What Are Your Plans?

Businessman Dreaming Of Retirement On A Beach.

I’m not big on audience participation.

I don’t like going to a concert and being expected to sing along (What did I pay you $100 a ticket for?), and I don’t like going to conferences and being expected to answer a bunch of questions (I usually go to conferences to get answers to questions). Don’t get me wrong, when I do pre-retirement seminars for LAGERS I want my audiences to speak up and ask a lot of questions because I’m there to provide answers to them for their retirement questions. However I do ask one question of them at each of the seminars that I do:

“What are your big retirement plans?”

You see, people are very happy to come to us and talk about their retirement. After all, who wouldn’t be excited about the next chapter of your life, being able to come and go as you please and not answer to anyone and be able to do what you’ve always wanted to do? So I always ask people to share with me what their dreams are for retirement.

I’ve heard some great answers so far. Here are a few –

“I’m moving out of the country, to Costa Rica. It’s very inexpensive to retire there.”

“I’m buying a motor home and touring the country to visit all the national parks.”

“I plan to get up after 9 am, have some coffee, go outside for a while, and then do nothing for the rest of the day!”

“My wife and I are going to move to an RV park and live there and work there as park attendants.”

“My grand kids and my new cows and baby calves. That’s all I plan to do!”

“I plan to bike the Appalacian Trail from one end to the other.”


And I hope to hear many more of the wonderful stories that you all have about what you’re going to do next. For those of you planning to move away from your current location and see new surroundings, check out this fun quiz on where you’d like to live in retirement.

Keep dreaming folks. Retirement will be here for all of us faster than we think.


Angela Lechtenberg, Communication Specialist

It’s Official: The U.S. Retirement Crisis is Real


I have been aware of the retirement crisis in America for a while now. There are new articles published every week about Americans’ lack of savings, lack of access to retirement plans, and lack of financial knowledge. Combine that with the fact that defined benefit pension plans have all but been extinguished in the private sector, and anyone can see how this is going to turn out. Every once in while there is an article that claims the retirement is crisis is overblown, a farce, a fairy tale, like unicorns and bigfoot. But these articles are few and far between. There is little evidence that suggests we are all going to be OK and there are mountains of facts that say otherwise.

If there was ever, even more, reason to be concerned about the state of retirement security in America, there is a new report from the National Institute on Retirement Security (NIRS), Retirement Security 2017: A Roadmap for Policy Makers, that proves Americans are concerned and aware of the pending retirement bubble. I recently attended NIRS’ Retirement Policy Conference in Washington, D.C. where this study was released along with several presentations by experts all confirming that we are heading for crash if we don’t do something soon. Here are some of the takeaways from the report and the meeting.

“A secure retirement system is the key to economic security.”


Americans Agree There is a Problem

NIRS’ research finds that 76 percent of Americans are concerned about economic conditions affecting their ability to achieve a secure retirement and 88 percent agree that the U.S. is facing a retirement crisis. So it seems Americans are aware of the problem, but what about our elected officials? One of the speakers at the conference, U.S. Congressman Joseph Crowley (D-New York), is very aware of the retirement crisis and is taking steps to fix it. He said, “The American Dream is increasingly being put at risk,” and “A sound retirement system is the key to economic security.” However, Congressman Crowley noted during his remarks how hard it is to get his colleagues to pay attention to this issue. That is a sentiment that Americans share, based on NIRS study:

  • 85% says leaders in Washington do not understand how hard it is to prepare for retirement.
  • 86% say leaders in Washington need to give higher priority to ensuring Americans have a secure retirement.
  • 82% say government should make it easier for employers to offer pensions.


Americans Like Pensions

The NIRS study confirmed that Americans prefer pensions over 401(k)-type plans. Some 71 percent of Americans say that pensions do more to help workers achieve a secure retirement as compared to 401(k) plans and 85 percent say all workers should have access to a pension plan. The survey also found that 92 percent of Americans agree that pensions help recruit and retain good public sector workers to serve the citizens. “The public clearly supports retirement income for everybody,” Keith Brainard, Research Director for the National Association of State Retirement Administrators, said during the conference.


