CHARLESTON -- A plan to deal with ailing municipal police and firefighter pension funds moved one step closer to passage during the West Virginia Legislature's special session Wednesday.

The Senate unanimously approved the long-discussed legislation, which would give cities such as Huntington the option of closing their existing plans to new hires and refinancing those plans over a 40-year period to pay off their unfunded liabilities.

The focus now shifts to the House of Delegates, which is expected to vote on the measure Thursday, Nov. 19, the last day of the special session. The legislation already has won unanimous approval from the House's Finance and Pensions and Retirement committees.

"This bill would allow us to take care of our problems," Huntington Mayor Kim Wolfe told the Senate's Finance Committee before Wednesday's vote.

The legislation was put on the special session agenda primarily because of Huntington's worsening financial condition. More than 20 percent, or $8.8 million, of the city's $42 million budget is going to pension costs this year. Under the current funding method, those costs will rise to $12.4 million a year by 2015 and will not reach their ceiling until they hit approximately $20 million a year between 2020 and 2022, according to the city's finance department.

Huntington officials, however, have said that revenue growth cannot keep up with the current retirement system's costs and that the city will have to file for federal receivership if it is not changed soon.

Under the legislation, cities would have the option of closing their existing pension plans to new hires and refinancing those plans over 40 years to pay down the unfunded liabilities. Huntington has only 17 years to pay off it's $130 million unfunded liability under the current funding method, said Sen. Bob Plymale, D-Wayne.

The plans would still be administered by local pension boards, but a state oversight committee would be created to deal with issues such as investments and disability benefits.

New hires would be placed in a plan that is similar to benefits offered to emergency medical services employees. The plan would be administered by the Consolidated Public Retirement Board.

The proposal does not rely on any tax increases, nor does it require any state funding. Cities had hoped for 0.1 percent, or about $2.2 million, of the state tax on fire and casualty insurance premiums being routed to the pension plans.

Wolfe said the legislation would not free up millions of dollars. Rather, it would stabilize Huntington's annual pension payments at about $8.8 million for the next few years. The payments then would gradually decrease, he said.

As the legislation made its way through the committee process Wednesday, legislators sought reassurances that the measure didn't include state funding and didn't put any additional financial obligations on the state.

"This is not a bailout of any kind," Plymale said. "This is municipalities taking responsibility for a liability that they incurred."

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