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City may get more debt relief than sought

March 30, 1998|By GUY FLETCHER

ANNAPOLIS - Legislation to reduce the city of Hagerstown's pension debt was approved Monday by the House of Delegates, and the city could end up getting more than it asked for.

"I thought that was great," said Del. Sue Hecht, D-Frederick/Washington, after the House voted 131-1 to approve the legislation.

The city's pension debt resulted from a 1996 law that changed the structure of municipal contributions to the state retirement system. Under that law, the city, despite having paid its pension bills to the state on time and in the amount requested, found it owed $9.96 million to the system.

Last year the legislature agreed to lower Hagerstown's debt by about $2.5 million. Six other local governments in the state affected by the 1996 law received lesser amounts.

This year the city requested another $2.5 million as part of an overall $3.85 million payoff to the seven governments.

The legislation was intended to bring the governments' pension debt to 40 percent of their annual payrolls.

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But a fiscal analyst found that because of interest on the debt, a total of $4.45 million would be needed for the governments to fall beneath the 40 percent limit.

The analyst's report does not include a breakdown on how much more the city would receive, but it would likely end up being several hundred thousand dollars, based on an existing formula.

"We got more money than we asked for," said a smiling Del. John P. Donoghue, D-Washington, chairman of the county's legislative delegation.

The bill must now go to the state Senate for consideration.

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