Most Americans Can’t Achieve Retirement Security on Their Own

National Institute on Retirement Security

The shift away from pensions in the private sector has forced workers to save for their retirement on their own. The problem with this is that the average American worker is not equipped to know how much to save, what to invest in, when to reallocate, and how to turn a retirement nest egg into lifetime income. Brian Perlman, the Senior Vice President, Financial Services Practice Lead at Greenwald and Associates, a full-service market research firm in Washington, D.C. said, “You can’t do it yourself. People cannot succeed [in retirement] on their own.” American workers agree, as the NIRS study found eight-out-of-ten Americans believe the average worker cannot save enough on their own to achieve a secure retirement and nine-out-of-ten say retirees don’t know enough about managing investments to make their savings last.

“You can’t do it yourself. People cannot succeed in retirement on their own.”


Americans Need Greater Access to Retirement Saving Vehicles

“People are more likely to save if you can do it through work,” said Gerri Madrid-Davis of AARP. Fifteen times more likely, in fact. The problem is that only about half of U.S. private-sector workers have access to a retirement plan provided by their employer and many workers that do have access choose not to save. Some states have tried to tackle this issue by setting up state-run funds that workers can put money into when their employer does not provide a plan. These state retirement savings vehicles seem like a great solution! But there is a problem, the U.S. Congress recently voted to restrict states from creating these funds by striking down the rule that allows these programs.


Conclusion: Why Does LAGERS Care About Any of This?

LAGERS members have will have a secure retirement benefit. Our retirees can rely on predictable monthly income that increases with inflation. The overwhelming majority of public sector workers still have pensions and the state-run retirement savings debate does not affect LAGERS in any way. So why do we care? It’s simple, our vision statement is “a secure retirement for all.” We support any reasonable initiative that will help realize that vision. At LAGERS, we are relentlessly pursuing our vision by protecting our members’ assets so they have peace of mind knowing a portion of the monthly income needed to sustain themselves during retirement will be paid as expected. And since we believe strongly that a well-managed defined benefit plan is the best way to improve retirement security, the more people we can get into our plan, the better off we all will be. That is why we also strive to carry our message to local governments that have not yet chosen LAGERS to encourage them to see if our services are a good fit to help their communities prosper.

We know we will never be able to achieve a secure retirement for all; that is why it is the perfect vision statement. It means we will never stop. We will never be finished. There will always be more work to be done.


Jeff Kempker
Manager of Member Services

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Let’s Break Down Retirement Security

“Retirement Security”… the phrase may bring up a lot of questions. Such as –

  • What does it mean?
  • How do I get it?
  • Does anybody really feel “secure” in retirement?

In today’s economy, retirement security can seem rather elusive to some. So we’ve created a very easy to understand video that explains it well. It starts by showing the old rule that you must save 10% of your income to have a secure retirement. But that is nowhere near close to the amount you need. In order to maintain your standard of living and have a quality retirement you need $20 for every $1 of income earned in your lifetime. It’s called the “Rule of 20.” This rule is a good threshold, but how do you get there?

Enter the old 3-Legged Stool of Retirement Security. Social Security, a strong pension like LAGERS, and other savings and investments each make up a leg of the stool. The three work together to create a lifetime of retirement security for you. Don’t take one of the legs away, or your stool becomes wobbly and unstable. Nobody wants a wobbly, unstable retirement!

Watch the video here to learn more.



Back by Popular Demand: The Extra LAGERS Benefits that You May Not Know You Have

When you think about your LAGERS benefit, probably the first words that come to mind are ‘retirement benefit.’ After all, Retirement System is in our name. But don’t forget that there is more to your benefit than the name may suggest; LAGERS also provides our members with disability and survivor’s benefits.

Don’t think your employer elected these benefits? Think again. Every LAGERS member is automatically covered by both disability and survivor’s benefits.

All LAGERS members are immediately entitled to duty-related disability and survivors benefits, and all vested members may also be eligible for benefits in the event of a non-duty related death or disability.

Because these benefits are designed to protect a member and those who are financially dependent on the member’s income from financial hardship in the event of a death or disability, a member (or beneficiary) that becomes eligible for one of these benefits receives monthly protected payments for his or her lifetime, plus any applicable cost of living adjustments.

The amount of benefit payable depends on what caused the death or disability. Duty related benefits are paid when a disability or death was caused by your job, and therefore generally pay a more robust benefit to make up the difference in years a member would have worked and continued to earn a benefit had he not become disabled or passed away. However, benefits to vested members may also be payable if the cause of death or disability happened off the job; the benefit then is based upon how much service the member had earned to date.

