Mt. Vernon Register-News

December 3, 2013

Levy reflects pension issues

The Register-News

---- — 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.”

Mayor Mary Jane Chesley said the Illinois Municipal League, of which she is a member of the board, has been lobbying on the issue for the last several years.

“We are talking to other municipalities and mayors to see what the impact of these unfunded mandates are on communities,” Chesley said.

“It would be a shame if the citizens of Mt. Vernon believed the state is addressing the pension problem, and then find out that Mt. Vernon ... and ultimately the taxpayers, were left holding the bag,” Wood added. “If we don’t get this problem fixed it will lead to higher taxes and weaken our overall financial position.”

In other business, the council:

n Heard an update on capital projects;

n Heard a report from Jeff Haarmann of Affordable Gas and Electric on the electric aggregation program;

n Approved a bid of $1,991.82 from One Stop Flooring America for carpet for the second floor of City Hall;

n Approved a professional services proposal with Round Table Design for a water main relocation at the intersection of Veterans Memorial Drive and South 34th Street; and

n Approved the re-appointment of Chris Mendenall to the 911 Board.