That translates to an additional 70,000 per year for every percent they go up,” Steese said. “It’s something we’re keeping an eye on for next year as we budget.”

City administrator Stephen Steese explained how rising contributions to the state retirement fund were becoming problematic to the City of Easley.
https://www.theeasleyprogress.com/wp-content/uploads/2017/02/web1_008.jpgCity administrator Stephen Steese explained how rising contributions to the state retirement fund were becoming problematic to the City of Easley. Kasie Strickland | The Sentinel-Progress

Easley mayor Larry Bagwell delivered the annual State of the City address at a recent Greater Easley Chamber of Commerce meeting.
https://www.theeasleyprogress.com/wp-content/uploads/2017/02/web1_179.jpgEasley mayor Larry Bagwell delivered the annual State of the City address at a recent Greater Easley Chamber of Commerce meeting. Kasie Strickland | The Sentinel-Progress

By Kasie Strickland

kstrickland@civitasmedia.com

Reach Kasie Strickland at 864-855-0355.