Mt. Vernon Register-News

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December 3, 2013

Levy reflects pension issues

MT. VERNON — A tax levy with a 4.69 percent increase over last year was presented for first reading Monday night by the city council.

The lion’s share of the levies are for firefighter’s pension, police pension and the Illinois Municipal Retirement Fund and FICA, as pointed out by Councilman David Wood.

“The city has unfunded liability, a large portion for police and fire,” Wood said. “We are in a better position than many communities in the region and the state, but it’s important for people to realize it’s a large liability.”

The levy includes $739,721 for IMRF; $837,864 for the firefighter’s pension fund; $684,659 for the police pension fund. In addition, parks and recreation was levied for $180,373, Emergency Management Agency for $8,468 and Special Service Area 1 — which only affects properties downtown — for $85,836.

“It’s important to note we have been paying our pension liabilities faster than the 28 years allowed by the state,” Wood continued. “For the last several years, we have been paying on a 20 year schedule. This year, we have a 22 year rate. ... We have tried to keep the levy under a 5 percent increase, in part to avoid a hearing, but sometimes, I think a hearing would be good so we could explain some of these liabilities. To keep the levy under 5 percent, in previous years, we took from the general corporate fund. We didn’t do that this year. ... If we continue to do that, it eats away at general corporate reserves.”

According to City Manager Ron Neibert, had the city levy been planned for 20 year payback on the pensions, it would have been an 11.8 percent increase over last year.

“How do we fix this problem?” Wood asked. “Unfortunately, the Governor and the Legislature has talked about changing the pensions ... but that has nothing to do with the police and fire pensions. (The city) do not have any control over fixing the pension problems for them. We can’t increase the amount of the employee contributions. We can’t reduce benefits, and there are restrictions on the investments .... It’s unfortunate and difficult that if this issue isn’t addressed by the state of Illinois, all municipalities will have to raise taxes.”

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