Now that budget season is underway for our local municipalities, we're hearing quite a bit about MMOs, or Minimum Municipal Obligations. An MMO is an amount a local municipality is required to pay for pension expenses during each budget year. Most municipalities have some sort of pension board or committee that oversees these calculations
Per state law, each municipality is required to certify what those numbers are by the end of September, ahead of passing their formal budget in November/December. The budget includes those amounts as an expense the muni is required to pay, and there is usually state reimbursement available for at least some of the MMO pension costs - that also varies by municipality.
Here are the MMOs that have been approved recently:
- Hatfield Township's MMO obligations are slated to decrease for the first time in nearly a decade in 2016, a trend officials attributed to a defined contribution plan first implemented in 2013. Total township pension costs totalled $623,860 in 2014, peaked at $716,383 in 2015 and now project to fall to $537,788 in 2016; here's the breakdown:
- Lansdale Borough: Police MMO has been calculated as $967,144 for 2016, based on a total police employee payroll of $2.74 million and an expected contribution of $96,000 from members.
MMO for borough non-uniform pension plan has been calculated as $475,000; of that total $190,000 is required for the management category of employee; $190,000 for employees of the Molders Union, and the remaining $95,000 from AFSCME union members.
- Montgomery Township: MMO for the township's police pension plan in 2016 has been calculated at $761,309; estimated state aid is $247,000 leaving a township obligation of $514,309. 2016's figure is a 1% increase from 2015, and a total of 36 police officers contribute 5% of their salaries.
For non-uniform employees, the MMO is calculated to be $279,591 in 2016, with an estimated state aid of $188,000 leaving a local obligation of $91,591. 49 employees participate in the plan, to which the township contributes 8% and the employee, 4%; the 2016 total is less than a 1% increase over 2015, according to the township.
- North Wales: Council approved an MMO figure of $65,770 at their Sept. 8 meeting, and council Vice President Christine Hart said the borough typically receives "most of it back in subsidies" from the state. "To keep it fully funded is something we've done as long as I've been here. We have not stopped contributions, even when we've been ahead of the game," she said.
- Towamencin: Police MMOs for 2016 have been calculated to be $773,557 for 2016, down from an $814,586 figure in 2015. The township's non-uniform MMO, based on a defined benefit pension plan, has been calculated at $162,360 in 2016, down from $181,117 in 2015.
- Upper Gwynedd's MMO figures were still being calculated during their Sept. 15 workshop, and I've asked their staff if those figures are available - will update once I get that info!