At its Nov. 20 meeting, the Stuart Town Council unanimously approved a $170,000 payment to the Virginia Retirement System (VRS) to address a decades-old discrepancy involving employee retirement contributions.
Town Manager Bryce Simmons informed the council of a letter received from VRS detailing a plan to resolve the issue over the next few years. “What we have talked about is, $170,000 was paid to a previous town employee that was vested in the system that was paid out by VRS, but not paid into by the town and that goes back to the ‘70s,” Simmons explained. “I fully think that the town should be immediately responsible for that $170,000 to VRS.”
Although Stuart is enrolled in VRS, Simmons said the town has not actively participated since the 1980s.
“The town enrolled in VRS in the ‘70s, and once you enroll in VRS you cannot get out of it,” he said. “At some point in the ‘80s, VRS changed the way that they report employment to the state, and at that time, I understand that the town tried to get out of VRS but basically has been non-reporting since that time.”
The $170,000 payment is just part of the issue. Simmons noted that the town also owes approximately $560,000 in back payments to VRS for employee contributions dating back to the mid-1980s.
“I’ve told [VRS] there’s no way we could pay that right off,” Simmons said. “So, they have come up with a payment plan over the next 31 months that would basically equate to $17,500 per month that the town would be paying to VRS to make that whole. That does not include any interest in that outstanding balance.”
Mayor Ray Weiland expressed concern about the town’s liquidity if it commits to such a payment plan while balancing other upcoming projects.
“The longer we wait, the more that keeps billing onto us,” Simmons cautioned, but Weiland suggested exploring options to extend the repayment period.
Weiland added that potential developments, such as a hospital and an apartment complex, could contribute to the town’s tax base and utility revenues, improving its ability to meet financial obligations.
“We do owe the $170,000, and for us to be in the good graces of VRS, we should pay them what we owe them,” Weiland said.
The council’s approval of the $170,000 payment reflects an effort to demonstrate good faith in resolving the issue. “I think that does at least show them that we are operating in good faith instead of just dragging along,” Simmons said.
Town Attorney Chris Corbett raised the question of whether reinstating active participation in VRS would be an incentive for current and future employees. “A retirement plan? Yeah,” Simmons responded.
Weiland acknowledged that addressing the $560,000 backpay would be essential for fully integrating existing employees into the VRS system. “We’re going to have to examine closely to see if we’re going to be able to pull that off and get our employees back into VRS,” he said.
The payment to VRS marks a significant step in addressing the town’s long-standing retirement system obligations, with council members emphasizing the importance of financial planning as they navigate the larger $560,000 issue.
In addition to the VRS discussion, the council:
*Addressed Logo Rumors: Mayor Weiland clarified there are no plans to change the town’s official logo despite some confusion over a design used for the downtown project.
*Approved Donations and Bonuses: The council granted $400 to One Family Productions for a Christmas event, provided employees with a $200 holiday bonus (plus tax), and added Nov. 29 as a paid holiday.
*Created a Handbook Committee to revise the town’s handbook.
*Encouraged Public Participation: Town residents interested in filling a vacant council seat were encouraged to attend the Dec. 18 meeting.
The council also approved meeting minutes, paid bills, and received updates on public works projects and town policies.