Here’s one more thing you should remember about these added benefits: make sure you have saved information regarding LAGERS disability/survivors benefits somewhere that is readily available for you and loved ones.

For example, put a LAGERS brochure or statement in with your life insurance policies. Members or spouses of members that becomes eligible for these benefits often find themselves in an unexpected situation. Making it as easy as possible to gather information regarding potential benefits can really help to reduce the stress of an already difficult experience. Even more importantly, simply ensuring that a spouse is aware that benefits may be payable should be an important part of your financial plan.

If you ever consider taking a job outside of the LAGERS system, there may still be some benefits payable on a vested account, but payments wouldn’t start until normal retirement age. It’s always a good idea when considering a change in employers to consider your entire benefit package, after all, not all retirement plans offer similar benefits. If a potential employer does not offer similar disability and survivor benefits, it may be worth considering purchasing supplemental insurance to make up the difference.

No one wants to ever find themselves disabled or leave a loved one behind who is unable to financially support themselves. With your LAGERS benefits, it’s one less worry. Visit our website to learn more about this great benefit!

Elizabeth Althoff
Communications Specialist

Top 5 Employer Reporting Tips

For some of our employers, the employer reporting process may seem like a foreign art that is yet to be mastered. Others may just need a quick refresher. Here are some helpful tips that I have put together based on my short experience as an Account Analyst for LAGERS.Employer Reporting Tips

  1. Enrolling employees at time of hire

New employees should be enrolled on our online reporting system, ECLIPSE, right away. Some employees may qualify for a six month period where no contributions are due. If the employee exhausted this period with another LAGERS employer, wage reporting begins immediately. You may view when an employee is due for wage reporting in your Free Six Month Schedule on ECLIPSE.

  1. Reporting payouts and wages

Keep in mind that lump sum payouts are only reportable to LAGERS if they are recurring. Many employers report lump sum payouts (for example: unused vacation, sick or comp time) with the employee’s final paycheck. This is only reportable if a lump sum payout of the same type of leave has been paid in the past or if the balance is paid out in regular payrolls to extend the employee’s termination date. Remember to report gross wages when they are paid, not earned.

  1. Checking the Statement of Account

The Statement of Account should be referenced after the monthly wage statement has been completed and submitted. It reflects the monthly contribution due along with any credits and/or amounts due as a result of corrections or adjustments. By checking this prior to making your monthly payment, it ensures that you are sending in the correct contributions.

  1. Making contribution payments online

Your agency has the option to pay monthly contributions online. Paying online is very secure, quick and easy. The set-up process in ECLIPSE is simple; all we need is bank account information. After the wage statement is complete, you initiate the payment amount and date by the click of a button. If you prefer to pay by check, please include a copy of the PDF from the Statement of Account to ensure your payment is credited to the proper account.

  1. Communicating with your Accounts Analyst

If you have a question, feel free to contact your Account Analyst. We are your best resource regarding employer reporting and are always happy to help.

You got this, happy reporting!


Miranda Fishback, Accounts Analyst



May Article Round-Up

Millennials Saving for Financial Freedom, Not Retirement.

As a Millennial, I found this article to be interesting. According to a Bank of America Merrill Edge survey, “more than half of the millennial generation is saving for financial freedom or the ability to fund ‘living in the lifestyle they desire,” whereas more than half of Generation X and Baby Boomers are saving to leave the work force. According to the article, the majority of Millennials are saving to live in “the now” with disregard to whether or not they need to work longer. This is interesting, but not all that surprising to this writer. I think that if you were to ask someone from either older generation about what they were saving for in the 20’s and 30’s, it’s not likely that it was to leave the workforce in retirement.


Happiness in Retirement is About More Than Account Balances.

Of course, when you think of your LAGERS retirement system, you are probably thinking about the finances and the affordability of retirement. However, there are many studies out there that have shown that retirement is not just about the finances. There is much more to it than your account balances. This article gives perspective from a Certified Financial Planner (CFP) that had some clients that retired and ended up depressed. The CFP goes on to say that those of us that identify strongly with our jobs have the hardest time transitioning from working to retirement. This article gives some really good insight on planning for the non-financial parts of retirement.


