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Arlington approves school retirement options

Arlington Community Schools logoArlington’s teachers who are already invested in a “defined benefits” retirement plan can keep that option, and new hires as of July 1 will only be added to the hybrid plan, effective Jan. 1, the Arlington city board agreed in a split vote Monday night.

The board chose that direction after about two hours of discussions and a failed attempt to table the measure until a special-called meeting next week.

Without the city board’s approval, which included taking on the district’s unfunded liability for the Tennessee Consolidated Retirement System (TCRS), the school district would have been more limited in its options.

An immediate decision was needed by June 15 because of a six-month advance notice requirement the state requires.

Arlington Community Schools (ACS) superintendent Tammy Mason and school board vice chairman Kay Williams implored the board to vote yes. Failure to approve that measure would have caused some long-time Shelby County Schools (SCS) employees who are migrating to ACS to have their defined benefits plan frozen, which could have delayed retirements.

The vote had two dissents from aldermen Oscar Brooks Sr. and Jeff McKee.

Mason noted that there has never been a TCRS default, but Brooks said that was no guarantee it would not happen in the future. Williams said TCRS has historically been stable and financially secure.

Town superintendent Ed Haley also spoke up, saying that TCRS is the second-best retirement system in the U.S. and that he supported following the recommendations of the ACS school board and superintendent.

The board’s decision means that ACS will remain highly competitive in offering the same benefits to teachers and non-certified employees and will not have an unfair “class system” for retirees, Mason said, praising the city leaders’ decision.

“I can’t tell you how important it is,” she said. “Our classified personnel are just as important as our certified personnel.”

Although she’s been careful not to promise benefits will remain the same, that’s the expectation among employees and it would have been a devastating “game changer” for the school district’s hiring abilities, Mason said. Approximately 108 former SCS employees moving into the ACS system will benefit from the city board’s decision.

Mayor Mike Wissman supported the vote, saying it upholds the city’s commitment to its new school district.

Board member Brian Thompson repeatedly objected, saying he and other board members only received information on the retirement plan decision as of May 29 and they had too little time to examine a complex issue. He also stated his belief that retirement is an individual responsibility, and furthermore he didn’t want to extend retirement benefits to school district employees that all city employees (such as firefighters) do not yet have.

However, after discussions continued Thompson conceded that a yes vote would be more fair for experienced employees entering the ACS system, and he voted yes.

The vote authorized the school district’s employees to become members of TCRS as of July 1 with these terms and conditions:

  • Regular defined benefit plan (employees hired after July 1 will be eligible only for the hybrid plan as of Jan. 1)
  • No assumption of employee contributions
  • No provision of cost-of-living increases for retirees
  • No inclusion of part-time employees in TCRS
  • No establishment of any prior service credit with the Board of Education
  • A maximum unfunded liability equal to 5 percent of total for expenditures ($1.8 million for ACS)

Other milestones

Plaque presented by Arlington mayor Mike Wissman

Arlington mayor, Mike Wissman (center), holds the plaque designed to commemorate the school district’s founding.
Photo by Carolyn Bahm

Monday was also the day that ACS took possession of its school buildings, and Wissman, the city board, the school board and Mason commemorated the milestone with a plaque that will be a permanent reminder of this milestone.

The board also conducted a brief public hearing on the city’s annual budget, board compensation and property tax levy for the fiscal year beginning July 1.

The tax rate will remain unchanged at $1.15 per $100 of assessed value, which will be nine cents below the city’s certified tax rate for Arlington’s second year, Wissman said.

The board compensation also remained unchanged.

Bridge loan for schools

The board also approved giving ACS a “bridge” loan not to exceed $7 million for the upcoming school year.

The loan will keep the district operational during the critical financial period until external revenue starts trickling in.

Until then, all staff salaries and the district’s operating expenses will still need to be paid.

The city is funding the bridge loan through the issuance and sale of interest-bearing “revenue and tax anticipation notes.”

Repayment is due by June 30, 2015.


Written by Carolyn Bahm, Express editor. Contact her at (901) 433-9138 or via email to carolyn.bahm@journalinc.com.

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