5 Cheap or Free Ways to Improve Retirement Wellness.

Within the same line of thought as the previous article, this article gives you some cheap and even free ways to help you find wellness in retirement. The one that I found to be most intriguing is the last one on the list, volunteering. If you do not have the financial need of employment, but are someone who strongly identifies with your job, a great way of finding purpose in retirement is through volunteering. The best part about volunteering is that you get to pick the purpose you want to pursue! However, if you don’t want to volunteer, there are some other great suggestions in this article of how to achieve wellness in retirement.


5 Steps to Perfect Financial Health

Retirement is just one piece of your financial well-being. It is best to get yourself in the best financial position possible now so you potentially go into retirement with strong financial health. This article gives you some small tips to get you going in the right direction towards financial independence. Give it a read and think about implementing some of these to start going in the right direction.


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Jeff Pabst, CRC 


A Look Back at the 2017 Legislative Session

As the dust begins to settle in Jefferson City, we close the book on another legislative session. Beginning full of optimism, there seemed to be very little standing in the way of a seamless legislative agenda this year. Right off the bat we saw several major landmark bills from Right to Work to Tort and Labor Reform, and then the machine came screeching to a halt. Some say the Governor’s office was bullying legislators, others say it was lack of Senate leadership; some say it was simply in-fighting between party factions. We may never really know. Whatever the source of dysfunction, we saw at times a painfully slow legislative grind. In the final weeks, the bodies slowly moved forward and we did see a few other legislative accomplishments. The legislature passed the budget, fully funded the education formula, passed Real ID, as well as the Blue Alert system.

On the pension side of things, we saw a bit less accomplished. The biggest area of focus for pensions this session was funding. We saw a great deal of discussion in appropriations committee devoted to funding of the State Employees retirement system (MOSERS).  The House originally drastically reduced the requested funding, which was eventually resorted in the Senate. Out of 44 Pension Bills that were filled this session, only 2 were Truly Agreed and Finally Passed. The first,  Senate Bill 62, was an omnibus pension bill that contained amendments, many of which were designed to address some sort of funding issue. LAGERS was not directly impacted by this bill. Senate Bill 34 was the second pension bill passed, but its language was also contained in the omnibus SB 62. This bill modified language related to felony pension forfeiture.

LAGERS did not sponsor any legislation this session, but was closely watching several bills. LAGERS Public Safety Language was again filed this year to give all employers the option to update the definition of public safety to include EMS and Jailers. Though not initiated by LAGERS, Representative Walker filed the language in HB 865. While there was no opposition, the bill failed to gain traction as focus this session quickly shifted to some of the more pressing funding issues. The language was successfully amended to SB 394 later in session and came very close to the finish line this year. Thank you to those who called in on the bill’s behalf in the final days, and as one of our advocates noted, the capitol was quite busy the last two days as everyone made their final legislative pushes. While the Public Safety language fell short, LAGERS was encouraged at the progress the bill made this session and will be retooling our strategy over the summer.

Another bill that would have impacted LAGERS was HB 933. It would have allowed metropolitan planning organizations to be considered eligible for LAGERS membership (mirroring the regional planning commission language that was passed several years ago). While LAGERS did not sponsor this language, the MPO group did reach out to LAGERS to ensure the language they were seeking met our approval. This bill did not make much noise in its first attempt and will likely reappear next session.

Don’t forget that our Legislative Committee meets every year at our Annual Meeting. This is a great forum for all members of our system to meet with the Board, Legislative Committee, and Staff and participate in an open forum about upcoming legislative issues and agenda of the system. Be sure to look for more information on that in coming months!

Legislative Quick Links:

Sign Up to Receive LAGERS Capitol Report

Visit the Joint Committee on Public Employee Retirement’s Webpage

View Summary of 2017 Pension Legislation

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Secure = Boring? So be it…

Piggy Banks With Savings Chart

We might seem boring to some, but we’re passionate about pensions and financial security.

Call us boring, it’s OK. We at LAGERS actually like being boring. If ensuring retirement security for thousands of Missourians sounds like a snooze fest for you, you may not want to work here. However, we’re pretty passionate about it. Here’s why.

Our Mission

Day in and day out what we strive to do the most is to fulfill our mission statement:

“To provide secure retirement, survivors’, and disability benefits to members and beneficiaries in the most efficient and economical manner possible, while providing superior service and fulfilling our fiduciary obligations.”

That doesn’t sound particularly flashy. But it’s serious business, and oh so important to our members. Like many we believe that our nation is headed for a retirement crisis, and it’s because not everyone has what we think everyone who works hard is entitled to—a secure retirement.

Our Vision

This past year we decided to expand upon our mission statement – which has been in place for quite some time – and develop a formal vision statement. In coming up with the vision statement our Board ultimately adopted, we started with the mental phrase:

“We dream of _____.”

The dream or vision doesn’t have to be easily attainable, or it may not be completely attainable at all, but it is something to always have in mind, to always strive for.

Ultimately our vision statement became A secure retirement for all.” Our vision hopes and promotes that every working person may have a secure retirement benefit that will allow them to leave the workforce with dignity when that time comes. Our mission requires us to make sure of it for our members.

How We Actively Pursue our Vision to Accomplish our Mission

So how do we ensure the security of our members’ benefits? There are several ways we accomplish this, but primarily through plan design and investment strategy.

Our plan design requires mandatory participation by all full-time employees of participating agencies—no opting out. The plan allows for shared financing-both employees and employers can share in funding required contributions to the plan. The plan requires all contributions be paid to the plan—no pension contribution holidays.

In addition, benefits paid out should be adequate as one component of an individual’s retirement benefits. Think of the three-legged stool analogy—retirement benefits ideally consist of pension benefits (LAGERS), Social Security where applicable, and personal savings. Our plan has a minimum benefit multiplier of 1% and up to 2% for those participating in Social Security. Therefore, a 30-year career would yield benefits equal to 30% to 60% of pre-retirement salary, depending on the program elected by the employer.

The final plan design component that supports retirement security is lifetime benefit payouts. A person who retires and receives a monthly benefit cannot outlive that monthly benefit, and may also provide for continuing payments to a beneficiary in the event of his/her death. In addition the plan provides for annual cost-of-living adjustments to keep pace with inflation.

Besides plan design, a significant factor in the security of LAGERS benefits is investment strategy. This includes the pooling of assets maintained for all employers, members and retirees, professional investment management at negotiated fees, a well-diversified portfolio of investments (including investments not typically available to individuals), and a long-term investment horizon. Read a previous blog by one of our investment staff for more on this.

The result of LAGERS’ solid plan design and investment strategy is a current funded ratio of around 95%. That means we currently have 95% of the assets on hand to pay for benefits promised.

Good news doesn’t make headlines as often as bad news, but this is very good news for our members who work hard making our local communities better and who deserve a secure retirement, as do all.

Back By Popular Demand: What’s the Best Payment Option?


LAGERS offers several retirement payment options for you at retirement. And, believe it or not, there is not one option that is better than the other. In fact, the payment options themselves are designed to ultimately pay the same total amount to you or your beneficiary once both of you have passed away. That fact does not really help you make the decision as to which payment options you will choose. Because, while there is no better option than the other, there is an option that may better fit your needs in retirement. Here are some things you should be thinking about when determining which payment option you will choose.

Does my spouse have a pension of their own? Sometimes, both spouses have a pension. When considering your payment option, consider what retirement income your spouse will be receiving from his or her own pension. Depending on the circumstances, this may lessen the need for you to provide a monthly benefit for your spouse. Option A and Option B are joint survivor options that offer varying amounts payable to a spouse. For example, my wife is a public school teacher and if she works her entire career as a public school teacher will have a significant pension benefit when she retires. This may dictate the payment option I choose in retirement knowing that she will have her own pension income.

Do I want to provide for my children? Currently, there are a few options that allow for a non-spouse to receive a monthly benefit Under Option A and Option B, the beneficiary must be a spouse of two or more years or a person who is 40 or older and has received more than half support from you for two or more years. Also, Option C allows you to list someone other than a spouse as a beneficiary. Another way to provide for your children is through the Partial Lump Sum (PLUS). If you choose, the funds from the Partial Lump Sum can be directly transferred to a qualified retirement account (IRA, 457, 401, etc.). Once the funds are transferred, you can set your beneficiaries of the qualified account to also include your children. This is a way for you to leave a legacy to your children and / or grandchildren.

I don’t have a spouse or any children, what options do I have? As a single person, you have two options available to you. You may choose the Life Allowance which pays you the highest monthly amount and when you pass away nothing else is payable unless you have employee contributions remaining. If so, the employee contributions will be refunded to your beneficiary of record or your estate. The other option is Option C. It is the only option that pays a monthly benefit and allows you to list whomever you choose to be the beneficiary.  This would include a trust or charitable organizations.   And remember, you may be able to choose Option A or B if you are financially supporting another person that is at least age 40.

What if my spouse significantly younger than me? If you are choosing a spousal option, there are additional adjustments to the member’s benefit based on the age difference between you and  your spouse. Option A and Option B both have additional reductions to compensate for the spouse being younger. However, your younger spouse will still receive a benefit for their lifetime upon your death. So, you might think that the additional reduction is well worth a lifetime spousal benefit.

Can I take a piece of the partial lump sum to pay off my mortgage? One quick way to receive a sum of money to pay off unpaid debt is the Partial Lump Sum. However, you can’t receive just a portion of the lump sum. Also, if you receive the lump sum and deposit it into a checking account, it is fully taxable. So, if you need only a portion of the lump sum, you could choose  a direct rollover of the funds into a qualified retirement account. Once the lump sum has been transferred, you may withdraw only what you need from the account to pay off your mortgage. That way you are only taxed on the funds you withdraw and not the entire lump sum. Keep in mind, that when you withdraw from your qualified retirement account, the funds have the taxation characteristics of that account and your withdrawl will be subject to those characteristics. So, before doing anything like this, you should seek advice from a professional accountant or CPA.

As you can see, there are several different scenarios that could play out and several more that were not illustrated here. Bottom line: there is not one option that is the best. However, there may be an option that fits your needs better than the others. So, do your research, attend a seminar and make an educated decision.

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Jeff Pabst, CRC Senior Communications Specialist

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Local Government Week: Thank You to Those Who Serve Others.

Boy sliding into base during a baseball game with Instagram styl

These boys sliding into base during a baseball game don’t have to think about how they got there, and the local government systems and servants that made it possible.

How time flies.

I’m coming up on my 23rd year of service with the Missouri Local Government Employees Retirement System (LAGERS). When I started, I didn’t really understand what a ‘pension system’ was, or really what they did. I certainly do now. When folks find out what I do for a living, the response is normally either, “How in the heck did you pick that?”, or “Wow, that must really be boring.”

The answer to both questions is a surprise to many. My work is anything but boring. And I’m lucky that it picked me. I truly feel that I am so blessed to get to do what I do. I have the privilege of serving those who so diligently serve others. For so many, the world is spinning so fast and we are all caught up in the frantic scurrying of our day to day lives that we miss seeing so many things, often behind the scenes. Those who work in local government are often the ones in charge of the “behind the scenes” tasks that keep our communities running. They don’t ask for much; they just do their jobs to keep everything running smoothly in all of our lives every day.

Here is just one of many examples:

With cameras in hand we rush to the ball fields after work to see our kids (or perhaps grand kids) and catch a glimpse of them in action. We celebrate, bond and picnic in the park after the game. We treasure the pictures but rarely stop to think about all those who did so many tasks- countless hours of planning, preparation, and grounds keeping -to help create these special moments.

Where to begin? Here is what that journey looks like before we even throw the first pitch or kick the first ball:

  • City officials recognize how important kids’ programs are not only to the kids and their families – but also to the community itself.
  • City councils approve the funds and staffing to implement the programs.
  • The various parks workers, put the programs together, assemble the teams, schedule the fields, and then train their staff to work the events – all to create that positive experience for our kids.
  • Then there are countless hours of work preparing the fields and facilities for the first game.
  • After the event is over and everyone has long since gone home, facilities’ personnel pitch in to clean and prepare the park to ‘good as new’ for the next night to come.

I am blessed that in my role I get to see the other side.  I get to go “behind the curtain” and see the dedicated workers who are doing their part to serve our communities and our citizens.

I could go on and on but I hope you see the point.

The next time you’re at an event like this, please take a minute and look around. So many people are working so hard for your community…their community. Please give them a smile and a simple thank you.  It is well deserved.  They’re out there working every day, hidden but in plain sight, for all of us.

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